Vince and David talk about the hypnotic effect the market has on some people. They offer some solutions to minimize this effect. One is having a SOP(Standard Operating Procedure). When Vince does stock selection he is looking for correlation between the instrument and the general market trend(beta > 1.5). David limits single position to 2% or less of working capital.
David looks at PHI and shows how the pattern emerged a couple of weeks ago after a .618 retracement on the 19th. 70% of the time the high or low for the day is in the first hour of trading. David then uses the 5 minute chart to enter the trade on On David's blog, he discusses NCF to demonstrate his entry strategy.
David analyzes ARO and RL and what this says about the retail sector. (mp3)
