Trader Talk by StockPickReport


SHREVEPORT, La., April 6, 2006 (PRIMEZONE) -- StockPickReport.Com (IARD No. 119079, http://www.stockpickreport.com), rates Cisco Systems (Nasdaq:CSCO), Advanced Micro Devices (NYSE:AMD), Bank of America (NYSE:BAC), and Chesapeake Energy (NYSE:CHK).

StockPickReport.com provides unbiased stock ratings from registered investment advisors. StockPickReport offers subscription services for Swing traders, Day traders and Penny Stock Traders. StockPickReport.com issues daily market commentary and features a member's area with detailed information on over 12,000 stocks.

Important Stock rating Changes:

Cisco Systems (Nasdaq:CSCO) -- SELL

http://www.stockpickreport.com/abrating.php?sym=CSCO

Advanced Micro Devices Inc (NYSE:AMD) -- BUY

http://www.stockpickreport.com/abrating.php?sym=AMD

Bank Of America Corp (NYSE:BAC) -- BUY

http://www.stockpickreport.com/abrating.php?sym=BAC

Chesapeake Energy Corporation (NYSE:CHK) -- SELL

http://www.stockpickreport.com/abrating.php?sym=CHK

StockPickReport Commentary -- April 06, 2006

On Friday I was talking to another trading friend of mine and we came to a lot of the same conclusions. Really, these conclusions are why there's always going to be traders that win, and traders who keep losing, and then quit.

Reason? Knowing when to take profits, and when to cut losses. Let's say you're playing blackjack and you just won ten hands in a row. Would you walk away? Or just keep playing and you lose 10 hands in a row. Then you keep playing and you lose another 10 hands in a row. Well that's like buying a stock, and watching it go up for 10 days in a row, and then down for 20! How does Vegas make money? Because no matter how many profits someone has, they will never stop playing.

In order to relate this to trading, when I talk about never stop playing, I mean never taking profits. You've got to take profits, and you've got to cut your losers quick. Let's say you have a stock that goes down and hits your stop point. Then you immediately replace it with another stock you think will move up. What's the big deal? It's no different than the same stock rallying, but the new stock had a better chance to rally! Why not replace it with the new stock? In trading, it's the way to do it.

Last fall we traded Carbo Ceramics Inc. (CRR) profitably two times and took profits both times. Looking at CRR now, it fell below where we got in the first time! So much for buy and hold. There are always a FEW stocks to buy and hold for considerable periods. The ones we mentioned here in the Daily Archive are Suncor and BHP Billiton. The rest, we cut losses quick and replace them with better alternatives and take profits when profits are due.

For More Commentary go to: http://www.donharrold.net

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