Friday, April 20th

Dear Member,

There's a poker expression, "If you're playing a poker game and you look around the table and can't tell who the sucker is, it's you."

There is a trading quote as well, "You can always make money as long as there are greater fools to sell to. Just don't be the last fool."

The trading quote is a perfect example of how to make money in the market. A stock can go up and up and up, and you can still make money if you know that there is a greater "fool" to sell to.

Think of gold last year. From $500 to $735 in just a few months. Then at $735, it was the last fool that bought. Take a look at the 10 day Conoco Phillips chart here:

Conoco Phillips 10 Day Chart April 19, 2007

Here is an email verification from a member as to how we did on our COP calls when we got +115%..

We got our options at $1.25 and sold at $2.70.

Today, only two trading days after we got out, the options are trading for only $1.65.

So, like I said a few days ago, I almost feel bad when I am exiting a trade like COP and ponder to myself, who in the world are buying these options? Because, someone has to buy them. But, as stocks trade, so do the options as they just continually follow the stock prices.

That price, at $71.00, was a target I had the entire time we were holding that trade, for 8 trading days. We got out at the precise top, with a +115% gain.

So, when you trade, you must consider:
Am I one of the first in? How close to a "first buyer" am I?

Then as the stock starts rising:
How smart are the people that are buying? then.......

How foolish are the people that are buying? then.......

Where will the last fool buy? Because that is whom I will sell to.

Good Trading,
IntradayTrades