bag8ger, Each stock has a group of individuals (MM's) that are assigned to them by the brokerages, and that's just what they are, a group of individuals. As such, they tend to develop a trading style. If you study a stock long enough, you learn who are the principle traders in that particular stock and tend to lead the way for the other mm's. You will see they move like a flock of birds. You will also see that they tend to move within certain percentage ranges that often correspond to certain parameters as set forth in the charts. I am not as adept at charting as a few here, simplegreen, dart, and a couple of others really good at TA (technical analysis), but I use the bollies (bolinger bands), moving averages, and money flow as indicators of the percentages of the swings. I trade within those percentages, the operative word being within, meaning I trade inside even the MM percentages.
I often times study the MM patterns of a stock for six months before I initially invest. To be successful at trading regularly, you first have to pick a stock that has good volume or you will end up "parking" your money there. Then figure out how much the group of mm's are willing to let the pps move before they start the retrace. With a little bit of study you can get a feel for the entry and exit points...
Diversity works for investors that don't have the time to study the stocks full time, but I like to concentrate on one or two stocks with good volume and learn the tendencies of the mm's on those stocks.
Like Mark Twain said, "You can put all your eggs in one basket, but you damn well better watch that basket."
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