Life in the trading trenches

One of my trader friends reminded me of something the other day- most of the traders on the "street" do not remember the last recession. The industry is full of newly minted MBA's in their late 20's (who else can work 18-20 hours for months on end but the young?). So when bad news hits, like the subprime mortgage collapse, some traders tend to panic and unload more of their holdings than they should because they have never seen bad times before (you have to keep in mind that traders on the street are momentum traders-which is based on volume trading- so a panic by a trader means tens of thousands of shares or more being sold).

Another helpful tip, at the end of every calendar quarter (so late March, June, September and December), traders tend to profit-take to pad their quarterly results so it is a bad time to sell but a good time to buy.