The question is get asked most often (other than "How much time do you spend on this?") is "How do you manage to make so much money trading?" Frankly, I'm never quite sure how to respond. I previously worked as an investment portfolio manager, so I realize that a lot of the strategies are probably second nature to me. Let me see, however, if I can provide some useful tips.

I tend to group players into three categories:
1) Premier players are those who I want to own for the long term. Examples are Shaq, Robinson, Hill, Payton... you get the picture. Of course, they are also the most expensive players, so it is often not a good idea to buy any of them when your roster value is low (around $50-60 million), because that doesn't leave much to work with for the rest of your roster. These players usually trade at a premium price as well, meaning that their price per expected point is higher than most other players.

2) The next category is players who are almost as good as the premier players, but who tend to be a bit cheaper, and often experience some bigger price swings (which is directly related to the fact that a lot of other managers also own them). I'll call them Builders, because they are the guys you will build your team around while you are bulking up your roster value. This category includes players like Brian Williams, Donyell Marshall, Bobby Jackson, Rik Smits... you tend to find them on an awful lot of rosters. They are good players to own while you're building a team, because they don't cost as much as the premier players, but they produce almost as many points - especially when they're on a hot streak. They are also prone to have occasional slumps as well, which leads to some price volatility. They are generally priced in the $5-$9 million range.

3) Then there are the players who I only care about for trading purposes. These are the guys whose prices have gotten too low, and seem poised for a price increase. Many times, their low price is a function of an injury, but sometimes it's just induced by normal trading volatility. Recently, this category included guys like Tony Battie, Alan Henderson, Travis Knight, and Brian Grant (still on the IR, but soon to return, I hope.) (Actually, if he weren't so injury prone, Brian Grant could be a "Builder".)

My objective as manager is to build an eventual roster of as many of the premier players as I can. But at the beginning, I need to load my roster with guys from the 2nd and 3rd categories. I'll hold on to a "builder" unless his price gets so high that it's ripe for a fall. But I'll actively trade the guys in category 3. Just "buy low, sell high". (Easy, eh?) Knowing "when to hold and when to fold" is sometimes tough to figure out, but usually when a player reaches an all time high in price, he's going to be dumped (unless he's really been en fuego), and when a player reaches an all time low in price, he's a good buy (unless he's injured). For some players, you can anticipate the likely price moves by looking at recent history. Brevin Knight was a good example early in the season. I made a ton of money just buying and selling him at the right times as his up-and-down price cycle was repeated again and again.

In particular, watch for players who are coming back from injuries. Recently, Charles Barkley gained over $2 million during the two days after he returned. (Actually, I'd categorize him as a "premier" player, but anytime you can buy a "premier" player for a "builder" price, jump on it.) More recent examples of players whose prices jumped in value upon their return are Sam Cassell and Chris Gatling, while Hakeem Olajuwon and Penny Hardaway have been moving up this week in anticipation of their return. Returning from injury isn't a sure recipe for a gain, though. The player's price has to be enough below its "normal" value to induce the gain. Consider Mookie Blaylock. He only appreciated $170,000 since his return because he was overpriced to begin with. You can usually recognize these players because their prices don't drop much when they get injured. If no one owns a player before he's injured, then his price can't be driven down by sales.

There's a saying among investment traders that "bulls and bears make money, but pigs get slaughtered." When you're trading for gains, set realistic price expectations for the players you hope to sell, and sell them when they reach those levels. If you hold out hoping for too much, you'll usually get caught in the back draft. Often, you can make profits several times on a single player by buying "dips" and selling "peaks" as his price swings back and forth in search of its equilibrium level.

In the final analysis, the only way to be a successful trader is to work at it. I believe it is Arnold Palmer who was quoted as saying "It seems the more I practice, the luckier I get." If you dedicate some effort to following price movements, you're bound to find some "lucky" opportunities. Scan the price changes every day, and see who has made the biggest moves. If you think a guy has peaked in price, then sell him. Find someone who looks low in price to buy, or if you've been pocketing some profits, maybe it's time to spend the extra cash to buy a premier player. If the best buy is someone whose price is way below the amount of cash you have available, don't worry about carrying a big horde of cash for a short period. You are looking for profit opportunities, not long term holds. Gradually, over time, you should be able to stock up on the premier players.

By the way, if you feel guilty about spending too much time on what seems to be "only a game", you might soothe your conscience by realizing that you can actually learn an awful lot by playing this game.... and not just about fantasy sports, but about investing, too. So don't think of it as playtime; think of it as an integral element of your continuing education.

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Hoop Pointers is written by Dave Hall (a.k.a. the Guru), an avid fantasy sports player. He is not an employee of any of the fantasy games discussed within this site, and any opinions expressed are solely his own. Questions or comments are welcome, and should be emailed to Guru<davehall@home.com>.