I'd be lost on the floor of a pit but can tell you that a number of his points run contrary to what I've been doing electronically for the past 20 years.
Some good rules. However, #13- Ignore news. News is history. Probably one of the dumbest things I’ve ever read. We had a small group (before news reading bots) that in the late 90’s and 2000’s collectively made tens of millions trading breaking news from Bloomberg, Reuters, DJ, CNBC, etc. Even now that bots have taken over the news game, how many times have the futures been getting pounded all day only to get a 3pm comment from someone and the market rips 20-30 handles into the close. Never ignore news. It makes no sense.
Couldn’t disagree more. But there’s more than one way to make a buck in this business, so whatever works for you.
Bots are not traders. As for traders we have no way of knowing the news beforehand or how the market might perceive it - more times than not. Believing otherwise is one of the dumbest things I've ever read.
I agree with most of the list (good agreement with 20 out of 25), so i would say it is a pretty good list! Discipline is super important! A trader with a weak (slightly positive) edge with strong discipline will make more money than a trader with a strong edge but weak discipline. Had a few minor issues with some of the points: 4) NEVER TURN A WINNER INTO A LOSER. Only if that is part of your trading rules. Personally i don't care if a winner turns into a loser. If my system is profitable it will make money over the long run. The effect of the odd winner turning into a loser won't affect long term profitability. Although if the trader is mentally weak it may affect his short term psyche. 15) LOVE TO LOSE MONEY. This is correct, but incomplete. Jerry Parker says it better when he says you should love every part of your trading system including the losing trades it takes. It is easier to love your overall system as it is designed it to make money over the long run. 16) IF YOUR TRADE IS NOT GOING ANYWHERE IN A GIVEN TIMEFRAME, IT’S TIME TO EXIT. Again only if that is part of your trading system. I personally don't do this. 18) MAKE A LITTLE BIT EVERYDAY. DIG YOUR DITCHES. DON’T FILL THEM IN. Again only if that is part of your trading rules. I dont care if i have a losing day or even a losing month. As long as i make big money in the long run. Trying to make money every day might reduce overall profitability in a big way. 19) HIT SINGLES NOT HOME RUNS. Only if that is part of your trading rules. Personally i like to aim for a 3:1 reward:risk at a minimum. I won't take a trade with less potential profit. But that is me, other trades may be happy with a lower target. They say the old pit trades could make a living just from the bid/ask spread. That sounds like the ultimate single hitting.
I was a bit put off by the common platitudes that we've heard recited countless times ad nauseum - so I googled the book and author. This is like 15 years old - which is about the waning hours of opportunity for a trader with a mouse and a DOM execution window being able successfully day trade in the literal sense of the term with many trades taken during the course of a typical trading day. It's gotten a helleva lot harder since 2003 Mr. Zalesky. The structure of the markets and the highly capitalized ECN speed bias has changed monumentally since. Shit, we've gone from collocated servers to collocated sockets. Obviously you're not going to be able to sit there hand on mouse concentrating on a DOM order book and beat out the bots and the automation these days. You're going to have to be much more selective and I would imagine that your trade holding time frames might have lengthened as well to make it day trading. Good luck with that.
qxr1011, Thanks for commenting on this. In other words, just following a winning method and make money