I trade 150 shares of SPY, used to trade 100 and before that 75. However, it's in my trading plan to increase as the capital increases from profits. Are you saying their size is a constant ?
I don't know if their size is constant, I just though it was small. But I guess it is all relevant to how much capital is in the account. I just figured that someone that acts as a mentor (professional trader) would be trading more than 500 of MSFT at a time. But I just saw a few videos so I could be wrong about whether they trades small size. MSFT is a 20+ stock whereas SPY or DIA are 85+. Microsoft normally has a 30 cent range whereas SPY may have a $2 dollar range... big difference. As in your case, it's good to gradually increase size with more profits or experience. I'm only able to trade in 100 lots, but I'm comfortable having 500, 1000 shares in liquid stocks. When you develop that comfort zone and you have a consistent strategy, go for it. My only issue with SPY is that it is a leading indicator and that many guys get stopped out with irrational hairs.
Understood, except I find the price action in SPY much more uniformed and structured than equities. Thank you for your input.
Sounds good. Just know that what happens in SPY will usually happen a second or two later in equities... def in the liquid, high volume stocks. When the spread between the cash and futures contract widens... the arb programs kick in (either longing futures, selling stock or vice versa). That's why the futures and stock market move together. So I think there is a tiny edge (although everyone knows this) in exploiting the laggards because they will generally follow the leaders.
Hi NoDoji, Do you have the link to the charts of his trades people are posting to? I'm reading the thread now, but it's a long thread, will take some time to find it. Hope that you can help if you have the link on hand. Thanks.
My trading idol is David Nassar. In 2001, I took a trading class from MarketWise school (unfortunately now defunct). It was Dave's associate who taught the class, but Dave came in one day before the market opened and gave us some pointers and showed us how he traded for about an hour. As the market opened, he said "I am going to trade KLAC and I am watching the SOX. SOX is slightly down today but KLAC is gapping up. The broad market is weak. There is no good reason for KLAC to go up. I am going to short it." 2-3 minutes after the market opened, KLAC ran up a bit more from the gap-up. Dave shorted 1000 shares of it in front of us using his account. He kept talking to us, showing us a few things to watch for. A few minutes went by, KLAC went up another 50 cents. He said "I am not going to be shaken out from this trade... KLAC starts to show some weakness after the initial buyers got in". He then shorted another 1000 shares. And about 1-2 minutes after, KLAC started to tank (first reversal). First slowly. Then rapidly. Boom! It went down $1.00 from his average price in 5-10 minutes or so. He started paring out... covering, 500 shares a shot. Just like that... I watched him made $2000 in front of the class. That's just one trade! (I just secretly wished that I had followed him on that trade.) I heard that he did pretty well the year before (2000). Over a million (???). Not surprisingly. He has 3 trading books and some DVDs out and had been a trader/educator. Look that up! But I don't know what happened to him. He is not teaching no more. I would listen to his talks anytime, much rather than someone like Oliver Velez. If anybody knows Nassar's whereabout, please enlighten me.