One example would be when a bunch of scalpers buy a breakout and it fails... they all run for the door pushing the price the wrong way, making em all puke... another bunch of scalpers is waiting a few price levels below, waiting with their bucket to clean up the first bunch of scalpers' vomit... the second bunch of scalpers wait for some support to come in on the stock (maybe some juicey bids and blocks) and will buy, cashing out later for a tidy little sum... but of course the second bunch of scalpers could end up puking too, cos they could have just bought the first leg of a reversal which had just undergone an upward micro wiggle, pulling em into the trade and setting em up for a loss... and the cycle of puking and bucket shifting continues... somewhere in the process, a handful of people make some $ ...
Congratulations - for having written what very may well have been the most disgusting set of posts in the history of E.T. If you were in my office with me, I would express my appreciation by puking all over you.
quote: -------------------------------------------------------------------------------- Originally posted by illiquid You can make a good living eating the puke off the floor from your brother scalpers; just wait till you see the rain of vomit and run over with your bucket. -------------------------------------------------------------------------------- Huh? What are you saying? I don't get it. Are you saying scalpers are good or bad traders? I said it doesn't matter as long as you can make $ consistently __________________________________________________ What they probably mean is lets say there is a sell off in MSFT and the stock hits the low of the day everyone goes to short it and it spikes down don't short it if you have to compete for a fill. Wait for the lever 2 to show a ton of red on the sale side and a small bid eating all the selling. Bid the stock, the moment the other traders see someone is holding it up they will all go to bid it. Then you have a nice short squeeze to sell into. Patience when everyone is trying to get filled pays nicely.
The problem with your analogy is that the 2nd group of scalpers 'waiting' a few price levels down would not be different ones....they would be the same ones as before buying at a lower support level, possible on the bid instead of the offer. But yeah that is disgusting....it doesnt really make any sense though. Yeah, you can capitalize on other day traders mistakes...such as going short into strong resistance levels while other scalpers are buying into a weak breakout. We all get the odd 'gift' or mercy fill, where you get filled nicely out of the market. But in terms of taking advantage of other scalpers, how do you know who they are? They could be MMs using ECNs (which they do A LOT), they could be covering.....and I find myself often hitting the SOES button to get in on a big move as all the ECNS except for the shitty ones (BRUT, ATTN) are gone or going....so whether you like it or not, the MMs are who really hate us. Their answer to this problem: SuperMontage. All be prepared for a good and long assfucking when SM begins on Monday.
There is a huge surge of selling with a small bid. That is sort of an intraday capitulation. The market makers are usually the ones that do this when they want to buy a lot of stock at a good price.