Credit Trading, newcomer questions, rant...

Discussion in 'Strategy Development' started by Vitali, Jul 5, 2005.

  1. Vitali

    Vitali

    Hello everyone, I just found this forum today and gave a good look around.
    I have started 3 weeks ago at a trading firm, doing proprietary trading focused on Credits. Basically I aim to get credits from Nasdaq rather than capital gains so my whole strategy has been trying to scalp(shave) SUNW on daily basis and get my 2/10 cent per share from it. Unfortunately I have been having trouble breaking even doing this and its starting to really aggravate me. Some people at the office claim to have worked on doing credit trading at swift trade years ago but now do not remember/(have time) enough to show me anything useful...
    The other 2 credit traders hired with me, who have next to no experience just like me aren’t doing any better, in fact they usually do worse than me. So I am starting to wonder if this is even possible to make money from credit trading.
    I have read several trading books in the last 2 weeks, which gave me some good ideas and I have been trying to use moving averages to see swings so that I don’t get caught in them while trying to scalp.
    Anyhow, if anyone has anything to comment, please do. I am interested if anyone has done credit trading before successfully and what has helped them to come out on top.

    Oh yes, also forgot to mention, I use INET books to trade.
     
  2. plugger

    plugger

    It's a great risk reward tradeoff. You risk 1 cent to make 0.2 cents. I think you're in for a tough one on this but I'm sure there are people out there who do and are good at it. Good luck.
     
  3. KevinK

    KevinK Guest

    Why are you still trading there if your risk reward is 1/5. That means if you make 10 successful 2/10 cent trades than lose 1 trade you've wiped out 1/2 your gains. Is this the only option the firm is giving you?

    KK
     
  4. plugger

    plugger

    This is the model that Swifttrade is built on. Let's hear from some of them on how it's done.
     
  5. Vitali

    Vitali

    Its the only option open to me right now, I was hoping to get into position trading but got stuck at this. Figured it cant be that bad.
    Since I use INET, I trade on 3 decimal place. So I would aim for quick trades, buying at lets say 3.674 and selling at 3.675 to get 5/10 per share. And at times it works alright when I can get filled on time cuz if I hit aggressively I get charged 3/10 cent per share.
    But as you mentioned problem becomes is when I get caught on a swing, even a small one like 2 cents, that usually annihilates anything I just made in the last hour which drives me close to a beserker rage at my desk.

    Sometimes I wonder if I should approach this as a daily swing trade, and buy at some point, hold the stock, hope it goes up in the next 30 minutes and then sell, thus going for capital gain more than credit gain.

    I would love to hear from some of the guys at swift trade about how they deal with credit trading.
     
  6. plugger

    plugger

    I think the hardest part of trading like this is that you will get 'hit' when the market is moving against you, ie, your posted bid is hit as the market begins to move down. Makes it harder to stay onside. Trading in shaves all day can drive you crazy.
     
  7. KevinK

    KevinK Guest

    How many shares are you typically trading?
     
  8. Vitali

    Vitali

    Well you always hope to get "hit" to get the credits, problem occurs when you get hit and the market drives past your point too fast for you to punch out and I end up getting my profits wiped out. And this happens too often, and I dont know if its something I am doing wrong or just inexperience.
     
  9. Vitali

    Vitali

    For now I have been very conservative and safe, usually doing 100 shares per trade, never going into a position of over 500 shares.
    So I start off my day with -14 dollars because of INET charges, but then I can make as many trades as I want for the day. So I have been struggling to even cover my costs, usually ending up at around -20 to -15 dollars at the end of the day. Once again, this can be much worse if I was trading with a 1000 shares for example. So I want to be able to at least cover part of my commission fee, so lets say end up at -7 to 0 dollars before I begin using larger amounts.
     
  10. KevinK

    KevinK Guest

    So right now are you just trying to learn to be profitable and earn a salary?
     
    #10     Jul 5, 2005