Daytrading Stocks

fickletrader · Mar 31, 2007

Check out some of the high priced issues like GOOG or CME. Commission is low and the volatility is there.

m_dl · Mar 31, 2007

Quote from Don Bright:

Very few simply "daytrade" any longer, opting to engage only in daytrading when being included in the new "sweeps" with the hybrid system. Focusing more on the lower risk, higher reward strategies.

FWIW,

Don
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What are the new "sweeps" and the "hybrid system"?
thanks,
m_L

Don Bright · Apr 2, 2007

Quote from m_dl:

What are the new "sweeps" and the "hybrid system"?
thanks,
m_L
More...

The new electronic trading methods employed by the NYSE. You can start here http://www.stocktrading.com/hybrid4.html

and then go to the NYSE site (www.nyse.com) for more info if desired.

Don

sdtrader · Apr 4, 2007

Quote from FXTraderWill:

I don't understand why daytrading is not a lower risk, higher reward strategy. In the first month of the hybrid, the risk was absurd as no one knew how to put in orders and market participants could not act in their own best interests. However, as traders have become used to the hybrid market, much of the chaos has disappeared - I would even go as far as to say that the hybrid market is less risky than the specialist system. I notice now that extreme price movements between ticks are less frequent now than they were in the specialist system - that is to say, market sweeps to an LRP occur less frequently than the specialist spreading up or spreading down a stock to fill a large order. This is primarily because of the added liquidity from black boxes and from people trying to take advantage of the sweeps. Since the full implementation of the hybrid market, my biggest loss has been 40 cents - and that was in a thin stock (I am an active scalper who makes between 30 and 90 trades per day). Whenever I take a loss of more than 10 cents, it is because I am trading a stock that is too thin in a risky situation.

Institutions entering orders tend not to like giving themselves the fuck print by triggering LRPs as the moves are faded with extremely high consistency. Even if a stock spreads down to you at an LRP, you can buy more if you're long or sell more if you're short and usually get out either break even or with a small loss. I've only once had to average down in this manner, and it works, because the move triggering the LRP is usually a cleanup print - it's an instutition saying "I'm done with this order, finish me off at whatever price."

I'm not saying scalping, or daytrading, is the best strategy at all. The old games of following size stepping down on the offer, leaning on bids, blowing up market shorties to squeeze people... clearly don't work the way they used to. There is a whole new world of strategies and trades - short term, low risk, high reward, scalp-based trades, which DO work, however.

People who say scalping is dead are traders stuck in their old ways who cannot adapt to the tremendous opportunity the hybrid market offers. People who claim that the risk is higher now than before are simply wrong; ask any daytrader who did not give up within the first 1-2 months of the hybrid who had experience trading with the specialists, they will tell you that extreme moves to LRPs occur less frequently than extreme specialist spread ups/spread downs. If the risk isn't any higher (which it isn't), the only problem with day-trading is that the older strategies don't work. The prints are still reliable indications of supply/demand intraday, even though they're noisier and more filled with random spurts of black-box induced panic. As long as institutions are working their orders with discernable patterns, there will be room for the adaptive daytrader.
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Congratulations on adjusting.

In my personal world. I have squeezed on average 2500/month for the YTD. That is about 15% of my average over the last 4 years. Traders in my group and others I know are in the exact same boat. Some much worse.
Specialists aren't making money. Floor brokers aren't making money. Daytraders aren't making money.

And if you think stocks are trading better and more fluid, more power to you. You are watching and trading a different market than everyone else.

May I ask if you are crushing it? From reading your post it sounds like you are killing it with big months and have this all figured out. Personally, think it is absolutely brutal...but I have enough of a nut to stick around for the next year trying to figure it out.

But aside from that shill on the NYSE message board- you are the first I have seen to actually have anything positive to say about this cluster ****. Unless I am just reading the wrong boards and talking to the wrong people.

Rootbulls · Apr 5, 2007

I agree with you completely SD. My profits are down about 95% this year . There are very few pure, low risk scalps left. I am definitely being forced to adjust my trading strategy. My office is down from about 12 traders to 3 since the end of last summer. I'm not sure who is making the money from these changes other than the black boxes.

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Daytrading Stocks

fickletrader

m_dl

Don Bright

sdtrader

Rootbulls