Does anybody really trade on size any more?

Discussion in 'Trading' started by WallStWiz78, Jun 1, 2004.

  1. I started trading a little over a year ago. We were all taught to trade by looking for size that is stepping. It used to work, but lately the sizes just steps for 3 to 5 cents and disappears... gaps down 10 cents and everyone gets out there. Is it just me or is everyone else having the same problem? And what is the best way to trade to consistently make money?

  2. I am more intersted than Wallstwize to know the answer?
    Thanks in advance
  3. abogdan


    I trade on sizes all the time. But it only works with certain volatility levels and trading volume. Use average true range indicator multiplied by volume to detect the periods of "dry market" to avoid your problem. It works for me.

  4. Mecro


    Im sure Boris and Kobe would know.
  5. not familiar with your market so don't know about your first question. As far as making consistent profits... design a system that makes consistent profits to your temperament and objectives. Then just follow the signals without hesitation or doubt :)
  6. dgmodel

    dgmodel Guest

    where were you taught world co??? i know a lot of guys from there traded like that in the past... however in this market it only works if you have the right mental stops, and sometimes the balls to sit through a 10-15-20 cent tick in the opposite direction... what average daily volume size stocks are you trading???
  7. tradARRR


    is trading on size the reason that you lost $25K ??

    if so, then you need to realize that size is not an effective trading tool, used alone. TOO MANY people like yourself have been trained to just jump in front of big offers/ bids. They are usually fake and are pulled or you run the risk of a floor trader/ institution sweeping the entire size as you are left stranded with your 2000 share market order. The specialist will gap it after the size is filled, fill you at a terrible market fill along with some for himself, then bring it back in 3-8 cents (usually) to make a quick risk free profit.

    Scenario: you buy stock at 50.50 because you see 50K bid at 50.48. Market starts to sell off, people panic and try to hit the bid. Stop orders are triggered, someone with a big position hits it as the specialist changes his market to 1x1, meaning that your order is not filled. The specialist moves his market to

    50.35 x 50.50
    5000 x 28000

    Now people see size on the offer and think "oh, shit- time to get out." Then, there is a rush of market sell orders and the specialist is happy to fill 40K down at 50.35, grabbing 15K for himself. Everyone who WAS long got screwed. Now the spec throws up a bluff bid at 50.38 for 30K as the enveloping players and those who are averaging in are desperately trying to get stock- they think the "buyer" is back. The spec moves the market to 50.38 x 50.45. More buyers coming with orders. He holds them for a little while, then prints a block at 50.42 and is out of his 15K position from earlier at a $1050 profit. Only thing is, he knows a huge sell just came in at 50.44, so, just because he can, he shorts in front of the offer, then displays it on the open book so everyone will sell, pushing his position in the desired direction.
    and so on............

    its a simplistic example, but you get the idea. People who trade in front of size are like deers in the headlights- as soon as that size gets taken out, they freeze, panic and market out. I've tried trading in front of size and have noticed that:

    commissions + a few cents average/ trade < the few size trades that are 10-15 cent losers = an unprofitable day.

    sure, there are people who want you to actively scalp, but these people mainly own trading firms :D

    to each his own, just my .02

  8. But I think it is just DEER not Deers
  9. Not Worldco... Assent. I'm doing about 50k to 65k a day consistently, but I've been making money in one trade and loosing it back on the next. At that rate I'm just generating commission for the firm and not my own pockets.
  10. Dude that is the worst way to trade! Size is meant to be lifted or whacked! You should do some research and believe in your stocks. Let me ask you are you the type of guy that buys 1000 shares in front of 45.00X45.03 50X10? Then when some one whacks the bid you Direct your stock out? You should study Time and sales each day and try to determine if there is a buyer!
    #10     Jun 2, 2004