Effect of Decimalization

Discussion in 'Trading' started by mama, Dec 24, 2001.

  1. praetorian..

    i totally agree.. its bad traders that arent making the money.. people can make any excuse they want for failure.. most losers do..

    as far as Hitman and his income.. first of all, if he loves trading then why would he want to do something else even if he could eek a few extra pennies here and there.. trading isnt about dollars and cents.. its about being in the game.. doing the work, making a plan and watching it come together.. i think if someones only attraction to trading is the money, they probably wont be successful.. second.. over 70k is damn good for his first year.. and with the size that he is currently trading, 100k+ is in the bag for next year.. its only a matter of time before he is making the big money..

    and as for our resident "Chicken Little".. the sky isnt falling.. short term trading isnt getting harder and harder.. that is, unless we choose to make it that way..

    #21     Dec 26, 2001
  2. jaan


    FWIW, in our (day)trading, decimalization has not had any measurable effect. what has, however, is the volatility contraction: stocks move MUCH less (both pointwise and %-wise) than they did a year or two ago. (i can only speak about NAZ though.)

    our group started system research in early 1999, but for almost 2 years it remained a second-priority project, because "the market isn't going anywhere, right?". talk about a bad decision!

    - jaan
    #22     Dec 26, 2001
  3. During the bull, I was pulling in $0.5-$0.75 million annually. Under current conditions, I will pull in about $0.3million by the end of this year... this is with the benefit of many years of experience i.e. as time goes on, I get better and better. Implication: trading has simply got less profitable because market conditions aren't great anymore, there is a lot more competition from other daytraders, the market makers / specialists have gotten MUCH smarter, chart patterns don't work very well anymore because the scene is so crowded, ranges have contracted etc etc ... I am not too sure about the effects of decimalisation... it has made entry cheaper and made shorting more feasible, but the fact that there is not so much froth in the market anymore means that the positive aspects of a cheap decimalised entry are offset by a restricted move in the stock... in my opinion, these days it is all about trading what is moving and not being restricted to any specific style.

    In a nutshell, things have gotten tougher, but I don't think you can pin all the blame on decimalisation... in fact decimalisation may have made things less tough than they otherwise would have been (unless you are purely scalping the spread, in which case you are now dead meat unless you have changed strategies).
    #23     Dec 26, 2001
  4. candle,

    I think I know what you mean by "trade what is moving", but would you please elaborate on this? How do you define "moving"? What timeframe are you speaking of?

    btw, Great consistent P&L!

    #24     Dec 26, 2001
  5. Moving on any timeframe.. I do trades ranging from a few seconds to a few weeks... whatever time frame I am using, I simply stay with the trend and cut losses quickly.
    #25     Dec 26, 2001