Most crestfallen stateside cocks who visit Thighland and Bangcock would love to have a chat with this fellow, Price, who goes up and down every day, week, month and the swings are getting more significant .......
Druckenmiller Calls It Quits After 30 Years as Job Gets Tougher http://www.bloomberg.com/news/2010-...-30-years-as-hedge-fund-job-gets-tougher.html
I warned you of this years ago. That said, I still see plenty of opportunity. Thing is, its unpleasant as hell to trade it.
I echo what you are saying, I still do trade alot of shares discretionary through a level 2 system(lightspeed). Most days I trade 300,000 shares but you will never catch me with a large position in a so called liquid stock. AAPL typically trades 20 mil or more shares in a day but try trading 10,000 shares in out of that or similar stock and you will get destroyed. I have spoken to many people about how to get my orders off in the most effecient manner and they have suggested using credit suisses dark pool for blocks. I find that it helps some of the time but still I think the best advice for any discretionary stock traders still left is to trade small in individual stocks.
It all has to do with order flow.....most uninformed orders get internalized now...making it very difficult to get filled on the bid and the offer in illiquid stocks. This makes scalping and market making unprofitable strategies. Even in liquid stocks, the only time you get filled on the bid or offer is when the quote rolls on you. Check out Bright Trading comments on this: http://www.sec.gov/comments/4-602/4602-29.pdf
Exactly why "liquid" stocks just aren't that liquid, now if they make internalization illegal will trading improve? I doubt it, institutions would find another way around posting order flow.
Internalization refers to broker-dealers trading against their own clients. This isn't the same as an institution (such as a hedge fund) using a dark pool to post liquidity sotto voce. Enforcing a ban on it would be straightforward -- a B/D does it, it's no longer a B/D, clients close accounts and go elsewhere. End of story. Banning it most certainly would improve the efficiency of markets, although it might not make (all?) traders profitable, as there's a lot more competition now and the market is far more efficient as it is, compared even with say 2007. The SEC has made motions to ban B/D internalization, but B/D's fight tooth and nail to keep it as it's a tremendous source of profit, and it's sort of "grandfathered in", as it's got historical precedent. But what doesn't have precedent is the growing percentage of internalized trades over the past few years, and that's gotten some peoples' attention. http://www.tradersmagazine.com/issues/20_304/nasdaq-internalization-dark-pools-105375-1.html
the discretionary scalping day trader is the biggest victim of the fraud perpetrated by the HFT's and the two tier market system. the market is mostly pure ground and pound. if it moves it generally pukes out the entire move at once and then quickly returns to ground and pound. the smooth free flowing action is not there. BUT...if and when the market resumes its deflationary death spiral lower we'll get a return to the crazy trading of 2008. if anything, the trading will be even more insane cause the algos pack up and flee when things get dicey..
With high frequency trading all the rage I have switched to low frequency trading. When high frequency trading is no longer "in" then it will be time to switch back to it.