How many cents can I expect to take out of the market?

Discussion in 'Professional Trading' started by fatrat, Sep 16, 2005.

  1. fatrat

    fatrat

    So, here's my dilemma:

    I trade only 100 shares at a time on the NYSE. I'm trying to build up some consistency, but I'm still a losing trader -- but barely. I've lost about $3000 since I started, but the loss rate has been slowing down for the most part. I'm starting to see winning days, but they are still scattered and not very strong.

    Most days, I am up at least $25-$40 after commissions at the peak. (Key word is "peak.") At the end of the day, I usually have taken out about 40-70 cents from the market -- this is from mid-August to September, since that is roughly around when I started sticking to 1 strategy.

    At the end of the day, usually that $25 to $40 might become < $15 or even negative, because I'll overtrade and piss away all the profits in commissions. Now, I know what my problem is -- I overtrade. I'm damn good about cutting losses, but the losses do add up.

    However, I can't seem to figure out what my expectations should be like. I trade the same exact NYSE stock over and over during the day. (I'm looking for another NYSE stock to trade. I like stocks that trade from 1-4 mil in volume, are under $80, and flat out MOVE at least 3-4 days a week. Got recommendations?)

    Can someone make some suggestions on how I can correct my behavior? Are there other people who went through this problem? How many trades should I make, or how many cents can I expect from 1 stock?

    Also, I have developed an eye for when the specialist or floor brokers are involved in a particular stock. Lately, in the stock I have been trading, there hasn't been much activity on behalf of the floor brokers or the specialist. Is this a sign that I should be looking for other stocks to trade?

    I hit a solid 25 cent move today when I saw floor broker/specialist activity on the tape. But there was only 1 such opportunity. I assume that these opportunities might be more prevalent in other stocks?

    Comments would be appreciated.
     
  2. Your expectations per trade will probably differ fairly dramatically however on a per share basis most intraday traders are only making 1-3 cents per share.

    I take that back....most "profitable" intraday traders make that.

    I'm sure someone will post that they make a lot more than that, but i've seen a hell of a lot of blotters and trust me I'm being generous to say they even make that much per share.

    That may seem absurd if you haven't been trading very long but i assure you it is true. A friend and I last winter broke down a guys blotter that made over 2 million last year....he swore it had to be a lot more than a few pennies cause he swing trades, holds over nightand takes dollars not pennies out of his largest trades. You know what the per share was. About 5 1/2 cents!!

    It all averages out, for everytime you can catch a run in a stock and hold all day and make 75 cents you scratch dozens more trades usually for 2-3 cent loses or 2-3 cent gains.

    Don't be discouraged and don't get caught up in trying make a static amount of money per trade, every trade is dynamic and will have a different risk reward profile, just focus on taking it one trade at a time and maximizing that trade.

    Also.....don't move up in share size until you are making money....but truth be told its hard to trade 100 lots and make anything on a net basis, that is why the per share is a pretty good stat.

    If your making 3 cents a share now but onlytrading 5K shares a day your screwed but make 1/3 of that....a penny on 100K shares a day and even if you have a high commision rate like 1/2 a cent all of a sudden your taking home 500 bucks. (your trading worse (per share) but your making more, cause of the size.

    :cool:
     
  3. Cheese

    Cheese

    Well there are those who are very smart and are very very few who know how to take money from the market. There are those who are smart enough not to join the 95% who fail.

    Then there is you; one of the many dummies with an unrealizable fantasy of becoming a winner.
    Next step: just face up to it.
     
  4. fatrat

    fatrat

    This sounds like a reasonable metric. Thanks for your advice.

    I know this depends on the stock, but how many setups do you think there are per day on an average stock on the NYSE? For example, a poker player will say it's good to win "one pot" per hour.

    Today, for example, on DNA, I only saw ONE solid short setup where I KNEW the big guys were offloading shares, and I caught the move. (Short @ $90.20 -> cover @ $89.95)

    On BA, I saw another solid short.

    Now, had I stuck to just those two trades, I would've made $32 ($25 on the DNA short, $8 on the BA short) net, the entire day. I could've taken size on those trades too, because the books were tight and had a lot of liquidity.

    Now, on 1000 shares, that'd have been $320, I guess. Hmm, not bad. Maybe all I need is just a lot of patience to look for those super solid setups, instead of trading the noise.

    I just wish I had statistical studies of how frequent these trades happen, so I could eliminate this overtrading problem.

    I think overtrading is also a problem dealing with boredom. I need to somehow work around the subconcious need for excitement.

    Man, ... trading is no more than a hunt for mental demons. I have so many.

     
  5. WMT is a good stock to trade intraday. Back when I was trading it I would shoot for .20 to .40 on each trade. Watch the range as it likes to trade between .70- 1.00 intraday ranges. I no long trade it and strictly trade YM becuase of days like today where if you expected the market to go up and went long WMT you still lost money.

    http://finance.yahoo.com/q/bc?t=1d&s=WMT&l=on&z=m&q=l&c=&c=^DJI
     
  6. fatrat

    fatrat

    Cheese,

    First, I already take money from the market. I just don't take money from the broker. That will take some work.

    Second, lick my nutsack, bitch. I'll be taking your money with regularity in 2 years.

    You can laugh now, but you won't be laughing forever.

    Cheers,

    -Rat


     
  7. I hope your per 100 share execution cost is no more than $1.00

    :)
     
  8. fatrat

    fatrat

    Seth, I have a very good commissions structure. It's definitely geared towards scalping.

     
  9. well i was wondering how come every one is trading nyse shares
    what happend to the nasdaq
    i have seen a lot of pll are either pmaking or trading stricly NYSE shares is there is a reason
    was just wondering - ?????????? :D
     
  10. NYSE is more inefficient, and inefficiencies are much easy to take advantage of.

     
    #10     Sep 16, 2005