dtrader, no offense but this is a bigtime loser-meme people who think the reason they failed are that mm's are "gunning for their stops" please. spare me if you are so worried about, then trade dow index futures, since MM's are not going to move the entire dow jones futures contracts 5-10 points just to hit your petty 1-5 contract stoploss it is true, especially in some thin issues, that MM's can move the stock (and play games in Level 2) to try to fake people out, shake out weak hands, and gun for levels where they know people will set stops (since TA concepts are widely disseminated in many cases), but that's part of trading. another part of trading is that MM's UNLIKE YOU have to provide liquidity. they HAVE to buy weakness and sell strength. ALWAYS. you don't. you can capitalize on market opportunities and move nimbly in and/or out when the time is right.
Think of it this way. A very good, active day trader might do 1 1/2 cents net per share traded. 2 is very exceptional, lots of guys would give up a lot to be able to do 1 cent per share net. If you figure the average loser is giving up maybe 3/4 of a cent on average to the spread, and paying maybe 4/10ths of a cent per share each way, he's already fighting a pretty good headwind. Figure 40 trades at 1000 shares each. Thats 80 times in and out for 80,000 shares on the day. He's got to gross about $400 just to cover commissions and sec fees. Most people don't estimate what they lose in spreads and commissions because it's an intangible cost, but it adds up. Many traders quit, not because they've had spectacular blowups, but because they bleed to death slowly from friction costs and not making enough to live off of. With hard work, and enough time, I'd say most semi-intelligent people can figure out the basics of trading well enough to make a little. However they probably run out of money or patience before getting good enough to overcome the non-zero sum aspect of the game. Ask 10 guys who gave up and took the business seriously. I bet 9 of them will say the same thing. I'm not talking about the daydreamers and slack-asses who never should have gotten into the game in the first place.
I'm studying, nearing a reentry into the markets, and caught this quote from Baron Rothschild, on how he made money, that I got in Livermore's Reminiscences, to wit, "I never buy at the bottom and I always sell too soon." Sounds like your method. You don't worry about bottoms, you buy the biggest gainers. And you always sell too soon, ie. at eod. After I read the quote I figured it could be restated, for shorts, thus, "I never sell at the top and I always cover too soon."
Usually you have to observe the market and learn by yourself. The other alternative is to have someone show or teach you.
Traderich, Certainly your method has a harder time during bearish markets. I would be surprised if it produces any positive results during a solid bearish market. Neet
How do you know it won't work during a bear market? If it didn't maybe I would short the % losers of the day. The method appears to work, and has worked for the past 2 years. Note that it works on average 50% of the time. Does not sound great, but the days it works, it really works, and the days its off, its generally not as bad. Unfortunately, you are just one of the folks who obviously is lazy and not interested in doing any kind of research or 'work' but wants something handed to them.
First of all, no reason to get defensive. It's not like I'm picking on your children. I'm not stating any facts, I'm simply speculating because I've been trading for a while, and well it was simply a speculation based on past experience. During bear markets not even farts underwater go up. For what is worth, I only daytrade futures (yes long and short) so I'm not interested in switching my method because some guy posted a "system" that delivers, on average, 200+ bucks a day. Hell, there are well known opening gap trade methods that can be automated to achieve on average that result, with similar capital, without doing any research at 10 am. Needless to say, I wish you the best with your system and if it does not work during a bearish market perhaps you can do something with the biggest losers and short them. Truthfully, good luck.
I see this every day, every trade. But not many will agree here. One day I am gonna have to record my trading and specifically point out all the games that are being played. Think about it, if all the little traders on this board can come up with ways to trade against the losers, then don't you think the big shots are using the same reverse psychology methods against us? Face it, day traders are the weakest participants in the market. They are the most vulnerable. Knowing this fact, the MMs, specs, and hedgies can all easily trade against us. We must be blind to not realize what is being done to us. I bought gww today at 73 and held on for 20 minutes waiting for 74. It goes to 73.31 and back to 73 where the size is, 73.31 and back to 73, 73.31 and back to 72.90, I'm out. 10 minutes later it's at 74.50...Got screwed in crs maybe six times today the same exact way as it climbed to 114. I get in and it stops going up and wiggles till I get out. Then it blasts away. What do you think is happening here? Someone bigger than me is trading against me until I get out. This is highly prevalent . When I tell my mentor this, he asks me, "then how come you make money almost everyday?" I make most of my money by scalping and leaving so much on the table and protecting my gains. Most of my trades eventually move at least another 50 cents in my direction. I realized this and a couple of weeks ago I tried holding onto my trades for a while and if you see the pnl thread a couple of weeks back, I got murdered in every single trade which eventually moved in my direction as soon as I got out. That marked the worst week in my career. But then, occasionally I do make a point on a trade, but that doesn't come easily. I have to go thru a drawdown first, so that the guy who is trading against me can exit his position profitably. Hey, if this make some of you laugh, go ahead laugh, but it's true. Can I post videos here on et? moderators?
Hey Whitster, I hear you on the daytrader loser "meme" mentality. However, " another part of trading is that MM's UNLIKE YOU have to provide liquidity. they HAVE to buy weakness and sell strength. ALWAYS," strikes me as an even bigger meme. Where does the law say they HAVE to buy weakness? No they don't. In fact, I can point out several instances where say the market tanks, and a major volume stock, sits on the bid all day long with 100 share lots or less. Even has moments of practically zero volume for periiods. Anyways, I've seen enough of level II to know that they in fact DO move the stock the way they want it to and will sit on it all day long if they don't want it to go in the direction of the market. And there are studies out there, as well as fines, that show this as well. I brought this up just to make the point that taking the other side of your original losing position doesn't neccessarily offer an inverted outcome, because each time you enter a trade you become one more bit of information for the brokerage houses to take advantage of, if it favors them.