Good article from Wall St Cheat Sheet http://wallstcheatsheet.com/trading/heres-the-proof-day-trading-is-dead/?p=20096/ Better rebuttal from T3Live blog http://blog.t3live.com/2010/10/mike-lee-answers-all-day-trading-is-not.html
I had the pleasure of talking to a market maker last night at my local cigar lounge here in Birmingham. I dont know who he worked for, but basically he said what Ive been saying, all along with others on this forum for years now. DAY TRADING IS DEAD. http://www.wallstreetoasis.com/forums/schonfeld-securities-goodbye-letter-to-traders Take it from schonfeld, and learn to read the signs. He told me that he knew people that made really good money back in the mid 90's and some of the early 00's, but most has lost everything, or a good chunk of it, and are now looking for jobs. This guy also got short the credit crises back when it was at 106.40 on the DOW, and now has some properties that he picked up on the cheap in Tampa Fl. He bought them for 25 to 40,000 a piece...houses that used to be worth well into the 100's ok thousands. According to him, hedge funds, and other large players, dont even care about the direction the stock goes...its ALL ABOUT tape volume for the ECN's... these guys get paid to provide liquidy to the ECN, and thats where a lot of the money comes from. He also uses 30MA's, fibonacci, and other tools in his analysis, which kind of shocked me to hear..I thought he would have been strictly fundamental, but no. He didnt really say how he uses his indicatros BUT he does trade news from time to time. The price of the stock is already priced in...the hedge funds know the news before the media does in many cases, and thats why you short good earnings, and go long on bad earnings buy fear/ sell greed. He averages down/up on his trades also. I forgot to ask him if he only risks 3% which is the common rule for us traders. If I see him again next friday, I'll try and ask him some more stuff.
I can understand how the bots have made a certain style of trading obsolete. But actually I think current market conditions are the best I've seen for the intraday time frame for the past 3 years, and with the dollar going down the toilet I'd imagine things can only get better. Trade small, learn as many names as you possibly can, and you'll find more than enough opportunities each day.
prob is, there's a big diff between picking off slow quotes and dumb money and trying to outgame co located supercomputers. yeah , theres huge ops out there. just more like real work.
not dead yet but definitely on life support co location is like getting the scoop a wee bit sooner than most. should be outlawed
That's the thing, you need to cede that game to HFT and focus more on the long con, so to speak. The robots can usually get away with bullying you in the (very)short-term, but it's a sight to behold when they get caught on the wrong side of the real move. Can bots panic? I'd vote yes.
Even if day trading isn't dying, this site sure is. Must have somthing to do with crgarcia being expelled..
it is the same as it always has been people think things have changed, but the markets still now, and always will move to where they are set to go it is set in advance and only a few know where it is set to go