I'll start my first post by being honest. I have been reading these forums for over a year and the time has come to ask for advice that I simply cannot find on the boards. I'll make my bio brief. -Started studying the markets in 2004. -Opened an account in 2005 and started trading. -6 months later, I had an equity curve that looked like a penis (testicles included). A wild ride that ended dramatically, with no loss and a zero tuition bill for a lesson well learned. I considered myself lucky. -Halted trading immediately and decided I really needed to develop a system that suited my trading style. After 8 months of brutally honest sim trading, I was getting comfortable with a very simple gameplan that seemed to be generating a profit with the right money management tools. The fundamentals of my particular system are somewhat limited to trading highly liquid Naz stocks with an average of 2 to 4 RT per day, at 500 to 1000 shares (I am daytrading). Herein lies the dilemma. I fully anticipated moving my account to IB from my original non-direct access broker, but given the recent volatility in the market and reading the less than favorable comments about virtually non-existent shorts available at IB (during the recent downtrend), I feel as if I have been fooling myself into believing that highly liquid Naz stocks were always readily available. My system relies heavily on shorting, as well as going long. I have, on occasion, checked IB's updated short availability list during the last couple of weeks,and lo and behold, the stocks in my "universe" are nowhere to be found. I'm referring to stocks like AAPL,SNDK,AKAM,BRCM, etc. Not thinly traded issues by any means. Now, they may be available on a somewhat regular basis, but on the most recent heavily down days, they are painfully absent. Naturally, I have several questions: 1) Is this an anomaly during heavy down days? 2) Is this an IB exclusive problem? 3) If I have to eliminate shorting on certain days, will I run into liquidity problems by increasing my share lots to 2 or even 3 thousand shares on stocks trading over 3.000.000 avg. daily volume? I have many more questions, but I don't want to be a glutton on my first day. I want to thank those in advance that are generous enough to reply constructively to this post. My goal is to one day contribute to this forum. I thank you for your patience and time.
Hey. I'm not sure I'm the one who should be answering this I'm chicken Sh*t when it comes to shorting, but names like you mentioned AAPL,SNDK,AKAM,BRCM, these are so readily available from every brokerage to borrow I would have to say you are using a crap house. As to your system- hey whatever works - your early results- -6 months later, I had an equity curve that looked like a penis (testicles included) that's not bad if it's erect. And I guess that's where I would concentrate my thoughts stay erect in your performance charts, in your chair and in your life. Long short strategies work in certain market environments and it certainly looks like we are in such a period. Good Luck. ~ stoney.
Stoney, Thanks for the reply. Actually, the crap house I was with is not at issue. My fear is that once I made the switch to IB, stocks like the aforementioned would not be available in a downturned market. If I were live with IB the last couple of weeks, that penis would have looked very limp indeed, as none were available on their short list ( I check their updated list frequently ). I need to make the switch to a direct access broker, this is understood. But no shorting? During periods of high volatility? That would make my system worthless. A case could be made for switching over to futures, but I haven't studied the correlation between the two. Thanks again and BTW, I really enjoy your insightful posts.
big appl Stock index futures are your game. You can play the naz (NQ) e-mini and short your heart out with ZERO problem. Moderns do not trade stocks..........that was your fathers game. ..
So, if I do study the correlation between my high vol. NAZ stocks strategy and index futures, and find that there is some promise in making the "crossover", I would be confident that a short would fill as fast as a long? I mean, I prefer stocks because they are the instrument I studied, but I can be Gumby. I would still like to see an answer to my original questions though...