Look, the man is fading the mo and makes 20 to 40 cents profit, by buying from suckers and selling to suckers, none of whom realize they are selling cheap and buying dear. Who are we to question such a display of skill. Maybe we can find out how you buy into panic selling and deal with the times it keeps going down for another point or two. Maybe you just become one of the suckers selling below the bid. Frankly, I watch these very carefully, and I defy anyone to consistently pull this off. The best you could do is time the bounces and buy AT the bid, or take offers, but buying the panic sellers under the market is strictly a gamble, and a random play.
Look, the man is fading the mo and makes 20 to 40 cents profit, by buying from suckers and selling to suckers... It's all easy to say, but TMPW moved awful fast to both the downside and the upside (a couple of times each during the day). I made money in both directions, but I went with the trends (which I guess makes me one of the suckers?). Fading those kind of strong movements is asking to have your head handed to you.
Magna, Read his post he said " Frankly, I watch these very carefully, and I defy anyone to consistently pull this off. The best you could do is time the bounces and buy AT the bid, or take offers, but buying the panic sellers under the market is strictly a gamble, and a random play.
oolarinm, I read his post. And, frankly, I wanted trader1 to further discuss some of the specifics of his strategy. In other words, how he pulled off some pretty tough scalps fading the strong trends. There's no point in stock777 or you and I continuing this particular discussion.
I didn't say it was easy to do. It takes a very special kind of situation when there is panic selling and then short covering (or panic buying and profit taking). The most important thing to do is wait for the pace of the trades to hit almost a fever pitch where traders are just wacking ecn bids all over the market. You can see it on the time and sales. It's very hard to give specific examples because it's almost a feel thing and yes every once in a while your off and get in too early and either hit an ecn even farther away or buy more on the way down (can get very dangerous). As for TMPW, the opening on the stock was all over the place, if you look at a 1 min chart you can see the stock oscillated between about 37.90 and 38.80 for a good ten minutes before it broke down. I did take a couple of stops on the initial breakdown but once it broke 36 it was all over the place again. I'm not trying to recommend this style of trading, nor is it the only style I practice. It has gotten a lot more difficult to do since decimilization because everything is much tighter together. I have had some nasty loses doing this. As in every style sometimes your on and others your timing is off and you take some hits. But when you do get into a stocks rythm and it becomes almost a video game it can be very profitable.
I have about a 80% hit rate. I take a fixed 3-tick stop on the other 3. I discovered this strategy while trying to swing trade/momo trade the mini-es. I found that usually I could always pull a couple ticks out of a good entry signal. But now instead of holding out for a couple points with a wide stop, I take my two tinnies and run. I haven't had a down day in 45 Days.
I trade here in NYC.... I usually perform between 75-150 trades a day. Average share days range from 75,000-300,000 shares (daily). Because of such low commision rates I profit from 2-3 cent spreads. This is all taking into account your ECN fees for the day. I have actually ended a day with - (negative) ECN fees, we get a rebate with ISLAND . high bid low offer... as far as liquidity , yes you do need it.. average shares per position at least 1000share lots. and go upwards of 5000.
I am a heavy NYSE sclaper as well, just curious to see what other traders are scapling. I have hired TYC, C and MER for the time being. I have fired IBM numerous time, his 1X1's really urk me. Who are you pushing around?
I trade liquid and sometime illiquid positions. Currently BEAS, AMZN,RFMD and there is alway INTC, CSCO, MSFT. It really depends on the day and the markets current condition. The difficulty lies within the illiquid stocks, posting 2000-5000 share lots can be tough sometimes, unless you strictly trade the big caps , your share lots can be absorbed instantly