Stock trading getting worse

Discussion in 'Trading' started by silk, Apr 11, 2003.

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  1. silk


    Those that day trade stocks know what i'm talking about. Daily ranges of stocks continue to contract. More importantly, there is no longer an ebb and flow in the stock. The price just sits there because no trading is going through. Rarely do you ever see short sellers stepping down or temporary large buyers create a short term disequilibrium for you to trade around. I used to pick off short sellers all the time, buying the bottom of the move after they knock a stock down 20 or 30 cents. You just don't see these trades anymore. A 20 cent abberation that can be bought in size just doesn't happen anymore. The stock price is static most of the day. I see stocks that used to have $1.5 daily ranges now trade in 80 cent range, and most of day its a 20 cent range. With the only chance of the stock budgeing a dime in your favor is if futures rip a few points in your direction. If futures are not moveing, i'd say that 95% of the stocks on my screen arn't either. It seems that 95% of the volume is arbing around the spy's.

    Today i made money by shorting the open and trend following the futures. Futures fell 15 points so i made money. But thats not what "stock" trading is all about. I may as well be trading futures right now.

    I thought this trading environment was the result of the War. Everyone glued to the futures (is the mkt going up....or is the mkt going down). But now i'm not so sure. The War has faded into the background somewhat and still stock trading is horrendous.

    I would like to hear other peoples thoughts on this matter. Especially those that day trade NYSE. With every day that passes i fear more and more that some fundamental shift in trading has occured. Lets hope this is not the case.

    I think over the past few months it became unprofitable to daytrade so people stopped trying. Perhaps Funds that used to shift in and out of sectors daily have stopped this activity, and are just sitting on what they have. As it became disadvantageous to have a high turnover.

    What are other people doing in this environemnt? For me, if i trade very well i make small, and if i screwup at all i will likely lose big after commissions and slippage.
  2. bobcathy1

    bobcathy1 Guest

    take teenie weenie profits as often as you can. Move into ES or NQ for leverage......that is my best advice for choppy markets.....and change your strategy....there are ones that work fine.
  3. I here what you are saying. As far as what other people are doing in this environment -- the people I know are either living off old money, hanging it up and looking for a job, or switching to futures/currency trading? The office I am in had about 25 active traders 4 months ago. Now there is 6 and I know 2 are quitting as soon as they find something else to do. These traders traded both NYSE and Nasdaq. I also know a few that come in everyday but only actually do a trade every 2 or 3 days so it has become a waiting game for them. The only problem with just trading stocks off of futures moves, as you probably know, is that several days a week we don't have a 15 point move in a direction. We have 6 hours of chop in a 5-8 point range.

    I am trying to get a prop futures deal put together for myself because I know of many more futures traders putting up decent numbers then I do any stock traders at the moment. I also now believe it will be this way for awhile and already feel I am a little behind in switching over. I should have switched awhile ago. I feel now is the time to move over between the rule changes with the NYSE, SEC, dependecy on specialist for getting decent fills to profit in the low range environment, and low scalability of many intraday strategies. With futures it is strategy dependent but at least some of the other concerns for trading are not there. I would rather trade a 15 point in the futures with the ability to easily get into 100 contracts if you wanted then trade a stock with a 40 cent move with 10 cent slippage on each side.

    By the way Silk what are other traders doing at your office in this environment? I am assuming my office is fairly typical of many offices at the moment.
  4. Kaizen


    What works fine? Don't you keep changing strategies yourself because nothing is working? Where are you percentwise on the year anyway.
  5. I hope bobcathy1 isn't going to tell us Don Miller's strategy works
    in choppy markets. I really doubt if it does. Or chimp style either... :p
  6. bobcathy1

    bobcathy1 Guest is none of your business how much I make. I have been trading off and on because of health problems for several months now. And I am always changing my strategy......that is the only way to survive trading.
  7. just curious, i've been hearing alot of people moving to futures and fx. I'm wondering why? I know it's hard with stocks right now (personally I'm just refusing to trade till I see some more tradable conditions, I'll wait a long time if I have to but I don't see any point in making my broker richer right now) but just wondering what's the edge trading futures (besides tax and leverage)? I mean no matter how hard it is right now, I can still see some edge and patterns in stocks. But Futures and FX, what's the edge? Would be interested in hearing how people are approaching these alternative markets.
    As far as the question of the thread goes, people seem to be dropping out every day, literally. Churners who trade short-selling/filters/scalping are desperate to cut costs. Those still paying over .005/share all in and .015 bullets are basically not making anything and working for their brokers/LLCs (they should be shopping around for better rates). LLCs are making a killing ripping them off. Statarb guys are getting killed. One fund I know of lost their entire year in one week last month, after a horrendus year for that industry in general. Two of the best stock traders I know of (both made eight figures net in 2002, no losing months) are treading water this year. So, the equity world seems kinda tough. Suprising that LAB is doing so poorly, I thought specialists would be doing alright, but apparently it's tough all over!
  8. bobcathy1

    bobcathy1 Guest

    Don's strategy has been working fine for him.
    I have changed to a totally discretionary method. Today I got 12 points nose on, no bogeys.
    I notice you do not mention anything helpful either.
  9. bobcathy1

    Maybe I have been usefull. I have pointed out the fact that
    MA crossover systems DO NOT work in choppy markets... :D

    No wonder everybody is always selling their Don Miller tapes on ET... :D
  10. bobcathy1

    bobcathy1 Guest

    It is because the moves are leveraged therfore exaggerated. I am poping off one and two point scalps all day. 10 pts=$500. I trade multiple contracts, so that can be two trades. The indexes are leveraged, and you do not need 50k to trade, 10k will do nicely...even 2k if you are careful.
    However leverage is a double edged sword. You can go down fast too......
    #10     Apr 11, 2003
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