Maverick, I agree, daytrading for me is a stepping stone too. I'm 26 years old so I am still young and I am sure I will get into options at some point, hopefully not too far down the road. I have been daytrading for 2 years now and am starting to make good money (well good enough for now, approx 100-120k a year). I havent reached the burntout stage yet, but I can see how that comes to be. Right now my main focus is being a better and better trader. Any other advice you have for someone in my situation?
Please tell me this is not what you are teaching to your students in your boot camp. Either this guy shortseller is misleading the training he received with you, or you guys need to seriously re-think your training program The need to personally attack anyone is not needed in the discussion. Many PROP trading firms allow the trader to trade how ever that individual trading style is. (right or wrong) its the traders capital that is ultimately at stake. That Freedom can be considered a blessing or a cursing.
Someone mentioned on a previous post that if it was so easy to front run size it would be automated. I managed a small group and we had a grey box (would automatically put a trade on and trader would exit) that was based all on front running size orders posted on the NYOB. It relied on using the NX system to get fills as soon as the orders posted. It would automatically take the bid up to .10 up or hit the offer depending on if it was a size offer or bid. We scanned only stock with average volume of 150k - 1.5 million. I can attest that the only time the box had any consitent profits was when the orders either stepped up or down. And the only traders who actually made money were the ones who could get out of the bad trades (the ones that didn't step) with a minimal loss and flip to the other side. In fact I saw more potential on taking the other side of the box that I eventually put the box on simulation, saw what trades it wanted to put me in, waited till the move didn't materialize then went contra the size. Moves were much more explosive when everyone who was gettig in becuase of the size paniced out. When the orders stepped it was a different story, but even then once the order was gone if nothing was behind it it was going right back down. With that caveat in mind, I'm going against the size a majority of the time. Like my moniker states I've been around for awhile and haven't seen posts as valuable as Maverick's in a long time, if ever. Thanks for sharing your insight Maverick. Newbies could make base a system off his posts.
I've even heard that some prop firms black box their own traders and take the opposite side of their trades, i guess under the assumption that traders are wrong more than they are right. Just a rumor I heard though, dont know how much truth there is to it.
My 0.02 You cant read the tape out of a single print, you need to compare how the bids and offers change at different price levels. As that would tell you how bulls/bears are reacting to the market at any move. Let's say stock abc opens at 34.01 you start seeing large offers 5000share blocks that drive the price all the way to 33.96 where you start seeing large bids of up to 20000 shares being opposite only by offers mostly below 2000 shares, then the price starts to move up and the bids continue to hold a nice size, and you can tell that bears are struggling to hold the price down, they put resistance at 34.20 and the price stops climbing but the bids are still much higher than the offers, and much more numerous, the price goes down to 34.15 and the bids start becoming even larger, the price rips again towards 34.50 where you see that the size of bids starts to diminish as the size of offers increases, its time to sell. The absolute size ofa single print tells you nothing, its size in relation to the current price and the prints before that one tell you everything.
This explanation is about at a kindergarten level of trading. No offense, but what you are describing isnt even tape reading, you are just looking at bid and offer sizes. I'm not usually a jerk when I post but you should go back and read through this thread so you can get the gist of what it means to tape read. Read Mavericks posts, they will be very helpful.
And, btw, sometimes it take only one print to have a very good idea where the stock is probably headed. When the specialist fills a decent size bid or offer somewhere he shouldnt have, it can clue you in to the near futures price action.
None taken. I did look back throught the threat, and after thinking about it you guys are right... when you trade large blocks you shouldn't show your hand till you're done. sounds reasonable. How wouls you apply this to a stock like jdsu or sunw where the average size on any price level is in 100k+ ranges?