The new hybrid system and scalping equities

Discussion in 'Trading' started by FastandFurious, Sep 8, 2006.

  1. Not exactly. You're at a chop shop, so they're probably charging you .0075-.008 all in, so it doesn't matter. But if you get out of there someday you will see the pricing difference between ECNs and DOT varies for things like adding and taking liquidity. It's still more efficient to send your orders to DOT when taking liquidity, but it all really depends on the situation you're in at the moment. If you're going to get spread up/down 3 cents on a market order with the specialist, it doesn't matter if quickly hitting arca to cover costs more per transaction.
     
    #101     Sep 10, 2006
  2. how would one go from a chop shop to something larger? Everyone has to start somewhere I guess...
     
    #102     Sep 10, 2006
  3. Yes, that's true, but a lot of these firms trap new guys with high rates for a long time because they make it seem they have no other option. I'd suggest just calling other firms, mentioning your volume, and see what they rate they will give, you just for your own benefit. If you are doing around 30-50k a month, that's the beginning of a pretty profitable basis for scalping, so you need fees that split your profit fairly with you and your firm. If you're not up to 30k yet, you might afford to stay for a while. Just know that your fees have to drop when your vol increases or you will burn out.
     
    #103     Sep 10, 2006
  4. it's true, the fees make it that I can't afford to scalp.
     
    #104     Sep 10, 2006
  5. whats your daily volume?

     
    #105     Sep 10, 2006
  6. from scalping- around 20k +

    but next week I will approach a new strategy that I have been working on.

    I have noticed myself that scalping is difficult lately, and the risk/reward isn't as good anymore, I just want the most bang for the buck from commissions.
     
    #106     Sep 10, 2006
  7. what are you currently paying (your rate, if you dont mind me asking)?

     
    #107     Sep 10, 2006
  8. I'd suggest not diving into scalping as your main style just yet. It's excellent for limiting your risk as well as giving you the best look at how a stock moves by watching the tape, but you can't exactly afford to practice it just yet.

    I'd incorporate longer holding times on small size, using chart analysis. This will give you a broader view of stocks and the market, taking some of the pressure and confusion away from tape reading, while allowing you to plan and measure on each trade how much risk you take, instead of just guessing your risk from incomplete scalping techniques. It will also save you from overheating.

    Wait till your rates approach .005 or below before you focus primarily on scalping. This is just my advice though, and I'm sure others consistent scalpers like Steve could offer better advice.
     
    #108     Sep 10, 2006
  9. right on, my new strategy incorprates chart analysis. however, as I mentioned earlier, I first learned to scalp, and my personality came with it, fast, in-out, don't wait, and as a result, my patience went with it. But I look forward to something new, especially of the upcoming changes, and I'll go where the money takes me.
     
    #109     Sep 10, 2006
  10. Dumb correction: 30-50k a day.
     
    #110     Sep 11, 2006