trading nyse specialists

Discussion in 'Strategy Building' started by burntem, Sep 16, 2005.

  1. burntem


    Just started trading with a prop trading firm. The guys I'm learning from are succesful Their approach is to learn the specialist for a specified (3-5) number of stock and trade according to what I observe him doing with the stock through out the day. I am discouraged from reading any books because my mentor believes they are a waste and garbage and to not worry about them. Just listen to him he tells me. I am eager to learn from him but I feel like I may speed the learning process and learn more by reading quality trading books.
    My questions to experienced traders
    1) How do you find the approach to trading "the specialist" ?
    2) What do you think about the no books listen to one trading groups style of trading?
    Any help is appreciated.
  2. It all depends on *how* successful the people you're involved with are. Have you seen their numbers? Can you verify it? Is it something you can emulate/believe in? How long have they been ''successful"?
    Nobody's gonna tell you anything worthwhile in any book, that's for sure. Most authors just copy each other.
  3. Htrader

    Htrader Guest

    Its a dying strategy that will have no relevance once the arca/nyse merger goes through. I suggest you broaden your market view and look beyond scalping the specialist.
  4. xbrxx


    1. You are a little late to the whole "specialist" game, but there is still money to be made. The NYSE is and currently evolving to more electronic based so the whole tape reading method might be dead in the next year or two. Just don't get hung up on one method of trading and stay on your feet and evolve with the market.

    2. From books you will never learn how to trade. Thats not to say that books do not have their benefits. What books are able to teach you are what is necessary to become a sucessful trader(discipline, hard work, and ability to control emotion).

    BTW, what firm are you trading for and what branch? PM me if you do not want to give out the firm you trade for.

  5. Weasel


    Ask to see your mentor's K-1 from last year and his latest monthly p&l's. You want to know these guys are the real deal. At my first prop shop, the manager was making nothing from day trading. He made all of his living from longer term trading....selling option straddles against stock positions. He was already wealthy and didn't need to make any loot day trading. He was a horrible mentor. I wasted time and money on his bumbling trading tactics.
  6. ETG or Generic?
  7. Books that are specific about HOW to trade will be counter-productive.

    Books that are very general (trading stories etc) will help motivate you and keep you excited about trading.
  8. I have been in contact with some prop guys who trade
    NYSE and specialists, they say it's solid way of trading.

    Meanwhile they say the method takes 5-6 monthes to
    master, or many can't pick up the style because so much
    descretion and emotion barrier involved.

    They say it can be automated also, so i am wondering
    how the hell then they make any buy/sell decisions :confused:
  9. A dying edge, just like Htrader said. The NYSE change toward an electronic platform is inevitable no matter how much you want to deny it. There are way too many signs, the Hybrid system, the Arca merger, the recent SEC decision about Imbalances. How much longer it may take, who knows, but it's gonna happen. I think when Fidelity & Citigroup take steps to establish BSE as a competitor to NYSE's specialist system, it's obvious that the good ole boys club has got to go if the big board plans to survive.
    Also, the specialists are becoming more and more abusive since they have limited time and day traders are primary targets. Being on the right side, makes you even a bigger target since thats the stock the specialist wants.

    Not necessarily true, I think Richard Ney's books about the NYSE gang are useful. Wall Street Gang gives many insights into the specialist mindset and the scam that is set up. Once you understand the basic scam, you will start getting an idea how to get on the right side.
    Also, Reminisinces of a Stock Operator can always help.

    I guarantee that if you bring up these concerns to your group leader, he will tell you it's all nonsense and that only losing traders will say stuff like that cause they can't read the tape. I had the same attitude when making 500-1000 by 11:30am from the NYSE tape felt like one of the easiest tasks in the world. Too bad it has been getting worse with every month and while it's party due to a tougher market, a lot of it is because the specialists are milking their dying racket for all they can. You can still get some experience on stock movements, price & volume, and charts so it's not like it's a total waste of time. But just realize, NYSE is a played out game.

    I'm guessing you're with a downtown Generic group.
  10. Sharko


    I've been trading NYSE for 2 years now and I can tell you the only way you'll learn how to trade is by trading. You will learn very little of value from reading books.
    #10     Sep 17, 2005