Thank you for asking. For starters, the basics... What is the basis of your trading setup? Are you a technical chart reader? What stocks are you looking to trade and why? How do you pick your candidates? Are you looking for volatile intraday stocks to get large moves or less risky smaller moving stocks? How important is a written trading plan and do you stick to one? Are news items trades just a side line, or are they your major portion of your trades? How important is the general direction of the market, DJIA, SPY etc for timing of your entires and exits? Are you monitoring the direction of the futures or any other thing like VIX or Trin, to time your entries/exits, or is it just a feel by tape reading the particular stock you're trading? Do you trade mainly only a few stocks to get familiar with the specialist on those particular stocks? What is your typical win/loss ratio and your profit/loss ratio? What type of % movement are you looking for. Thanks for taking the time to share, and I appreciate learning from you.
i dont know much about technical charts, i do look at the charts but i dont really base my trading decisions on them, they just serve as a quick peak as to what the stock has been up to that day, and at that time, meaning if its in a range, or is it breaking out, etc...i read tape, cause the tape will never lie to you.... Im looking for stocks with higher volatility, but not stocks that are very high priced, meaning over $100 that have big spreads, and very low liquididty...so a perfect stock to trade, will have a good degree of liquidity as well as high volaitlity....a written trading plan is good, if it works for you, if not its time to get back to the drawing board... News items are a side source of revenue, have made about 20k at least this year, if not more from trading the occasional news story.. its a combination of tape reading and watching the S&p500, i like trading high beta stocks, so watchign the furtures is imperative for my entry and exits... I do have a few key stocks that i trade where i am familiar with the specialist, so it gives me an edge on other traders... I dont really concern myself with win/loss ratios etc...i concern mmyself with taking money out the market consistently,and i have been able to do that pretty much since i learned how to trade...dosen't matter what i take out one day, or one week, or one month, if i am not able to follow through with consistent performance... as far as movement, when i do my research im looking for stocks that moved at least $.75 betweeen the high and low of the day....since we are traders, the % matters leess than the dollar amount...remember investing and trading are two completely different things... whats yor trading background?
livingston, Thanks for your responses. I've found value in them. Aslo, do you ever add on to a losing position and do you use any type of scanner to filter out trades?
The thing with the SHO program is that you can't fully gauge your risk. Previously with a short is was simply a penny risk with the short stepping down. You have to give SHO stocks more room against you and really have to understand how to read the tape. Livingston1 reads the tape very well, I watch him do it everyday. But if you can read that there is a seller in a SHO stock you can force him to step down by making him panic by eating up all the shares in front of him and putting in another offer to make the seller think he has competition in teh stock for the shares, effectively forcing him to step, and when he does you cover on him. But basically it all comes down to reading the tape well. By the time you see the size in the book or on the tape the move is gonna be over soon and you're gonna be that guy getting spread up if you aren't fast enough to flip your position or hit the ECN's to get out.
Traders I know all hate Reg SHO. Tape reading is impossible. We now all try to participate in short squeezes since they are bigger and more frequent. Big offers are almost a sure sign the squeeze is coming.
Haha, I just talked to you know who and she told me that you are sizeplaya79. i thought you might keep with your poker name, ercosux. But after your huge wednesday, sizeplaya fits nicely
How long have you been trading? I have been trading listed stocks for two years and I have noticed tape reading has become more difficult. Maybe it's just me, so I need to really work on my tape reading skills. I remember when I first started all you need to do was to go with large bids/offers and ride the stock for 25 cent+ moves. These days you have to really read the prints, size is usually fake or a signal for the end of the move. Have you noticed that stocks are getting choppier these days? If it does, is your trading affected.
Livingston, You asked what I did. I started trading in January 2000 when the market was tanking with no basic understanding much of anything in regards to trading. I would pick a solid dow component that was trending up or chanelling and tried to get say, 1/4 to 1/2 point intraday. I never watched volume, but focused on how fast the price moved in any one direction and guessed at an expected intraday movement. I had this (probably incorrect) theory that if the specialist was helping the price of the stock to plummet quickly, he must be buying.. so I would buy. And if he was running it up quickly, he was probably selling, so I would sell too. Even with the lack of experience, I was remarkably solid and consistently profitable for a long while until I had to take care of other pressing business. Since then, I have tried to expand my knowledge base and have tried various other trading methods and setups and read a ton of books too: beakouts/breakdowns, 2-3 day swing trades, technical setups etc. and a whole slew of other methods. Seems like a lot of the breakouts/breakdowns setups are false and reverse, instead of following through. I must say that the more I learned and tried to apply TA, or tried to learn other setups or methods, the less consistently successful and confident the trades became. I am reverting back to my orignal method of trading. Simply picking a good solid stock that has some intraday movement and watching the movement of the futures and volume of the stock to help time entries and exits. Intraday, I try to get a feel for a few stocks that I watch and try to get in long or short whenever there is a fast quick movement that might mean an impending reversal is imminent or that there may be intrady reversal bounce off of support or resistance, with volume confirming. But it's harder now that fractions are gone. And that's the problem. I'm making less with much more effort. Can you explain in more detail a typical trade setup? And are there any tools you are using to read the tape, like some tool that tells you the volume is going off towards the bid or ask with size? I've never been able to read the tape or the individual prints to any helpful degree. Thanks for all your help.
i started trading August '03, so havent seen any of the good times... as far as books is concerned when it comes to trading ive only read one..and it goes by reminiscenes of a stock operator..however, i have read that book anywhere between 15-25 times....always learning something new from one of his stories... Simply picking a good sotck , watching it carefully, and than watching the futures (make sure its a high beta stock), can lead to a a great deal fo profitability... As far as reading the tape, look to see where and at what price, the specialist is filling limit orders that apear on the book...naturally if hes giving price improvement in either direction, hes got a buyer or a seller there...so make sure to watch out for that.... youhave to anticipate the movement, if there is a significant move in the furtures (interday), in either direction, i just pull up my high beta stocks, take a look at where they are in the day, and tkae an initalk 1000/2000 share position, when the size finally comes in and things start going my way, i barell in... simply as that... i mean its very logical ..think about it...what going to move a stock? buyers and seller, thats it, nothing else can move the price of a stock, and in the most simplest form buyers and sellers are represented by bids and offers, in adiidtion to that if you can see what the specialist or how other floor oders are being carried out...you will be succesful in your trade.. cheers,