Oh, there are quite a few people that do this. That size is not a problem in ten yr notes, 30 yr bonds, and ES. Depends on time of day and action of course. When you are aiming for 2 tics, 5 to 10 times per day doesn't cut it. These guys are constantly in and out, using DOM, tic charts, and little else from what I've seen. Also, they don't pay anywhere near retail. They do the Corp llc deals where its basically like having a seat on the exchange. The broker, as a middle man, just tacks on a few cents extra per contract. Some of these guys DO have seats, or lease them.
This is wrong thinking. My monthly commissions trading stocks amounts to normally $20,000-$30,000 a month. I make a great living and have been doing this for 9 years now. Commissions are a cost of doing business. In fact probably the best trader I know comissions were over $500,000 last year. He has his cost structure very low but with some days trading 2-3 million shares commissions add up quickly. Every time I have tried to lower my monthly commissions by trading alot less I have had limited success. Conventional thinking on this board and many other sites is that the less you trade the more money you make. Everything I know about trading says this is wrong. I know too many succesful people who do the exact opposite.
Your logic has wounded both legs. If you are not daytrader in standard brokerage you have 2:1 leverage. After you are considered pattern day trader you will get 4:1 leverage. /offered because they expect get serious fees from your daytrading activity/. Because of more leverage they are telling: we need your liquidity and we enjoy fees that you will pay. More leverage - more eventual danger therefore bigger account necessary, it should offer more protection to the brokerage because you need not that often go to the 100% possible leverage.
Re: the comments assuming scalpers make "the lowest trading income" and represent "the lowest wall st. profession" and etc. ... The scope of the issue should not be scalping alone, but the sophistication and/or the effectiveness of the scalping. Jim Simons' Medallion Fund, which is part of his Renaissance Technology hedge fund family, is involved in very sophisticated scalping. This is pointed out in the following link: http://www.bulldogtrust.com/trading.htm If you don't want to read the whole thing - this is a key takeaway, IMO: "Anecdotal evidence indicates Medallion's trading volume is ** 'several percent' ** of NASDAQ's annual $10 trillion total, implying something like a half trillion, and a recent year's profit before fees was 80% on its $5 billion in assets, or about $4 billion. Dividing profit by volume shows a tiny trading margin of the order of three quarters of one percent. Dividing volume by its $1 billion or so portfolio shows annual turnover of 400 times, or about 2 times a day." The effectiveness of this approach is pointed out by the following stats: "Since its inception in March 1988, Simons' flagship $ 3.3 billion Medallion fund, has amassed annual returns of 35.6 percent (after fees - very high fees), compared with 17.9 percent for the Standard & Poor's 500 index. For the 11 full years ended December 1999, Medallion's cumulative returns are an eye-popping 2,478.6 percent. Among all offshore funds over that same period, according to the database run by veteran hedge fund observer Antoine Bernheim, the next-best performer was Soros' Quantum Fund, with a 1,710.1 percent return." Some will argue that the average "day trader" does not have the sophistication that the Simons group has with all of their PhDs and etc. This is true. On the other hand, it takes a lot of PhD type knowledge to get a computer to replicate even the most basic human functions. It is quite possible that a lot of what is done at Renaissance is taking successful daytrade approaches, automating them and then applying them over a broad array of markets that no single trader could ever trade manually. Anyway, just like Renaissance does not like to reveal what it is they do exactly, most successful day traders don't either. So if you are worried about what others think (and you shouldn't be - but since you brought it up) - point out that one of the most successful trading firms ever incorporates avid daytrading. And the only way to seperate yourself from the perception that you are no different than some clueless piker who bets on a horse because you "have a good feeling" without revealing the details of your approach is to trade well and to trade well consistently. Over time, the proof will be in the pudding.
Well, most institutions trades are now computerized. I really wonder how a scalper can compete with computers? Like I said, I don't know much about this scalping trading business/career, I have too many questions but no ideas where to get the right answers. I understand most prop traders are not trading by any software program trading. They mostly rely on time&sales and L2 to get the entry point, not charts, if so, how can they compete with HedgeFunds/other institutions' complex program trading? Some ET traders said that they make excellent income, but they seem to be working on their own, rather than working for any prop firm. And they are not "true" scalpers either; they are more flexible with loss target...ect. Unfortunately, scalpers who are working for a prop firm follow a very rigid set of rules.... which, I hardly believe any good/great ET traders can follow & still can be successful.
I always wondered why buffet feels superior to traders and why traders fell superior to day traders. If you do not buy the offering, and you do not buy large enough to sway the board - your buys and sells are no better than anyone elses. Its a secondary market. you are not financing the company - you are betting on the company. Your bet is just one of millions or billions of bets.
You know what that 4:1 leverage means? Enough rope to hang yourself from the ceiling at the end of the day. It disappears when final bells sounds. Come on man would you do that to yourself?
Do not compare yourself with Renaissance's hedge fund. You guys do not even have the capital to do what these institutional traders do, they do not pay retail fees either like you do. Give it up trying to glorify your sleazebag occupation.
But you fail to step out from behind that musty green curtain and remove that dark plate of your sleazebag occupation. Scalpers are like pirhana fish swimming with the whales feeding off morsels grinding nickel and dimes and ultimately losing it all. Why in the hell SEC would be so strict about day trading and scalping types? Why would the government regulate such a profession? I mean puked up hookers on skid row have lot more freedom to hawk their pussies than some of you sleazebag gentleman on this forum !