we hired 3 specialists at our company when they started to get laid off at the nyse. all 3 failed. it's funny how trading gets harder when you don't know the order flow . anyhow...cx...where you trading at? i'm at kershner trading in austin. the type of trading you were referring to was basically the same type of trading we used to do here as our bread and butter. but things change...that is the nature of the market.
I doubt that most individual traders can even afford to lose for a few years. But since the required investment of time and resources is such, this is why we see so few profitable individual traders. The firm that I work at brings in around 50 new traders every 4 months or so. They are evaluated based on profitability and potential. Of the almost 2 years I've been here, less than 10 remain.(not counting the most recent group of 50) Of the 10, 1 of us is a skill based trader.(though not a scalper) From the sounds of it this is what you do as well. It is truly commendable, because trust me(and you know this better than me) it is hard, hard work. This, along with pattern recognition, TA, is the most viable trading method for individuals. Also look in to relative strength: the middle ~80% of stocks trade with the market, so your only edge is in timing the market(difficult and provide little edge). To buy the strongest stocks(top ~10%) when the market is in decline, or short the weakest stocks(bottom ~10%) when the market is rising, gives you an added edge when the market does retrace. This is not the sort of trading I do, so take that with a grain of salt. "Providing liquidity" is a running joke around the office, as when you think about it, as traders, we truly provide nothing for society. The only reason we even have jobs is a by product of a monetary based economy. (Not to get into Zeitgeist, interesting movie by the way) I would argue that the wins are just as important as the losses. As long as the losses are affordable. The reason being, your reward must be proportionate to your risk. If you cannot determine your possible reward, then how can you determine how much to risk? The market gravitates towards orders. So if everyone has their stop loss for XOM at 50, the stock will gravitate towards it and take it out. Now whether that is a market phenomenon, or just specialists trying to f*** you over, who knows. I would bet on the latter though.
I trade in NY at an affiliate of Merrill(BAC). Recently, with the economy, we have also seen a few laid off specialists, brokers, analysts come through. What amazes me is how little about the markets they truly know. A specialist, who apparently was used to putting through big orders at his old job, lost 30k his first day. Needless to say that was also his only day.
What type of trading do you guys do now that the market has changed? Do you run any MOC, OPG or pairs strategies? Those are basically the trinity of what we do. If yes, how has it been treating you lately? I know it has been a pretty crappy 2 months for us. I've heard of Kershner, how is it there? I would love to move to Austin one day, if only to be closer to my favorite sports team. If you don't mind me asking, how are the rates? Profit split? etc.
Ok the tanking of AIG has got to be purely due to short sellers. They've been beaten up so bad that I don't think you can define the reverse-split as a negative indicator.
That sounds more like staying alert and having quick reflexes like a Video Game player to jump in front of the <i>Specialist</i> rather than developing a sufficient knowledge of the Market. The people that I know spend time before the Open and well after the Close researching while the Scalpers that you described had an extremely easy life and probably a short day. It was a <i>Strategy</i> in the sense of taking advantage of an opportunity, but not that sophisticated and has struggled once the nice lag time to step in front of the <i>Specialist</i> disappeared. Yes, <i>Turtles</i> are trend followers. They do well with moves in a sustained direction, but not so well in Choppy - Range Bound markets.
What those scalpers lack now is not reflex, but visibility. The fact that they could see which way the specialist was going well ahead of time was their Edge. Nowadays order flow can be masked. A big buyer or seller can hide. Although what you say is true. I talk to some of the scalpers left over from the pre-hybrid market. They seem to have a very limited knowledge of how the markets truly work, and had to relearn everything once, in essence, the gig was up. Its funny how you describe it as a video game, as that was exactly how scalping was taught to us(post-hybrid). Reflex was paramount, we had hot keys to buy/short, cover, set stops, with a press of a button. Knowledge of the market? Such as why they behave the way they do? Not so much. I really can't blame them though, as the reason why things go up or down really is not important, especially to a day trader. In fact, too much time spent on reasoning may get in the way of action. In trading, I'd say Order Flow is more important than Reason. Problem is, as I previously stated, order flow is hard to spot now. This is why I'm not sure if I should have called their trading a strategy. They definitely had a system, however it was predicated on the market environment. One could argue that investing is a strategy as well(which to me it is not), it works well when the market goes up, but not so well when it goes down. The single most important aspect of any strategy is the Edge that it provides you. Visibility was the edge for those scalpers. A market imbalance, or inefficiency, is the edge I try to seek. Without an edge, you are swimming in a sea of sharks. I am not sure what was the edge for the Turtles. An investor can look to "history", and a Turtle can look to trend. However none of these provide a tangible edge. And I don't think intangibles work in trading quite as they do in basketball.
Sorry can't edit. I started there August of 2007, which means we went hybrid sometime early 2007 or late 2006. I'm not sure. Any of the scalpers I described have since left, or adapted.
Well, being the baller that you are these days, I'm sure you can throw a $20 at a site you've been on over 6 years so you can edit.
1. I would say I am barely grinding along, especially the last 2 months. 2. Funny you say that because I just donated last weekend. I think Clutch is still on vacation though, hopefully he gets my email.
I think the reason it's tanking is that its a worthless company massively indebted to the US government. The only reason that it was worth $1+ is that people feel like a penny stock is less risky on the downside than a $15 stock so they were daytrading it and the like. Now that it's worth $15, it's not as attractive taking a flier on it. My guess is that this thing just keeps dropping. No one is trading it on a valuation basis or anything like that because the company basically has no value. It's like when GM declared bankruptcy and the stock kept trading around $1-$2 despite it having no value.
I agree with this. My question is didn’t the company/government/shareholders see this coming? What was the rational for the reverse split? To attract more long-term investors? To keep it listed? I thought they suspended that rule about dollar stocks being de-listed. I’ve just never heard of a company doing this and it having a positive effect. Quite the opposite, actually. Usually, it’s the kiss of death.
Oh, believe me, I know... I was talking post-bailout. I don't know why the shareholders voted for the RSS. I voted no. I know no one wants to be a dollar stock, but they should have seen this coming. Maybe this has less to do with the RSS and more to do with the European CDO exposure? Oh well, I guess I'll wait a few years and see what happens. That was my plan all along, so I probably shouldn't even be paying attention to the news right now.
Perhaps it was an image thing and not wanting to be associated with Lottery Ticket pricing for their stock.
Alcoa seems to have announced good numbers, but I had more important things to do... like listen to the Trevor Ariza conference. Trading is halted on the stock at the moment.
Is there any significance to the $45 price for Crude? XLE is a more inclusive (<i>Big Tent</i>) Energy Index which catches some coal names like BTU and MEE. Granted, the Large Caps like XOM and CVX still carry huge weighting in XLE. The DJUSEN* is approximately at 400 again and it is an important level going back 6 - 8 months. <hr> * DJUSEN is the Dow Jones US Oil & Gas Index which is the underlying index for DIG & DUG. DJUSEN
