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Strategies & Market Trends : DAYTRADING Fundamentals
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To: Dan Clark who wrote (6689)1/30/2000 8:29:00 AM
From: TraderAlan  Read Replies (1) of 18137
 
Dan,

Clearly the B/Ds have been good soldiers on this and fallen into line behind the NASD. I think they believe it will take some heat off of them. In their minds they don't want the small accounts.

Unfortunately, they haven't done their homework and don't realize that their larger accounts for the the part started as very small ones that worked their way up. By removing these from the equation, their food chain can easily be destroyed as the ability to experiment with limited risk (yes small accounts = limited risk) disappears.

One good thing that will come out of this if it passes will be a resurgence in swing/position trading. Frankly most traders now churning their accounts by day trading will have better results if they moved to 1-3 day holds. In respect to this strategy, the proposal tries to damage liquidity by penalizing you for selling a loser the same day that you bought it (do it too much and it's a "pattern"). I think that invites class action filings against the exchanges if it becomes part of regulation.

If that happens, I promise that guys like me will be publishing new strategies to get around these regulations. This will include starting longer positions right at closing when the odds are in your favor and, depending on the language, buying a proxy for your positions (20,50 shares) near closing and just adding to those that favor your play the next morning.

Finally consider one comforting fact: whenever these dunces try to close an advantage that others are using against them, they unwittingly open up new ones that smart traders can capitalize on for months.

Alan
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