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Strategies & Market Trends : DAYTRADING Fundamentals
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To: Cormac who wrote (8319)5/6/2000 1:50:00 PM
From: TraderAlan  Read Replies (1) of 18137
 
Cormac,

We went from a world where transaction cost (commission, slippage and spread) was the huge chunk getting taken out by the middleman. Then discounters and the Nasdaq class action suit lead to talk about zero cost markets. Finally the direct-access folk came along, trade frequency went through the roof while holding period dropped through the floor and defeated most of the advantage of the reduced cost environment.

Whether your trading style executes 100 times day or 10 times per day, the percentage bite will be the same. The important factors will be holding period and position size. If you're executing 2K shares all day in less liquid environments, you're going to get slipped a lot more than 300-500 shares. If you hold 2 hours instead of 20 minutes, your average WIN should be higher.

Guess its all a balance. Even someone who flips 500 shares for 10 times per day is giving at least $6,000 per month or $72,000 per year back to the house at a minimum, probably a lot more.

<hope book is going well...>

The McGraw-Hill art department is having a hard time translating the Townsend graphics I'm using into pretty book format. I keep telling them that I have several dozen examples on my bookshelf of it being done right already. Dead tree publishers sure live in a different place than our webcentric universe. I'm still trying to figure out the difference between pixels and picas.

Alan
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