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Strategies & Market Trends : DAYTRADING Fundamentals
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To: exdaytrader76 who wrote (17503)9/25/2005 11:29:13 AM
From: werefrog  Read Replies (1) of 18137
 
That traderstatus site obviously is not a gov site, but I don't have a problem with their definition of daytrader.
They include "DayTrader", "Extreme Investor" that's a new one for me, and "SCALPING" in the same paragraph. Obviously anyone making 100's of round trips a day would have to be "SCALPING" to get that many daytrades in a single day. If someone buys in the am & sells in the pm & wants to call it a daytrade, ok by me. The daytrading chatrooms, or the horses mouth if you want to call it that, would call a all day trade a swing trade.
A lot of people think holding a trade more than a few minutes is scalping, but no. Scalping is trading between the ask & bid & is not as profitable since the decimal system replaced the fractional system.
The scalper is sitting at his trading station lurking Level 11 data. One market maker is offering to sell a stock at 16 ask. Another market maker is willing to pay 16 1/16 bid.

Therein lies the profit opportunity, the scalper routes his buy order to the 16 market maker & gets his BUY confirm back in less than 5 seconds. The scalper then routes his sell order to the market maker bidding 16 1/6 & gets his confirm SELL back in less than 5 seconds, making $62.50 on 1k shares.

The risk is the guy bidding 16 1/6 will fill before the scalper's sell confirms.

You must have a trading station platform with Order Routing capabilities to scalp.

traderstatus.com
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