Dan Gold, et al.
I've read the posts through #135. I expect that during the time it takes me to write this, some more will appear. Things are warming up around here with all the philosophical issues being raised, even value judgements about the private practitioners of daytrading and their impact on the market that I find interesting. I have some thoughts about those issues, but I'll leave those for another post.
>>>Can you tell us what ATTAIN offers in comparison to Cybertrader?<<<
I have not seen a Cybertrader station, so I cannot really compare it to the ATTAIN system I use. ATTAIN is a system developed by All-Tech Securities, the firm started by Harvey Houtkin of "SOES Bandit" fame (or infamy, depending on your point of view). It incorporates Real Tick III from PCQuote as the information server. You access an order box for BUY or SELL by mouse clicking one of multiple (potentially) level II windows. From this box, you can SOES, execute orders against a preferenced ECN or MM, or place a limit order on Selectnet or any private ECN (INCA, ISLD, etc.) You can use the system to enter orders for listed stocks also. Shorts and covers are identified by the user to comply with the rules. I see that Mr Berber has joined us. I expect he could elaborate on any differences between the systems.
>>>Also, what do you actually look for to identify the entry point and time of your trades?<<<
Keep in mind that I am pretty new at this game. But at least I have been exposed to the thinking of some successful traders, bounced what they have to offer against my own analytical thinking, and had the opportunity to play with a trading system that provides live data and SIMULATES actual execution. (For paper trading, someone captures my orders and decides whether they should be executed depending on how they read the market. It is not perfect, but it seems to be fairly representative of actual executions.)
Different strategies are appropriate to different stocks. I won't try to cover all possibilities in this note. Assume you are looking to "scalp" (I personally hate that word, but that's another issue) fractions of a point per trade. First, you pick a stock that lends itself to such a strategy. To win the game you need (1) liquidity- lots of executions per day (>500K, preferably more), (2) lots of MMs in the game, and (3) a small spread. Numbers 2 and 3 tend to be there for very active stocks, but at times you can have a lot of volume without the others. In picking an entry point, you need to be thinking about your exit. What I want to see on level II is lots of support, i.e., several MMs willing to pay a price very close to my buy price in case things start moving against me. If executions are going off at the offer, and the number of offerers starts to decline, while the bidders hold or increase, chances are pretty good a stock will move up. It's time to buy at the asking price. If a stock really runs, the bids and offers will rise, often in spurts that last less than a minute or two. Typically, the price will go up by 1/4, or less, before things slow down. At this point, most pure momentum traders will take their money off the table and wait for the stock to regroup for another run. It's easy to see how you can do 68 trades a day if this is the way you trade. Some very good traders do well over 100 per day.
>>>Would these industrial-strength tools (real-time, L2, SOES, ECN, and software like Attain or Cybertrader) be equally useful to short-term traders or investors?<<<
They are essential tools for the intra-day trader. Wether you like the way the NASDAQ market works or not, the fact is that even if you are an investor and you want to put your money into a Dell, Cisco, Microsft, Intel, or any of several thousand other companies, this is the environment the industry has created for buying and selling those stocks. I don't care how good the fundamentals are, I still want to buy and sell at the most advantageous price. Given that this game is being played out on every one of these stocks every day, you stand to gain (or lose) as much as 10% on each end (buy and sell) of every NASDAQ stock you ever own. To an investor looking to grow a portfolio maybe 15% to 20% per year picking the right day, and the right time in the day to buy or sell becomes crucial. So I would have to say yes. The tools, or incredibly good luck, are equally useful to the investor and the trader. |
