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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: TFF who wrote (2491)	8/7/1999 10:58:00 AM
From: Bilow	Read Replies (3) \| Respond to of 18137

Hi TFF; About that training mentality that tries to train everybody to scalp... I believe that this is the technique that a certain national daytrading firm that recently had a problem in Atlanta uses. I visited their office, and it was a simple matter of comparing commission schedules to get me out of there. They were very much against anything other than scalping, but their commission schedule made learning scalping an unbelievably expensive proposition. (About 3 to 4 times too expensive, ignoring market action.) In retrospect, I might have thrived there. As it turns out, scalping is probably what I do best. Whenever there is news plays in the office, (from CNBC or the squawk box) I am almost invariably the first into the stock, and the first out, though most of the other guys don't do these much anymore... But I have no doubt that the vast majority of learning traders are completely unsuitable as a scalper. No finger speed. In addition, no ability to rapidly integrate incoming information. For instance, remember when shots were fired inside the house of representatives? I was already short while everybody else in the office was still trying to figure out what was going on. For me, it was easy. Does violence in the hallowed halls cause stocks to go up or down? A novice trader needs two kinds of training. The first is in the mechanics of trading. What keys to press. What do all those four letter words mean. (I.e. SLKC.) How to avoid getting fined for illegal behavior (proper shorting, 5-minute rule, margin calculations, etc.) Money management. When does the market get shut down. What the futures mean. Those kinds of things can and probably should, be taught effectively by non-traders. Non-traders can teach during market hours, when traders should be trading. The other half of trader training is in how to develop your own trading style, and that can best be taught by watching successful traders, and perhaps by reading. To get training, you have to find a trader who has been doing it for long enough that he can ignore the distraction of having a loser sitting next to him asking questions at inopportune times. Some traders just aren't capable of carrying on the rudiments of a conversation while trading. It turns out that I can talk and scalp at the same time. I've had to pull people's fingers off my screen while talking with them, because they didn't realize that I just heard something in the futures, and had entered a trade. Other times, they have failed to realize that I have entered and exited a trade... The usual reward to the trading trainer in the above case is either a reduction in commissions by the house, or a payment (effectively by the learner) for the chance to sit next to him. These are very fair ways of spreading the knowledge around. After all, if you want to learn to fly 747s, you can't just go up and sit in the cockpit. In any case anybody trying to learn trading from anyone one, or any company or book, must verify that the person teaching them knows what they are talking about. For the personal trading trainers, this is obtained by looking at the profit and loss statements. If the trader is unwilling to show you his last month's detailed trading history, you might assume that he loses money, and avoid trying to learn from him. -- Carl