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

To: Feraldo who wrote (3425)	8/30/1999 10:38:00 AM
From: OZ	Read Replies (1) \| Respond to of 18137

FERALDO, The second you enter into a trade withe the scenario you discussed, the following occurs. Assuming a spread of 1/8 (I am being genorous) and the cost of your round trip of $16.00 for the 300 share example. You are already committed to a $53.50. This is almost 2 1/2% of your total capital BEFORE the stock has even moved against you. This is a very bad money management scenario. The examples that Eric gave are for direct access trading. One can buy on the bid and sell on the ask for small profit. Or one can enter a position trade on the ask and sell into strength on the ask for no slippage. That makes up for the higher execution fees of direct access. Furthermore, your $8.00 trades are for market orders. The limit orders are an additional $5.00. If you are daytrading using market orders, you can consider your first weeks profit a friendly loan from the markets that they will take back with interest. There are very few things that all daytraders agree on, but the woes of exclusive use of market orders comes close. good luck, OZ