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

To: Dave O. who wrote (4160)	9/18/1999 2:50:00 AM
From: Dan Duchardt	Read Replies (2) \| Respond to of 18137

If they were willing to truly "learn" how to trade the success rate could be quite a bit higher than it is. I've followed with considerable interest the comments about the various articles bashing daytrading, and the mostly playful barbs on this thread directed toward the extreme examples of failures used by the journalists. But in fairness to the many out there who have failed, I think probably most of them were willing to learn. The ones who plunked down the cash for formal instruction certainly had an expectation that they were going to be taught how to trade successfully. It's not only the ones who think they know it all, or are driven by greed who fall by the wayside. It's my belief that although they are willing students, the education many of them are getting is flawed. I know there are some among us who are engaged in educating traders, and I don't mean to be critical of them. I wish I had encountered them long before I did. My point is that few of the people who take their shot at daytrading have enough knowledge to seek out qualified instruction, and believe they are getting it where they are. I signed up for such a course with some ideas I had about what to trade and when, thinking that if I had the right tools I could make it work. I left all that behind when I started to learn how I could take little bits out of the market, many times a day, just by letting the market action tell me what to do the next second. I failed. And all the while I had someone telling me it didn't matter that I was losing money. Once I got the hang of it, I would make it back. Nobody forced me to trade more than I wanted to run up my commission costs, but he simple fact is that the style of trading I learned required many trades to make money. I got good enough so that I could sell stock for more than I paid for it, just barely. The house, SEC, SNET, ECNs got every one of the many dimes I parted with for the experience. The industry wide use of phrases like "levels the playing field" and "lets you be the market maker" ARE misleading. The truth is the field is not level, and MMs have resources, information, and execution advantages that set them above the rest of us. The simple fact that ECNs are not SOESable, and not linked, complicates the problem for beginners. The fact that MMs can display quotes that are actually dead the majority of the time, and have the resources and systems to bluff, mislead, fade, trade anonymously etc, gives them a huge advantage over the rest of us. ARCHIP, and other similar automated systems have attempted to simplify the order entry decision process for traders, but do so at the expense of time. Even they must sequentially hunt with trial and error for an execution path until they find one that will work. Unfortunately, the complications surrounding executions and learning to interpret level 2 becomes the focus of a lot of training, and newbies often get lost in the inefficiencies of trading with these "wonderful" platforms, frustrated with technical glitches and breakdowns, and overwhelmed with the fact that "what you see is what the fastest trigger in the west will get, but that's probably not YOU, while losing money trying to outdraw everyone else. I can't tell you how many times I've heard the phrase, "you waited too long", or my favorite, "if you got it, it's because it's reversing so now you don't want it". While I have yet to master the art, I am certain that the path to success is not being the fastest gun around. The game is about knowing which targets to shoot, and which ones to leave alone. The ones worth shooting are the ones that pay even if you don't hit them dead center, or at worst leave you time to get away before they shoot back. My thanks to those of you sharpshooters who are willing to share your knowledge with those of us who still need to learn which targets are the good ones. Dan