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

To: Leland Charon who wrote (8075)	4/28/2000 10:20:00 PM
From: OZ	Read Replies (5) \| Respond to of 18137

Leland, Sounds like you visited one of the Protrader offices. What you describe is exactly correct from the bigger traders that I know. The method that I see used every day is basically as follows. They buy almost every intraday high on any and all decent daytrading stock as they occur. The group of stocks is usually the same 500 or so and some get added as certain sectors come into favor (like the Bio's in January). We basically run a Hi/lo ticker on a group of stocks and trade from it. The big boys run the ticker against the whole market (Nas/Listed) and I run it against my universe. They all started about like me in that they would study all their technical setups at night and come in with a list and trade from it. On a percentage return basis, this method does yield the superior result. As equity grows, position size increases are made on these 'perfect setup' trades. Eventually the accounts so big that merely adding to position size does not work anymore. It is just to hard (impossible) to get into thousands of shares at a breakout and get out of them at a breakdown. So the only way to get even more total return (and less % return)was to start buying smaller to regular and sometimes large (500 to 2000) lots of any and almost all stocks making highs. These guys do not do ANY preparation at night or after the trading day. They just show up at the last minute and just buy them up. I am audio linked to them and sometimes listen to what they are doing. I am almost always in the stocks they are buying several points before they are due to the fact that I was "stalking" the stock. They chase things all the time. It is amazing that it works but over time in a market that goes up more than it goes down it works. I will say that on the short side, they are MUCH MORE SELECTIVE about what they sell. They not only short the lows but minimize risk by shorting the rallies in stocks that are down for the day or that they think will go down eventually. Needles to say, some of the drawdowns on a market that reverses are awesome. The next day they trade in the EXACT same manner again. If they reduced their trading after every big loss then their winnings on the days they do win would not counter the losers. Needless to say, the winning days are very awesome and due to GOOD RISK MANAGEMENT far outweigh several losing days. RISK MANAGEMENT is the common bond of all good traders regardless of account size. Simply stated, it may be possible to ignore good setups on charts but one will never make it without risk management. I do not and am not recommending this method to anyone. I am merely stating as fact what I am observing from what are undoubtedly some of the best daytraders in the world. Many a newbie have blown out sitting nearby trying to mimmick the style. Hope this helps (and does not hurt), OZ