Yup, you might be right. I thought it might be day traders but they usually just trade common stock.
This what I've been doing wrong.
This puts such traders in stark contrast to traditional investors, who carefully study company documents and look to the market for long-term results.
>>C.B. Arikan is fixed on his computer screen like a teenager playing a video game, one hand on his mouse, the other hand frantically hitting keys. But with real money on the line, this is no game.
Arikan, 32, is a day trader, a guy who comes to work in jeans and a casual shirt and trades thousands of shares of stock each day from a warehouse in North Miami Beach, Fla. To him, if the stock market rises or plunges, there's opportunity, as long as he's betting on the right side of the movement. "This is amazing, it's disgusting," Arikan shouted as he watched nearly $7,000 in profit erode over two hours.
Though Arikan eked out a nice $3,000 profit for the day, he made an unusual move. He decided to hold his shares overnight, a move most day traders avoid.
This breed of trader typically holds a stock for a few minutes, or hours, and aims for that quarter- or eighth- or sixteenth-of-a-point of profit.
This puts such traders in stark contrast to traditional investors, who carefully study company documents and look to the market for long-term results. Arikan's overnight hold paid off. The next day, when stock prices soared, he sold the shares by midday, shouting, "I'm printing money."
Sure, the market is wild. But day trading is still around. It's riskier than ever and no longer attracting hordes of newcomers, but there are a good number of day traders intoxicated by playing the highs and the lows of the stock market.
For day traders, the recent volatility can be beneficial: They can make money when the market moves in either direction, as long as they take their profit at the right time. They study the volatility index, waiting for it to rise as a signal that the market has reached bottom.
Most of the people who dabbled in the profession part time are out. Today, it's a field that consists mostly of young, single men who have never worked in the suit-and-tie world, according to office managers.
At Netgain Trading, where Arikan works and serves as manager, only half the 100 traders from a year ago remain. The window in his office overlooks a roomful of computers in which he monitors 55 traders and forces them to stop trading for the day when their losses hit a threshold. He has worked at Netgain for two years after spending five years in the more traditional offices of Merrill Lynch in Miami.
"We're very careful to monitor risk," said Ronald Davidovic, senior branch manager of Netgain Trading. "We set loss limits, and even profit limits, and control the size and type of positions each individual can trade according to their skill level."
At Generic Trading in Boca Raton, Fla., Ivan Katz monitors his computer screen as stocks rally and dip — mostly dip.
"The mood is more pessimistic than it used to be," said Katz, 33. "You don't see people quitting day jobs anymore to become day traders."
Katz said he tries to keep his losses light. He recently upped his goal to making more than $1,000 a day, but he said he focuses more on having profitable days, not on how much profit he will make.
"No one's making money the way they did two years ago. I'm still positive. I enjoy what I'm doing, but I understand the frustrations," Katz said.
While no one seems to track the number of day traders, the bear market has drastically slowed the growth in online, Internet-based trading, according to the Securities Industry Association.
A few years ago, the securities industry became critical of day trading, saying it created volatility in the market.
John Giesea, president of the Security Traders Association, said he assumes that is no longer an issue as other factors have played a role in decreasing the number of day traders.
seattletimes.nwsource.com |
