Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Momentum Daytrading - Tricks of the Trade -- Ignore unavailable to you. Want to Upgrade?

To: Eric P who wrote (130)	1/8/1998 9:26:00 PM
From: dpl	Read Replies (1) \| Respond to of 2120

Eric,the problem with all this is you are asuming that trading is just "chance". You are asuming that a trader is making 3/8 when right and 3/8 when wrong.A trader might for instance lose 1/8 when wrong or have a system that has a very high success rate BECAUSE he is ONLY trying for 3/8. For instance my trading is very good at picking ST bottoms and tops for stocks but very bad at telling me when to get out.Therefore taking "small" gains for me is accually defensive.It keeps the loses down. If I were flipping a coin or for that matter something similar that is 70% instead of 50% like a coin then you are right. David

To: Eric P who wrote (130)	1/9/1998 1:31:00 AM
From: Dave O.	Read Replies (1) \| Respond to of 2120

< A skilled trader with a "real" method would need a success rate of 70% just to break even, if he targets a 3/8 point gain or loss per trade. > This is true based on the assumptions you put forth. In my case I trade stocks with just 1/16 spread. Thus that cuts $62.50 off each trade (1000 shares). Further, I use the ISLD and INCA to buy/sell. This essentially allows me to act as a MM since I can buy at the bid and sell at the ask. Taking this into account reduces the required success rate quite a bit. Last, I attempt to trade with the momentum and bail when it stops. Dave