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To: steve goldman who wrote (3970)	5/5/1998 11:24:00 AM
From: dpl	Read Replies (1) \| Respond to of 12617

Steve,have to disagree on this.You are generalizing.It depends on what a trader looks for in his dealings.For instance I "never" do well with NYSE stocks and only trade NASD stocks although I will only trade the active ones.Also stock action like KTEL where there are many traders make it more predictable, not less.Did him again today. If there is one thing I have learned over the years it is that there are an infinite number of ways to trade. David

To: steve goldman who wrote (3970)	5/5/1998 3:22:00 PM
From: ExCane	Read Replies (1) \| Respond to of 12617

Steve- Thanks for that post, I think it's probably the most valuable thing I've read here on these markets, and a great description of the nasdaq action, including the MM exodus when you need something done. Especially- "Rather, my suggestion is too look for stocks where intra-day patterns and behavior can be seen, not so voluminous that the action becomes nearly liquid, but enough that there is a high probability of a trading range sufficient to yield intra-day gains. As well, look for stocks based on a sector analysis; buystocks in sectors where the money is flowing for the day, short stocks where capital is fleeing, timing, of course, being critical to both. I suggest looking for stocks where larger players, not the flock of daytrader, but a few capital rich mutual funds or institutions, are beginning to accumulate a position. Look for that particular action that indicates that the stock is under accumulation today and has greater odds of moving higher than lower from your purchase/sale point." -GREAT STUFF! What this thread is about, right? Thanks again! -Alex

To: steve goldman who wrote (3970)	5/5/1998 7:15:00 PM
From: Allen B.	Read Replies (2) \| Respond to of 12617

Steve, I agree with you almost completely. The glory days of SOES trading are almost over. The NASDAQ Market Makers are now armed with increasingly advanced software to ward-off unwelcomed SOES volume. In addition, the proliferation of SOES trading now means being the absolute fastest on the draw is the only way to make money via the old "bandits" method and the executions still aren't there. For me, this means sticking only to very liquid OTC stocks with tight spreads and many MMs or my preference- the NYSE or AMEX. I do find execution quality to be better (usually) and my systems require tight, disciplined stops- that's the real edge. I feel (as do many others) that successful day trading requires a strict discipline. The convenience of placing stop orders to both limit my downside and to trail and lock in profits is huge!! I have to watch my OTC positions much more carefully in order to keep my discipline intact. The continued growth and liquidity of the ECN's is helping the OTC cause and there's still a ton of money to made to those skilled traders who can truly read MM's movements and effectively use INCA, SelectNet and ISLD. I have 2 voodoo dolls on my desk, 1 is a NYSE specialist, and 1 is an OTC Market Maker- they both get the occasional poke but all in all, my P&L lives and dies by the listed exchanges. Great post Steve, keep it up!! Regards, Allen

To: steve goldman who wrote (3970)	5/5/1998 8:15:00 PM
From: Dominick	Read Replies (1) \| Respond to of 12617

Very well said steve. I've only been day-trading 5 months and I've found nasdaq to be exactly as you've said. It really tick's me off when I post an offer on select-net and watch for 3 minutes as offers are printed above mine and the watch the offers decline below mine. I've had this happen numerous times, even when I preference a market maker. They do not have to take your particular order. Have you ever wondered how a stock could have good consistent prints at the ask and then all of sudden, a 100 share order comes in at a stupid low price, then, bam! all the market makers drop their bid in unison for at least 3/16 to a 1/4 point causing a flood of selling. I believe this is done deliberately to pull a stock back. When you trade on nasdaq it's easy to start the day as a Christian and end as an atheist. I have never had this happen with the NYSE. Dominick

To: steve goldman who wrote (3970)	5/5/1998 8:46:00 PM
From: TFF	Read Replies (1) \| Respond to of 12617

Steve: Great Post! The next question being....what groups/sectors/mkt cap/vol on the NYSE offer enough volatility for the day trader? Any answers?

To: steve goldman who wrote (3970)	5/5/1998 9:40:00 PM
From: funk	Read Replies (2) \| Respond to of 12617

My opinion is that many fail to trade the most liquid, most linear, highest quality stocks on the most liquid and fare marketplace, the NYSE, instead focusing on the story, super-active stocks of the day on the Nasdaq, and in doing so miss tremendous opportunities trading profits. I agree completely with that assumption. I traded an amex stock today and it was my second non-NAS trade of 1998. It isn't that I am focusing on stocks that trade like tornadoes, its that I am focusing on the exchange that affords me the greatest degree of control over my little trades. Many are lured by the 'immediate' executions of SOES and the graphic, dynamic Level 2 displays. Extreme volatility, wide trading ranges and swift movement of market makers have a natural appeal to the NASDAQ day trader. "swift movement of market makers"...no I wouldn't say I was attracted to that... also how do you qualify or quantify volatility and extreme volatility ? I'm thinking, that I probably trade what many would agree are volatile stocks... Extreme... I'm not sure.... I think, if i understand you correctly, that I avoid fast market conditions when i can, I usually wait for one of those "extremely volatile" stocks to start to settle and establish a recognizable trend before i make an entry... so, as a "nasdaq trader" i would have to take exception to that generalization... that is.. if i understand your meaning. I would add to the list of NAS "lures" that NAS stocks are easier to sell short. Most of these stocks are being driven by day traders chasing the elusive market maker, hoping for that split second soes execution which usually comes when the stock begins to move against them. hoping ... implies a nasdaq trader is employing hope which ofcourse we all know is about the last thing a trader needs to be doing to meet with success. also "split second soes" HA! What nasdaq are YOU trading on! I use soes maybe for 25% of my executions. SOES is especially less desirable in the fast moving stocks that you are discussing. If one is chasing the stock SOES is just about two notches above useless, and if you are selling into strength or buying on weakness, then you don't need soes then, do you? However it is great aliteration so leave it in for the article. OK now here is the one part that incited me to respond...."most of these stocks are being driven by daytraders" So it was daytraders that opened up ENMD at $84 7/8 Monday Morning? Of course that is a required point of view for a market professional to take, right? Point the finger at us little guys that fix our own brakes, while all the "professionals" that make the market in ENMD gapped it up 75 points and in one fell swoop destroyed the accounts of some poor slobs who put in market buys on their laptops on sunday night ala the e trade commercials... Do they still show those on CNBC? I haven't watched cable since January. Not to mention whomever was short that stock, those guys are either, dead, divorced, or at the very least, deserving of a plaque that sez I survived the ENMD short squeeze. At any rate to blame daytraders for that is simultaneously, lame and popular - two prerequisite characteristics of any magazine article. So basically you mention a handful of stocks that have been trading "insanely" and for that you condemn the whole NAS. Lets face it you are talking about a very small fraction of one percent of the NAS. I remember my very first day of trading last year. Tejon Ranch was on NBR three nights in a row. That's AMEX and it was trading on a bubble. It was ridiculous in its own way. A rank newbie, I would guess, may be attracted to the most volatile issues of any exchange, like a moth to the flame. Too bad, if only you and Alex could figure out how to do to the NYSE what Josh and Peter did for NAS when they outsmarted everyone and created ISLD. I also feel that the SUPERDOT, if used properly, offers as good an execution as any soes without any time or size limitations. When are you going to get yourself together and devise away to enrich yourself and get that system or a knock-off of it where it belongs... on all our computers. Let's go, buddy, times a wasting. The NYSE wouldn't have to keep buying advertising trying to tell everyone how great an exchange it is. Its not my fault those two exchanges are lame, I would love to trade over there more. When do you think a version of superdot will be available for home use? Look you don't like the NAS? Fine me either, now how about getting the NYSE to puke up a system for all us little guys that fix our own brakes, make their own trades, and so on. Steve, if you keep grinding your ax so hard, all you'll have left is the handle. : P funk ps The result is that the trader develops skills in reading the market, gauging action, understanding the relationships of the market participants to the stock action, the relevance of certain prints and market conditions, etc. Such a trader develops skills which compliment the intuitive feel necessary to be a successful trader. Well said Steve. pps. My favorite line.... Many of these stocks trade with such volume and action that it becomes almost too fluid, with no discernible direction, with most market makers probably not knowing what their positions are, or where they want the stock to go hmmmm

To: steve goldman who wrote (3970)	5/6/1998 9:07:00 PM
From: jlonj	Read Replies (2) \| Respond to of 12617

"As well, the greatest advantage of the NYSE is the liquidity, the depth of the bids/offers. For example, if i were to buy a stock at 34 1/4 and did so because of a 40,000 share bid at 34 1/8, I can feel comfortable that in fact 40,000 shares would have to be sold at that bid for me to lose that bid. Clearly, the bidder could step away, but in putting that bid out there, the bidder risks getting hit." How do you know what is in the specialist's book? I thought that was not available. Steve, one of the things I've learned since lurking in one of the trader's chat rooms is that few daytraders seem to have much capital. I'm guessing that most of the chat participants are working from $20,000 at most. Is that sufficient capital for momentum trading? I also am increasingly coming to the same conclusion about concentrating on the NASDAQ and the lure of level 2 action. When you complete your article, could you please post it in a variety of SI threads? Thanks.

To: steve goldman who wrote (3970)	5/17/1998 8:30:00 PM
From: Mike McFarland	Read Replies (1) \| Respond to of 12617

interesting post, thank you Steve, and for those who go back and read it, a response posting, number 3986, is a good one to review. First I'll pay my toll, then I'll ask my question, then back to lurker mode--I very very rarely do a daytrade...but of course making money fast and easy sounds very appealing... Barron's this weekend talks about the cancer biotechs, I thought that if folks search out the companies that are into "Signal Transduction" they might trade ARIA up on Monday, Ariad Pharmaceuticals. I don't own it and I'm not going to trade it (halfway into self imposed trading recess), but I thought I'd post it...also posted it on the VD's biotech thread. Oh maybe I will try to daytrade it...but I am awfully suspicious of this technique. Anyway, my newbie question for all of you is what if the market is trending down, don't all the soes traders simply get killed? It seems to me if this market unwinds, then MM's just can just get things moving upward, and then sell into the daytraders' enthusiasm. But then, on the other hand, if the market in general is doing poorly, maybe that makes the few stocks moving up stand out, and all the daytraders pile on to just those few.