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Strategies & Market Trends : The Final Frontier - Online Remote Trading -- Ignore unavailable to you. Want to Upgrade?

To: TraderAlan who wrote (6318)	1/30/1999 10:33:00 AM
From: Jay Morrison	Read Replies (1) \| Respond to of 12617

<<The failure rate for very short term trading always has been, is and always will be very, very high. Probably over 90%. But profit pool for the other 10% has to come from somewhere.>> According to the survey reported on CNBC, of traders in their first 3 months, 42% were profitable, 58% lost money. For traders in their second three months, it was about 50% for each side. For traders after that, the majority, 60%, were profitable. Clearly there was a learning curve. The unprofitable ones clearly drop out over time. Moral of the story, if you survive for 6 months and are making money, you clearly have what it takes. Also, your comment about needing the 90% losers for the 10% of winners to make their money is inaccurate. In futures and options it is a zero sum game, but stocks have true growth and value creation. We don't need that ratio of losers in order to make money. Jay

To: TraderAlan who wrote (6318)	1/30/1999 11:05:00 AM
From: KM	Read Replies (2) \| Respond to of 12617

<,But profit pool for the other 10% has to come from somewhere.> That's a sad but true comment. The 90% who fail are there for the rest to take their money. Glad you had the guts to say that. The English teacher profiled in that WSJ article really ought not to be doing this. I position traded and traded options for sixteen years before I ever tried daytrading on a regular basis and have been able to live on the proceeds of the daytrading from day one. I think a lot of the newbie types chase the lower priced and internet stocks looking for the big payday. Personally, I've found it easier to make consistent money scalping the "Four Horsemen" as you call them plus a little SUNW/ASND, AOL from time to time and the like. The biggest hits I have taken in the past year were position trades on roach motel stocks and I've given that up for good. FWIW. I like your commentary and your Morning Trader, read it every day.

To: TraderAlan who wrote (6318)	1/30/1999 7:23:00 PM
From: Gary Korn	Read Replies (3) \| Respond to of 12617

Alan, Just wanted to share a few experiences after several days of using Level 2. By way of background, I've been daytrading since August 1. Average daily profit for 1998 (Aug. 1 thru Dec. 31) was $170/day (in 1 hour of trading). That required about 20 round trips per day. I had been using DBC Signal Online without the extra Level 2 feature. Thus, I was focusing heavily on (1) size, (2) time & sales, (3) direction of the NASDQ/DOW. Typical stocks traded are DELL, INTC and AMZN (through a box). Two days ago, I turned on Level 2. I traded only DELL (through a box). I found that it caused me to execute double the number of trades. That is because -- upon seeing the depth of buyers/sellers -- one tends to put less credence in the simple bid/ask volume data. On top of that, the list of buyers/sellers changes rapidly, almost impossibly fast, which caused me to make more executions that I ever would have done before. Hence, the round trips went from 20 to 40. Alas, the profit has been slim. A loss of $110 on day 1, followed by a gain of $166 on day 2 (both during days in which DELL rocketed upwards). As an aside, I've always found that I do much better day trading up-bounces in substantially down markets and that daytrading (for me) is worst in strong up markets, as we have had the past two days. Will I keep L2? The jury is still out on that. I want to see if it helps on other stocks. Perhaps DELL is too actively traded for it to be used effectively. Incidentally, I'd always heard that one should never bet against GSCO (Goldman Sachs or "Goldie"). During the past 2 days on DELL, however, it would have paid to bet against GSCO. That said, I won't ever ignore Goldie and would prefer to have it on my side (along with ISLD and INCA, see below). Instead, I found that the true leader in the price direction of DELL was ISLD (the Island ECN, the ECN for the big Datek daytrading house). When ISLD was heavy on the bid (or ask), watch out. It handily beat GSCO, and often INCA (Instinet, a vehicle used by institutional traders). On the other hand, my favorite MM to bet against has been MLCO (Merrill). I profited almost every time MLCO was the only MM standing against me on the bid or ask. Perhaps it is a coincidence. All in all, L2 certainly is interesting. But only time will tell whether it is worth it. At the moment, I still prefer time & sales data. Best, Gary Korn P.S. I forgot the name of the undernet site for daytrading chat (and the server one needs to sign onto). Could anyone help out with that info. please. Thanks in advance.