At 12:02 PM 2/24/99 -0500, you wrote:
>How about a bet that there will be a stockmarket crash sometime between
9/9/99 and January, 2000 ?
>>>> Tom Lehman <uswa12 at lorainccc.edu> 02/24/99 11:47AM >>>
>Your talking about some big bucks trades when you get into currency
>Your email pal,
>"Henry C.K. Liu" wrote:
>> Doug Henwood wrote:
>> > Regardless of the social/economic effects, people who day trade on the
>> > will be lucky to break even. There's a lot of nonsense in financial
>> > but the near-impossibility of beating the market and the
>> > nature of excessive trading aren't part of the nonsense.
>> This is the conventional wisdom, but so far it has not ben borne out by
>> The odds of beating the market has improved due to the increased
>> markets of immense complexity. Also the markets are now structured so
>> are million, almost endless, of segments that individual specialists can
>> outside of the major trends. Its like catching the bubbles when every
>> and each bursting bubble is worth $1K to someone.
>> Day trading is designed to take advantage of these new market conditions by
>> 1) by providing instant entrance to large numbers of independent traders
>> very specifically focused, both in substance and timing, and
>> 2) these day trades constantly eliminate market inefficiencies or
>> at the same time create new ones.
>> These trades are both the exploiters and creators of conditions that
>> theories that begin to even the traditional inequality between the big
boy and the
>> little guy.
>> One thing about the market, if there is no money in it, it won't happen.
>> growth of day trading is not based on ideology or charity. People have
>> out well in it and it will continue to expand.
>> I personally have made a bit of money trading on the convergence between
>> Japanese yen and the Austrian dollar (shilling), in June 1998, which
>> trading model I would not have known a relationship existed between the two
>> currencies. The opportunity window lasted only 6 weeks, but the profit
>> trades could carry my operation for the next 6 months without further
>> The upside return is 60% and the down side loss is 15% and the
>> winning if one can find the trades is 80%. It represented very good
odds. A 60%
>> return on investment over a period of 6 weeks is unbeatable.
>> Traders move from bonds, to currencies, to interest rates as the markets
>> The big institutional closed out the proprietary trading units after the
>> So right now there are thousands of laid off traders making very good
>> their severance pay as trading capital.
>> For example, one day trading strategy on the high volatility British
>> with March 1995 price data, yielding a high percentage success rate and
>> profits of $253 per trade of $1000. Active, speculative trading on
coffee in June
>> 1995 yielded before cost profits of more than $6,000 from $10,000
>> And an even more sedate trading style on coffee trading produced a $378
>> trade of
>> $1000. These outstanding results are replicated and documented across
>> commodities, including a variety of currencies, grains, meats, metals,
>> indices, foods, fibers, energies and interest rate contracts. Most of
>> carry a 20% loss cut off.
>> These trade are relatively risk free over time, but they do require
focus and time
>> and disciplined effort to locate trading opportunities. The big houses
>> afford to do them because their high overhead will cause them to lose
>> period of dry opportunities when the strategy finds no or too few tradable
>> opportunities. So the big houses either has to stretch the model beyond
>> paradigm validity to assume higher risks just to keep trading.
>> trade generally have low fixed overhead. Many looking to net less the
>> so they can generally afford to wait or shift into other sectors. The
>> is that when more traders focus on a particular sector, the degree of
>> decreases and trading opportunity dries up. so the market is constantly
>> As inefficiency is reduced in one sector, it produces inefficiencies in
>> sectors, and it the the job of day traders to find hem and reduce them
>> Of course, leverage increases one risk. But individual traders are
>> protected by heir inability to borrow excessively, a blessing in disguise.
>> The NASD chief has repeatedly raised concern over day trading.
>> The head of Wall Street's so-called self policing group has added his
voice to a
>> rising chorus of concern about the growing popularity of risky day
>> ordinary investors.
>> But the conflict of interest is very obvious: don't risk your money
>> us risk your money for a fee.
>> The big attraction of day trading is that one person, sitting and
watching a screen
>> day and trading for his own account has the potential to make large sums
>> on upswings in the stock and other markets. While some of these upswings
>> from daily price movements, others are tiny and are called "teenies".
>> equals 1/16 or 6.3 cents on 1,000 shares of anything- but one can make
>> thirty-seconds and even sixty-fourths of a point per share with this
>> method of daytrading.
>> (New rules mean these tiny fractions must appear on trading screens,
>> remaining invisible to the public so the exchange marketmaker can lock
in all the
>> profit on the increased spread.)
>> It is not important to know even what the stock symbol stands for, much
>> the company does or it's long range prospects. The only important thing
>> you can lock in a couple of teenies by seeing the numbers hit the screen
>> executing quickly as the tide moves in the right direction. At some
>> trades a
>> day is the average and long term is 30 minutes. Bottom line: if you make
>> and lock in 10 "teenies" a day over 25 working days, you're taking in
>> month. And unless, you are hooked to a life style, you can always walk
>> you have enough.
>> Market reforms inspired by exposees of excessive spreads in Over the
>> markets triggered the new day trading dynamics with its far reaching
>> thing, the reduction in tradings spreads is saving investors $20 billion
>> software has leveled the playing field. And there are 25 year olds
making over a
>> million bucks a year on tiny price fluctuations.
>> Although the trend started as a kind of male mentality, video game kind
of thing it
>> has since spread to everyone wanting to work from home, savor
>> take a risk. Women definitely are included in this hot new trend. Some
>> money and one will trade for all of them from home with some recent
>> grads have grossed as much as a hundred thousand in 6 months time.
>> A sample strategy - Gap & Snap:
>> Often, when a stock gaps up at the opening of trading, it can be an
>> indication that the stock is very strong and will continue to rise.
>> gapping stocks might also be met with strong resistance, only briefly
>> trading up from their open and then falling to trade at lower levels for
>> remainder of the day. As a day trader, you will want to identify and trade
>> those gapping stocks that are more likely to continue to trade strongly
>> while ignoring those that are weak after opening strong.
>> Our Gap & Snap strategy identifies the best gapping stocks, and traders use
>> models to assist their execution of the strategy.
>> This strategy works by identifying stocks that gap up by at least 5/8 at
>> opening of trading. We then let those stocks trade for a full 30 minutes
>> mark the high that each of them reaches during that period. The stocks are
>> bought that day only after they trade above their 30-minute high. When
>> have purchased a stock, they should determine their stop based on the
>> of risk they are willing to take. However, their stop should be no lower
>> 1/16 below the low reached during the first 30 minutes of trading.
>> Finally, if a stock trades below its first 30-minute low before it
>> 30-minute high, the strategy is invalid.
>> This strategy has had a high degree of reliability to give gains of 1/2
>> All the above are for information only. It is not a recommendation to
>> trading or to follow the strategies. Like everything else, a certain
>> research and learning is necessary to be successful. But certainly
there are worse
>> jobs around.
>> As I said, I think this is a progressive trend. It is about time for
>> person with a certain level of skill and basic intelligent to be able to
>> fair share in the control of capital by risking their vacation money.
>> of advanced in communication technology, the freedom permitted by this
line of work
>> is unprecedented, not tie to locations, no bosses supervising over you,