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TJ,
I agree that day trading requires both elements you mentioned and I agree
with everything else you said. I think sometimes volatilty is confused for
fast markets conditions which is responsible for larger than average
slippage. Slippage in the S+P was the same back when it trade 990-1050 as
it was when it approached 1200. Likewise on average slippage didn't change
ALL that much from when S+P was trading in the 400's to the 900's. However,
as markets become more volailte during price mark ups, markets spend more
time moving fast and quick which leads to more times when slippage will be
high. For example I will more often than not get normal slippage selling
into strength no matter what the markets doing or where it is. If I insist
on trading a breakout and selling when everybody wants to then I should
expect on days when the market moves to pay more.
Volatility is the key to succesfull day trading but it doesn't always mean
you pay more to play.
Brian
-----Original Message-----
From: Trade Jack [mailto:trade_jack@xxxxxxxxx]
Sent: Saturday, August 29, 1998 5:31 PM
To: omega-list@xxxxxxxxxx
Subject: RE: Globex S&P and emini
successful day trading requires volatility and liquidity, both which
are found now in s&p's and bonds, and a second tier in crude, yen, and
beans.
day trading OJ (high volatility, low liquidity) is as crazy as day
trading euro$'s (extremely low volatility, very high liquidity). you
gotta strike a balance between the two.
slippage (skid) is a fact of life in many markets. it's a cost of
doing business that must be accepted. unlike commish, it's not
negotiable, except in the sense of choosing whether or not to trade a
high slip market or during fast market days.
TJ
---Brian Massey wrote:
There is paradox here in that day trading demands volatility and
minimal slippage. A distinction needs to be drawn between volatile
days and fast market days. Thursday's S+P action didn't have a lot of
volatility
meaning swings in one direction, then back, but it fell fast and sharp
which meant slippage was HUGE.
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