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I don't have any stats, but imo, it's probably far less than 5% of the
people who attempt day-trading that meet with any worthwhile degree of
success. I've been in touch with several traders who have attempted it over
the past few years -- all have quit. One friend who made over $100K his
first year was recently taken to a Gamblers Anonymous meeting by a relative.
He took their addiction test and found he was well over-qualified as an
serious addict.
NASDAQ Level II had some merit prior to rule changes that went into effect
on NASDAQ in early 1997. Since then, it has become less and less useful. I
used it over two years ago and it was evident that Market Makers regularly
mis-represent the size of their positions in an effort to create an illusion
in their favor. I spent several days keeping stats on which way a potential
trade would run-- based on the conventional interpretation of reading a
Level II screen, versus the exact opposite scenario occurring. My informal
observations showed me that it was 50/50 as to whether or not the Market
would follow the conventional interpretation or run off in the opposite
direction.
I recently saw an advertisement for a training seminar on how to
successfully mis-represent your Level II position-- from a Broker offering
Level II trading. Imo, the head-fake scenario was frequently a result of
the Market Makers working together against the sea of little guys to flip a
trade in their favor. The only advantage of having a Level II ECN was the
ability to enter and exit a position with the click of a Mouse, in 1/100th
of a second, from 5000 miles away from the Exchange. Very useful in bailing
from a large position that will cost you a several thousand dollar loss if
allowed to exist for the next 30 seconds.
Draw your own conclusions --
_____________________________________
At 10:27 PM 7/16/99 -0600, you wrote:
>Thanks to all for sharing your insights abount the E-mini NASDAQ 100 index.
A summary of the provided pros and cons is now available.
>
>For a DOC file, click http://www.jurikres.com/down/emini100.doc
>For a PDF file, click http://www.jurikres.com/down/emini100.pdf
>
>=================================
>
>I'd like to ask a few questions about the popularity of day trading. A
compilation of your responses will be published by Investor Skills &
Knowledge Institute (ISKI), and be freely downloadable from my web site.
>
>1. Is the recent surge of interest in day trading due to software, the
roaring bull market, glamorization by the media, greater personal control
over retirement accounts, all or none of the above?
>
>2. Theoretically, how can level 2 SOES information help traders play the
market? In practice, does it realy help?
>
>3. In your opinion, what percentage of day traders routinely outperform
other investment strategies? What percentage blow out their account and suck
their thumbs?
>
>4. Anything you want to get off your chest regarding day trading? Don't
be shy. Let's shake 'em up a bit.
>
>Public post or private email OK.
>
>- Mark Jurik
>
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