|
PureBytes Links
Trading Reference Links
|
Real Traders,
There are several points I think are crucial to trading successfully. These are especially important to day traders, but can help position traders also.
1) Market Orders: "Real Traders" trade at the bid\offer. Standing 4 feet form the phone clerk is an arb clerk signaling the real-time bid offer. If you are a buyer, and the clerk gives you 35 @ 45, you know you can get filled at 45. If at the same exact time you told the clerk to buy at market, you would do no better than 50. Guaranteed, you will lose at least 1 tick each time you "go market". Not smart...
2) Bucket Accounts: Not many people realize that the "major" discount houses "back" their floor traders. I have a couple friends who have accounts that started with $50k that they split 50-50 with their bosses. Now, I am not saying that these guys are stealing, but the adage is "being a floor trader is having a license to steal". The last thing we want to do is give them an account to put it in. Slippage is at an all time high right now.
3) Speed Kills: Including speed dial, it takes less than 18 seconds to execute an order if you are going direct to a good booth. The "handshake" is what you need to tell the clerk in order to get him to flash your order in. Most retail houses want your name, account #, and a password or pin #. Then, they must pull up your account on their screen and make sure you have enough $$$ to place the trade. With the market moving in mutltiple ticks, there in no time for this nonsense. An ideal "handshake" will take 1-2 seconds.
I hope some of this is helpful. If you add up all the lost seconds and ticks, you will see a tremendous difference in your bottom line.
R. A. Spohr
P.S. No one should pay more than $12.50 for Day Trades, and $15 for Position trades.
|