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I have a few disagreements with the amount of importance the comments
below have placed on worrying about a tick or two when day-trading the
S&P's....I guess what I have learned to do is lower my anxiety level when
trading(very important for my health and longevity).....I don't worry about
the bid/ask when I'm trading....why????It's just another reason to get my
"blood pressure" to raise up over nothing. NOTHING????? yep...let me explain
why........
If I called my order in two seconds earlier I would have a different
fill....so why get all riled up about something that basically I have done to
myself or if I will only pay a specific price...then I put in a limit
order......Also, on a day like yesterday when we had one beautifull move...why
should I get upset about a tick or two when I have the possibility of scoring
1000 points(how would I have felt had I missed the move cause I was screwing
around for 1 tick???)???????
My trading results got a lot better when I took responsibility for all of my
actions and stopped worrying about the stuff that is beyond my control. Yes,
it's nice to pay low commissions, but ya know what????? Whether I pay
$12.50...$25.00..or even $45.00 a round turn won't make me a better trader....
I could care less if other people are making a living off of me. The object
is to make money, not to see if I can get a great fill or pay low
commissions(great fills and low commissions don't do anything for me when I'm
wrong....and I don't care about em when I'm correct)......Of course, I care
about getting good, fair service....lowering your anxiety level by taking
responsibility for all of your actions will in the end make one a better
trader...........
Tom Stein comfut@xxxxxxx
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From: owner-realtraders@xxxxxxxxxxxxxx on behalf of Advantage Trading Group
Sent: Thursday, July 31, 1997 11:18 AM
To: RealTraders Discussion Group
Subject: Floor Traders-Sloppy Executions
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) <underline>Market Orders:</underline> "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) <underline>Bucket Accounts:</underline> 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) <underline>Speed Kills:</underline> 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.
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