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One other advantage the floor trader has, he knows the book. Where the size is
above and below the markets. Ira
Simon Townshend wrote:
> Hi Brent
>
> You are dead right IMHO.
>
> Trading against the trend relying on support/resistance holding is asking
> for your head to be handed to you. Especially when you consider that when
> these levels break there is a strong tendency for a rapid break out.
>
> I think you will find this is mainly the stuff of textbooks and no more,
> with one exception only. I know I spend ages during my "apprenticeship"
> testing out this stuff but the biggest flaw is the lack of consistency which
> I believe is essential to profitable trading, especially if you are trading
> to earn your income each month.
>
> By the way the one exception: If you are on the floor you can do it. Why?
> Well firstly you have the bid/ask spread on your side and enough floor
> traders live of this alone. Secondly you can see and feel whether or not
> the level that should be resistance is resisting before you take your trade.
> Thirdly floor traders take, and can make good money on, much smaller trades
> than us guys off the floor and that is a key element to counter trend
> trading. Fourthly, they have the opportunity to get out at breakeven before
> it runs rapidly into loss (and on a breakeven trade they do not even have to
> pay any costs unlike you and I). By the time that resistance has broken on
> your screen you have probably had your stop filled with plenty of slippage,
> if you were fast enough to get it placed, if not well you know the
> rest.........
>
> If you want to make decent, consistent money (not become a millionaire this
> week) you must develop a system / methodology that trades with the current
> trend. At least that is what got me out of the 9 to 5 blues!
>
> Regards
>
> Simon
>
> -----Original Message-----
> From: BrentinUtahsDixie <brente@xxxxxxxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Date: 20 November 1998 03:47
> Subject: Gen: Day Trading aspects.
>
> >Hello RT's,
> >
> >I've been reading a chat channel for a few weeks that has a number of day
> >traders on it mostly trading Spoos and Boos. It has been interesting to say
> >the least. It appears to me that most of these traders trade off of Support
> >and Resistance, Fibonacci levels, or pivots within that intra-day data.
> Most
> >of these traders put on both long and short positions within the same day.
> I
> >have read a significant amount of grumbling about their trades and the
> >quality of that day for day trading.
> >
> >What I don't understand is not using the prevailing trend and the
> developing
> >intra-day trend to simply buy/sell pullbacks. For example going into the
> >Spoos today we have a super strong upward move that has lasted more then a
> >month. The fed cut rates. The trade is still within an ascending channel
> >etc., etc. So why were some of these traders shorting today?
> >
> >I tried day trading once some time ago and took a beating but with some
> >research and careful observation I was thinking of trying it again. Am I
> >missing something or is what they are doing an ineffective thing to do?
> >
> >Brent
> >
> >
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