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Ted Stampeen wrote:
>people should not trade, or try anything entrepreneurial period if they
>don't understand the risk, daytrading in my opinion, is more viable , if
one is starting out with less
>than 10k, one may not get rich, but one can make a living,
>TRADE LIQUID MARKETS, by any vendor selling their wares, this should be
the
>first thing in starting out, then one can take it from there, least when
wrong one
>can get the hell out, nothing like being on the wrong side of a lock limit
move for days on end.
I agree totally with what you have said, but let me add a couple of points,
which will show why I have found myself only trading the T-Bonds.
You certainly need a liquidity, first and foremost. You cannot safely dip
in and out of a market all day unless there is excellent liquidity. You
need to enter and exit when the market is telling you that it is
appropriate, so you need to do it immediately and know that, regardless of
the time of day you will get filled more or less at the price you see on
the screen.
But just a dangerous as illiquid markets are those that have high
volatility. Surviving day traders on the S&P are a lot less than one
might imagine. The sometimes frightful slippage and terrifyingly fast
markets can be a real killer. Even on fairly ordinary days, the bid/ask
spread can be a great as a swing trade on bonds - not funny. Sure, you
will hear the stories of the guys who cleaned up, but the unsung dead are a
great deal more. In England, the illiquidity of the Footsie combined with
its volatility and often large slippage, has made many people very glad
that DBC can send over the T-Bonds from Chicago at an affordable
price...!!!!!
For me, the T-Bonds has much to be commended. Very, very liquid with
around a half a million contracts a day most days and over a million on big
report days. It moves, as I have described it, "with a measured tread" at
the times that you should be trading it and the bid/ask spread is rarely
more than a single tick. Most times, you get the price you want with a
limit order.
For a day trader there is no worry of what the market is doing overnight
and you are not going to get a margin call, if you have the right capital
to trade an average range of less than a thousand dollars a day per
contract. Within reason, you can put on as many contracts as you like and
the market will not even make a blip.
Once you get a feel for this market, you will be surprised at how readable
it is. Now that does not mean that you can make money easily, but, given
a decent approach to money management, you can start to put the odds in
your favour and that is what day trading is all about. Conserving capital
is the name of the game, if you want to trade for a living and it is
absolutely essential that you have a very liquid market to do that.
Without a satellite dish and the T-Bonds from Chicago, with a time
difference wonderfully in our favour, no wonder some of us here in England
are rather more pro our special relationship with the USA, than Europe and
its down the tubes Euro!
The above average sized Inside Day trade today has not done much of a
favour to the North, but if the wedge can form, rather than a fluttering
pennant, we could get a break to the South yet.
Happy day trading...
Bill Eykyn
www.t-bondtrader.com
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