The Strategic Electronic Day Trader

111 Pages·2000·2.909 MB·English

by  Robert Deel

the
WILEY ONLINE TRADING FOR A LIVING
Electronic Day Trading to Win / Bob Baird and Craig McBurney
strategic
The Strategic Electronic Day Trader / Robert Deel
Day Trade Online / Christopher A. Farrell
Trade Options Online / George A. Fontanills
Electronic Day Trading 101 / Sunny J. Harris electronic
How I Trade for a Living / Gary Smith
day
trader
ROBERT DEEL
John Wiley & Sons, bck.
New York • Chichester • Weinheim • Brisbane • Singapore • Toronto
© .repap eerf-dica no detnirp si koob sihT contents
Copyright © 2000 by Robert Deel. All rights reserved.
.cnI ,snoS & yeliW nhoJ yb dehsilbuP
Published simultaneously in Canada.
No part of this publication may be reproduced, stored in a retrieval system or transmit-
-nacs ,gnidrocer ,gniypocotohp ,lacinahcem ,cinortcele ,snaem yna yb ro mrof yna ni det
ning or otherwise, except as permitted under Section 107 or 108 of the 1976 United
ro ,rehsilbuP eht fo noissimrep nettirw roirp eht rehtie tuohtiw ,tcA thgirypoC setatS
authorization through payment of the appropriate per-copy fee to the Copyright Clear-
-057 )879( xaf ,0048-057 )879( ,32910 AM ,srevnaD ,evirD doowesoR 222 ,retneC ecna
snoissimreP eht ot desserdda eb dluohs noissimrep rof rehsilbuP eht ot stseuqeR .4474
chapter 1
Department, John Wiley & Sons, Inc., 605 Third Avenue, New York, NY 10158-0012, (212)
850-6011, fax [phone], E-Mail: [email protected]. the dream and the reality 1
The Dream 1
drager ni noitamrofni evitatirohtua dna etarucca edivorp ot dengised si noitacilbup sihT
ton si rehsilbup eht taht gnidnatsrednu eht htiw dlos si tI .derevoc rettam tcejbus eht ot The Reality of the Awakening 2
engaged in rendering professional services. If professional advice or other expert assis-
4 maerD eht gniviL
.thguos eb dluohs nosrep lanoisseforp tnetepmoc a fo secivres eht ,deriuqer si ecnat
Which Dream Is Right for You? 8
RealTick™ is a trademark of Townsend Analytics, Ltd. © 1986-1999 Townsend Analytics.
Used with permission. Any unauthorized reproduction, alteration or use of RealTick™
chapter 2
is strictly prohibited. Authorized use of RealTick™ by John Wiley & Sons does not con-
ehT ni deniatnoc noitamrofni eht fo scitylanA dnesnwoT yb tnemesrodne na etutits electronic trading 9
Strategic Electronic Day Trader. Townsend Analytics does not guarantee the accuracy
01 gniviL a rof gnidarT cinortcelE
of or warrant any representations made by The Strategic Electronic Day Trader of the
truth or accuracy of any information written in The Strategic Electronic Day) sTNrCaEd(e rs.krowteN snoitacinummoC cinortcelE 11
Meet the ECNs 12
Library of Congress Cataloging-in-Publication Data:
Deel, Robert. )SEOS( metsyS noitucexE redrO llamS 17
The strategic electronic day trader / Robert Deel.
91 gnituoR qadsaN
p. cm.
.xedni sedulcnI syoB giB eht htiw gnidarT :TOD repuS 20
)repap .kla : htolc( 6-88452-174-0 NBSI
Nasdaq Market Makers 23
1. Day trading (Securities). 2. Electronic trading of securities. 3. Stocks—
Data processing. I. Title. 32 srekaM tekraM lanoitutitsnI
62 sneercS II leveL qadsaN
HG4515.95.D428 2000
72 metsyS gn332.64*028i5—dc2t1 uoR-r99-0e55629 drO
Printed in the United States of America.
10 9 8 7 6 5 4 32
vi contents contents vii
chapter 3 chapter 6
trading strategies 35 electronic trading tactics 137
The Magic Numbers 35 One If by Land, Two If by Sea 138
The Optimum Maximum Numbers 37 931 gnidarT dna noitalerroC elcyC emiT
93 rebmuN laitnetoP mumitpO ehT Intraday Charts and Tactics 141
The Mathematics of Trading and Commissions 40 351 TOD repuS eht gnidarT
Markets and Direction 43 Order-Routing Tactics Using Level II Information 156
64 retliF ytilibatiforP ,ytilibaborP mutnemoM Intraday Trading Tactics 159
75 srotceS eht dna teksaB eht gnidarT
The Most Actives 61 chapter 7
the biomechanical ta 165
26 skcotS elbaulaV tsoM 02 ehT
The Hunter 165
Trading Closed-End Funds 62
gnidarT dna ygoloiB fo ecneicS ehT 168
Twenty-five Old Friends 70
Biological Time and Trading 169
Selecting a Strategy 71
Psychological Factors and Personality 178
chapter 4 Creating the Biomechanical Trader 186
a picture is worth a thousand words 73 491 gninoitidnoC latneM leeD
57 ytilitaloV fo aruA ehT 791 redarT lacinahcemoiB weN ehT
High-Probability, Profitability Intraday Chart Patterns 80
08 snrettaP trahC hsilluB chapter 8
seize the day 199
Bearish Chart Patterns 89
Not Even on a Silver Platter 200
chapter 5 102 mooR gnidarT ruoY
high-probability shorting 95 202 aerA kroW
How Shorting Works 96 tradingschool.com 207
Hedging, Arbitrage, Hedge Funds, and You 98
index 209
301 ygolodohteM gnitrohS ytilibaborP-hgiH
Shorting Overbought Stocks 104
Microanalysis 124
921 snrettaP hsiraeB dnertorciM
231 sdnerT hsiraeB mreT-gnoL gnitrohS
the
strategic
electronic
day
trader
chapter 1
ytilaer eht dna maerd eht
The Dream
Each of us has a dream. For the active student of the market there is
dna tekram eht tsniaga latipac dna ytiliba reh ro sih tip ot :eno ylno
.ti morf gnivil a nrae
tA .maerd sih gnivil dna gnidart fo demaerd dah lliB sraey roF
age 33, he sold his printing business, making a $180,000 after-tax
os ro ,maerd eht gnivil nigeb ot mih elbane dluow latipac sihT .tiforp
-cele lacol a ta edart ot gninnigeb retfa shtnom ruoF .thguoht eh
tronic trading firm, Bill had lost $65,000; 63.89 percent of his trading
capital had disappeared. What had taken him years to earn was
.eramthgin a gnimoceb yldipar saw maerd s'lliB .enog
yad yllaicepse—gnidart mret-trohs taht si ytilaer mirg ehT
fo tnecrep 29 taht dna htlaew ruoy ot suodrazah eb nac—gnidart
8 ylnO .gnidart fo sraey owt tsrif rieht ni yenom esol sredart yad
yad eht fo tnecrep 2 ylno ,tnecrep 8 taht fO .lufsseccus era tnecrep
trading public make money on a consistent basis. Why is it that the
public gravitates toward short-term trading? There are several
answers to this question. For now, let us address a more obvious
the dream and the reality 3
redart yad cinortcele cigetarts eht 2
he prevailed and became successful. With this information as back-
question. Why do 92 percent of day traders fail, and what makes 8 ground, I asked Bill a few questions. Put yourself in Bill's place and
-nocsim dna snoitseuq eht srewsna koob sihT ?lufsseccus tnecrep answer the following questions:
gnidart lufrewop sreviled tI .gnidart mret-trohs tuoba snoitpec
yranoitulover a dna ,scitcat ,serudecorp gnineercs ,ygolodohtem 1. Would you buy a business if you had no idea what the cash
.sucof latnem dna lortnoc lanoitome gnipoleved ot hcaorppa
?eb dluow wolf
2. Would you buy a business if you had little actual experi-
ence or training compared to your competition?
The Reality of the Awakening
llew erew noititepmoc ruoy fi ssenisub a yub uoy dluoW .3
-mih ksa ot nageb dna eramthgin sih morf pu ekow lliB ,yletanutroF
capitalized and you had limited operating capital?
fo eno saw melborp eht taht gnizilaeR .snoitseuq dnuoforp emos fles
nageb lliB .ammelid sih rof ytilibisnopser koot eh ,noitaerc nwo sih ssenisub a yub uoy dluow ,tsael ton ylniatrec tub ,tsaL .4
-dart ot mih del yletamitlu hcihw ,dedeen eh srewsna eht kees ot without a business plan?
ingschool.com. After 1 spoke with him, it became obvious that Bill
had fallen into the "traders trap." The followtahiwn gyl tcisax eth sie t aehsTs .eninagcae s soeufg o",uecrnahc a toN" ,gniyas era uoy fI
dah eh part eht morf epacse ot lliB del nrut ni hcihw ,noitasrevnoc tsum uoY .emit tsrif eht rof gnidart trats uoy nehw gniod era uoy
pu era uoy redart mret-trohs a sa taht ezilaer dna flesruoy eraperp
.flesmih rof detaerc
trats ro ,deyolpme emoceb ,noitacude na niag ,loohcs ot og eW
.dlrow eht ni sredart tseb eht tsniaga
,lufsseccus eb ot wonk ot deen ew tahw nrael eW .ssenisub nwo ruo noitazilaer a dna ,lortnoc lacigolohcysp ,ecneirepxe ,gniniarT
-moc eht sedivorp ecneirepxe krow ro noitacude ruo ni gnihton tub that you are not invincible or smarter than the market will lead to
prehensive knowledge or psychological control necessary for s:guniwcollo-f eht yas ,edart ot nigeb uoy erofeb gninrom hcaE .sseccus
dna ,ssenisub nwo sih denwo eh ,tnegilletni saw lliB .redart a sa ssec "My name is (your name). I can and may lose money today, but if I
he was successful. He had the money he needed to begin his dream trade the plan and follow the rules I will be a winner." I repeat this
-inifed yrev eht saw lliB .tekram kcots eht ni ecneirepxe emos dna -mocca tI .edart ot gninnigeb erofeb gninrom yreve gniyas elttil
ni latipac sih fo tnecrep 98.36 tsol eh dah yhw os ,renniw a fo noit plishes two things. First, it is humbling to acknowledge that the
market is all powerful and can take money from you at any time.
four months?
Unfortunately, it's human nature to assume that if we succeed Nothing will cause you to lose money faster than a big ego or trying
in one area we will automatically succeed in another. The drive and to exact revenge on the market. If you are trying to prove you are
ni eciov elttil eht semocebu deeccus uooy depleh tahyt noitanimre tedera ,esol od uoy nehW .esol ot gniog era uoy ,emit eht lla thgir
-mis mees ti dniheb stpecnoc eht dna gnidarT" ,syas taht daeh ruoy eht ni ssob s'ohw ti gniwohs yb tekram eht htiw neve teg ot gniog
-poleved dna gnitrats sa tluciffid sa eb t'nac sihT .em ot hguone elp next trade? Thirty minutes later you have four consecutive losses
".gnihtyna od nac 1 ,ecneirepxe taht retfA .ssenisub nwo ym gni a tes ot gniyrt si part rehtonA .tekram eht gnimalb llits era uoy dna
Unfortunately, most people who enter theeh tm moarrf knreate owt tintahw utohye ta hidt reaeay roepf ro htnom rep tnuoma rallod
on dna ,ytiroirepus ,ytilibicnivni fo gnileef a evah sredart gnimoceb ot tnaw yam yeht ,elpmaxe rof—egatnecrep a esu emoS .tekram
clue of what they are about to experience. earn a return of 20 percent a month. Most novice traders look at
eht ni ecneirepxe fo sraey dna noitacude egelloc a dah lliB evah yeht wonk yeht dna ,etah yeht boj a morf epacse na sa gnidart
sih htiw nevE .ssenisub nwo sih detrats eh erofeb ssenisub gnitnirp eht deen t'nod uoY .sllib eht yap ot yenom fo tnuoma X ekam ot
tub ,tluciffid neeb dah ti taht em dlot lliB ,ecneirepxe dna noitacude
4 the strategic electronic day trader the dream and the reality 5
added pressure of a monetary figure hanging over your head. This ital. In order to develop the appropriate strategy, you must know
can become a psychological guillotine. If you don't meet your goal, your enemies and how they think.
you will push your trading beyond your skill, and the result will be Short-term trading is divided into three different styles: day
a series of losses. Losing emotional control will result in large, un- trading, microtrend trading, and position trend trading. One reason
controlled losses. If you follow your trading plan, success should be that short-term traders have such a high percentage of losses is that
the result. By focusing on your trading plan, emotion, ego, and mak- they are trained to use a standard one-size-fits-all approach. Usually,
ing money are no longer an issue. If you follow your trading plan, the entire focus of this approach is to follow short-term momentum
you are a winner regardless of the monetary outcome. Knowing and order flow represented by the ticker. This type of trading is
yourself and adopting the right mind-set, trading strategy, and referred to as scalping. There are two fundamental problems with
methodology before you start trading will enable you to avoid the this approach. First, time and sales are usually late, which no one
traders trap and begin living the dream. addresses, and second, individuals are not all the same. Your trad-
ing strategy needs to be tailored to your trading ability. What works
for someone else won't necessarily work for you. Another reason
Living the Dream
for failure is that short-term traders, especially day traders, aren't
Dreaming the dream and living it are two different things. One is usually trained to screen for high-probability, high-profitability
based on fantasy and the other on reality. To live the dream, you trades. I am going to introduce you to seven short-term trading
have come to the realization that short trading is like nothing you strategies that are extremely successful. With seven strategies to
have ever experienced. The reality is that short-term trading is going choose from, it is up to you to select those that fit your needs and
to be one of the hardest things you have ever done, and without the apply them. This leads us back to my first question. What kind of
proper training and psychological preparation, your stress level will predator are you? You have to determine what kind of trader you
most likely be off the scale. Mental training and conditioning will be are. Let's define the three types of short-term traders so that we all
discussed later in Chapter 7. understand specifically what we are talking about.
Living the dream successfully depends to a great extent on
you—and what kind of short-term trader you are. Identifying what 1. Day trader: A day trader by our definition is a trader who enters
kind of short-term trader you are is critical to your entire trading the market at some point during the day and is totally in cash (flat)
plan. I have trained over 4,000 individual traders from all over the by the end of the day. At no time does a day trader carry a position
world. This group includes professional traders, hedge fund man- overnight. Some day traders trade for fractions of a point—usually
agers, mutual fund managers, and the general public. The first two 1/ 16, 1/8. This is called scalping. This type of day trading has a high fail-
questions I ask are as follows: ure rate. One out of a hundred thousand people can consistently
make money by scalping. You always hear about the exceptions,
1. What kind of predator are you? don't you? The small profit per trade, commissions, slippage, and
the possibility of a series of losing trades, make scalping a tech-
2. What is your time frame?
nique that may not be for you. You may be the exception, but don't
These questions have an important interrelationship. What kind of lose all your money trying to prove it. Not all day traders are
predator are you? Knowing what kind of predator you are is very scalpers. For example, intraday trend traders will stay in a trade until
important because the market is a food chain. In this food chain, the trend reverses. This could take a few minutes or several hours.
various predators are waiting to ambush you and devour your cap- Both types of day traders typically buy 500 to a 1,000 shares or
6 the strategic electronic day trader 7 ytilaer eht dna maerd eht
more at a time and must be highly capitalized. Th-neoc emra uiony i,hmtnoum meno ddnoayeyb noitisop a dloh uoy fI .seirav redart
trading capital for an individual trader is usually $50,0-na0m 0dnu f tstomo ,noitinifed siht ot gnidroccA .rotsevni na deredis
$100,000. Day trading requires large amounts of operating capital. agers are position traders. In many cases, institutional position
Most day traders trade several times a day. It's not unusual for a traders will add to their positions if they feel the long-term outlook
scalper to make 30 to 150 trades or morete pkrearm d eahty e,v owmh yilllaeu stuh ser eidnarttr naoditaisyoP .evitisop si kcots eht rof
.yad rep sedart 9 ot 3 ekam lliw sredart dnert because of the collective size of their accumulation (buying) or dis-
.)gnilles( noitubirt
2. Microtrend trader: A microtrend trader by our definition is a
trader who takes a position with the intention of holding it for three
taht suoivbo emoceb dluohs tI ?emarf emit ruoy si tahW
to five days. The microtrend trader is attempting to trade a small
understanding your time frame is critical to everything you do in
noitisop a seirrac reven redart yad A .dnert regral a fo trap
,srotacidni lacinhcet fo noitacilppa ,ygetarts gnidart ruoY .gnidart
overnight, but the microtrend trader does. Usually a stop is strate-
entry and exit, and so on, are determined by your individual time
dnert eht fi tuo redart eht ekat ot yad fo dne eht ta decalp yllacig
eht fo eno ,edart ot slaudividni sniart ohw lanoisseforp a sA .emarf
eht lufsseccus eb ot gnidart dnertorcim roF .sesrever yllacitamard
"?emarf emit ruoy si tahW" ksa I nehw raeh I sgniht gnizama tsom
srucco yllausu sihT .gnorts si dnert eht nehw edam eb tsum yrtne
era uoy redart fo dnik tahw fo noitinifed yrev ehT ".wonk t'nod I" si
mutnemom ehT .ylevisolpxe snigeb ro yaw rednu si dnert eht nehw
is dependent on your concept of time as it relates to trading. Time
redart yad eht ekilnU .syad evif ot eerht rof ecirp eht yrrac dluohs
esac eht sekam gnihton dna ,ymene ruoy ro dneirf ruoy eb nac
who trades for fractions, the microtrend trader typically trades for
clearer than day trading. Each tick in real time, positive or nega-
sih setadiuqil redart dnertorcim eht ,syad evif ot eerht retfA .stniop
tive, amplifies stresses that exist in your mind. Everything is mag-
or her position and looks for another microtrend. The minimum
eb ot evah snoisiceD .tnegru semoceb tnemom hcae dna ,deifin
trading capital for an individual microtrend trader is usually
made on a second-by-second basis, and as each second passes,
$30,000. Most microtrend traders are very well capitalized, with
tA .edam eb tsum dloh ro ,lles ,yub ot noisiced gnizinoga rehtona
trading accounts of $100,000 or more. The psychological stress on
the end of the day, you feel as though you just completed a mara-
the microtrend trader is, in most cases, far less than on a day trader,
thon. Mentally and physically exhausted, you know that tomorrow
.ymene na naht ylla na erom si emit esuaceb
you must run this marathon again. Obviously, not everyone will
3. Position trend trader: A position trader attempts to ride the succeed as a day trader. This is proven by the failure rate of indi-
trend for 10 to 14 days or longer. A position trader usually takes a viduals who attempt to day trade. Many would-be day traders fail
position of size (large number of shares) and homelhdt sse suuacn ytgiollo daohnteomt dhnae yrgetarts gnidart gnorw eht esuaceb
noitisop eht ,tcatni si dnert a fI .gnisimorp erom semoceb noitisop to overtrade. Many day traders are, in fact, gamblers and can't stop
-netni ehT .tuo meht sekat tekram eht litnu spots pu llor lliw redart -ceffe ot nrael uoy nehw emoc lliw gnidart yad ni sseccuS .gnidart
tion is to stay in the positrieowne ffo rg n1i0ka tmo 1y4b d daeyhss,i lbpmuto icfc ath esi t rseihnTd c.eomni-t nwod wols ylevit
tidnuneas , sstheec cpuossi tfioon y ttrialdibera bwoilrl ps traeyh wgiithh at hhet itwre neds oash tl ognngi tacseles dna sedart
possible. In madneyc cuadseosr,t na im eibc rlolitwre nudo ytr a3d reert pcaanh Cbe ncIo m.oeit aar p kossiirt-iootn-drawer evitisop a
trend trader if the three- to five-day holding-period trend explodes, to various trading strategies. These strategies put time on your
a rof edart a ni era sredart noitisop esuaceB .rehtruf secirp gniyrrac side making it far less likely that you will become a market statistic.
longer period of time, they must allow for price volatility and intel- ot deen yletulosba uoy ,yenom laer htiw edart ot nigeb uoy erofeB
ligent stop placement. The minimum trading capital for .ae pmosairtifo enmit ruoy enifed
8 the strategic electronic day trader
?uoY rof thgiR sI maerD hcihW
Are you a day trader, a microtrend trader, or a position trader? Ulti-
eb noisiced ruoy tel t'noD .noisiced eht ekam ot evah uoy ,yletam chapter 2
eb dluohs noisiced ruoY .srehto fo tupni eht ro deerg yb decneulfni
based on your individual psychology, knowledge, trading capital,
gniplacs taht dezilaer eh nehw maerd sih gnivil nageb lliB .no os dna
gnidart credart dnertiorcim a sa nlufsseccus yrev si lliB yadooT .mih rof ton saw rtcele
morf gnivil elbatrofmoc yrev a gnikam si dna redart noitisop dna
-secen puekam lacigolohcysp eht evah slaudividni emoS .gnidart
-cus erom eb lliw srehto elihw ,sredart yad sa lufsseccus eb ot yras
eht rebmemeR .sredart dnertorcim ro sredart noitisop sa lufssec
old saying, "If the shoe fits wear it," and be aware that one size does
not fit all.
-erawa wen ot uoy ediug ot gniog ma I ,sretpahc gniwollof eht nI
eht dnif lliw uoy fo ynam ,segap eseht nihtiW .egdelwonk dna ssen
.gnidart mret-trohs ruoy evorpmi ot deen uoy srewsna
,aidem eht yb desuba dna desusim netfo si gnidart enilno mret ehT
em teL .gnidart cinortcele ot refer ot cilbup eht dna ,slanoisseforp
eht revo enilno gnidarT .lla rof dna ecno raelc yltcefrep siht ekam
Internet and sending orders to an online broker do not constitute
electronic trading. The two are as different as night and day. If you
eht ,redro lles ro yub ruoy ni yek nac uoy erofeb ,enilno gnidart era
electronic trader has already made the trade and received confir-
mation. Electronic traders route their buy and sell orders through
Electronic Communications Networks (ECNs). The watchword of
the electronic trader is speed, and speed is something you do not
have online. Online trading is for investors, not for traders, and for
this reason, do not even attempt to day trade online. Online trading
was not designed, nor was it ever intended, for day trading. Day
hguorht uoy klaw em teL .htlaew ruoy ot suodrazah si enilno gnidart
a typical online trading experience.
You opened your new online trading account a week ago and
no nrut uoY .enilno gnidart nigeb lliw uoy yadot taht ediced uoy
your computer, and after the third attempt, you establish a good
Internet connection. As the data fills your screen you feel power,
10 the strategic electronic day trader electronic trading 11
uoy krahs dnal yad-nredom a ekiL .noitapicitna dna ,tnemeticxe market. People pay me to help improve their trading skills. If I am
tops uoy strahc ruoy ta kool uoy sA .ytinutroppo gnidart a rof kool dluoc ti ,eerged llams a yb ytiliba rieht evorpmi dna lufsseccus
a possible trade. With the click of your mouse you bring up your translate into hundreds of thousands of dollars for them. I have
ecnetnarw euoy fserfahsi fod rebm une ehht ,ectirp e htg ni enpyt iuowY .neeorcs rnedrok si gnidart lufsseccus fo trap taht dnuof
.xob eht gnikcehc yb redro timil a sa redro ruoy yfitnedi dna ,yub ot .stluser lanoisseforp rof ecirp eht gniyap dna syot dna sloot neewteb
ecirp eht ees uoy nehw nottub redro eht tih ot tuoba tsuj era uoY Let me explain what I mean with a story.
eht llA ?redro tekram a ot redro timil eht egnahc uoy oD .egnahc I was in my father's garage returning tools I had borrowed. My
while time is ticki,ndge iblpye. rF iIn a.blloyj, yeohut droecfi tdheg tior sneenedb a dliamhi ts loorodte re, hbtu fti em deksa rehtaf
.nottub yuB eht tih dna siht od uoY .ecirp eht egnahc ot evah uoy "Yes, they were." He then asked me, "Did you take care of my tools?"
snaxeT sa ,yrots a eTmhis clulmebte rosotm ed perodceeses tcoookr ypou oevher 1 5,r seecwonsdsn. Nao wd tlhuato thce I erofeB
order has been sent, it will take another 10 seconds for the online often do. He said, "When I was young I worked for a man who had a
broker to receive and act on it. Two minutes later you see your price landscaping company. I had just returned from doing a job and was
trade across the screen. Your confirmations arrive by e-mail or by putting away the tools when he asked me, 'Did you take care of my
retal setunim 02 tuo dnif ot ylno ,tiaw dna tiaw dna tiaw uoY .enohp eseht htiw gnivil ym ekam I" ,dias nam ehT .sey dias daD " '?sloot
-leeF .snoitidnoc tekram tsaf ot eud dellifnu sniamer redro ruoy taht tools. Always remember, if you take care of your tools, your tools
ot wov uoy ,ogha settunrimo 03 nwaht d ereeworpmae ss el ddna ndetaartsu rfr gnei isae od I krow eht ekam yehT .uoy fo erac ekat lliw
ytinutroppo rehtona ,neercs ruoy hctaw uoy sA .yrt rehtona ti evig the price because the best is never cheap. Never buy a toy unless
-ces owT .redro tekram a sa ti dnes uoy emit siht dna ,flesti swohs yenom sloot tseb eht esu sredart lufsseccuS ".yalp ot tnaw tsuj uoy
onds after you hit the Buy button the stock runs up. Online traders can buy because toys will not get professional results. Remember,
htiw ,sdnoces ni sredro rieht lecnac ot ytiliba eht evah ton od your competition does not use toys. They play the serious game of
-nim neetfiF .od sredart cinortcele sa ,noitamrifnoc tnatsni tsomla taking other people's money: It's called trading.
eht thguob uoy taht uoy gnimrofni liam-e na eviecer uoy retal setu eht htiw level a no uoy stup gnidart cinortcele deziretupmoC
dna ,redro eht deretne uoy nehw naht rehgih tniop a fo 8/3 ta kcots na sa tsuj detaert si ti ,deretne si redro ruoy nehW .slanoisseforp
you decide to sell. Youy gqouliocnkhlcye te ndteetra caintsoihtphoesr msihatrk gent iosUrde .rm, roifnl ryo tjaom yna morf redro
find out your order was filled X point lower. That afternoon the mail combined with self-discipline, knowledge, experience, and skill, you
arrives with your new account information, and the front of the fo traP .liaf srehto ynam erehw deeccus ot ytinutroppo na evah
envelope says it all: "Welcome to Online Trading." -ges suoirav eht fo gnidnatsrednu na morf emoc lliw sseccus ruoy
This example is not an exaggeration. Online trading lack.gnsid artt ehnileno ot euqinu gnidart cinortcele ekam taht stnem
speed and technical sophistication necessary to successfully trade
intraday. It is possible to microtrend trade or invest online—but not
)sNCE( skrowteN snoitacinummoC cinortcelE
-idnah tuohtiw si ti sa hguone tluciffid si gnidart yaD .edart yad ot
capping yourself by trying to trade online. What are Electronic Communications Networks (ECNs)? Electronic
ecnuonna uoy hcihw revo stiudnoc era skrowteN snoitacinummoC
your intentions to buy or sell a stock. Your orders are matched with
Electronic Trading for a Living
ot ytidiuqil dda sNCE .flesruoy ekil slaudividni morf sredro rehto
I am a professional trader. By that I mean that I make my living trad- the National Association of Securities Dealers Automated Quota-
eht edart ot slaudividni dna slanoisseforp rehto gniniart dna gni .rekam tekram a fo tnemevlovni eht tuohtiw metsys )qadsaN( snoit