How has the transition into the Hybird market change your short term trading strat?

John, thats impressive, 49 yrs old and able to trade that actively. My hat is off to you. But like you said you do it b/c of you supreme hate for risk. I, myself, dont love risk and I certainly try to lower risk as much as I can while choosing entries. But the bottom line is, risk is part of the game and its unavoidable once you get outside the super scalping mode. I've accepted this and this has made it easier to handle. Its like once you know that certain things are out of your control and there is absolutely nothing you can do about it, it takes the pressure off. All you can do is decide when to stay or when to go (from a trade).

I'm not shooting for enormous intraday moves rather shooting for 2:1 r/r, sometimes 1.5/1, but prefer 2:1 if I can (or greater). This style is still very new to me. I have been "programmed" to trade a certain way for so long and now I am re-wiring myself for a different approach. I am trading small right now but my trades are showing me very good r/r and my success rate is somewhere btw 60-70%. Over time, size will increase. I have the utmost confidence that I am making the right decision altering my approach. Only time will tell of course but I am very persistent :)


Quote from john12:

so steve how has holding gone compared to scalping? are you making the same money or less? you asked would you still be trading 300 plus times a day in 5 years.i'm 49 and i've been averaging at least 1000 trades a day for 13 years. no question its mentally tough but it allows me to trade with the least risk possible and i hate risk. sure i'd have done much better holding long since july but i don't have a crystal ball. some day i'll rev it way back.
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Quote from Steve Tvardek:

Its all about r/r. If you are scalping and you are risking 3 cents to make at least 6, you have a nice 2:1. Same thing applies to longer intraday frames. I may risk, .15/.20 but am looking to make .30-.40 (stock dependent of course). The key is you have to know what you are doing when you take a position w/ more inherent risk. You have to have good reasons and have things thought out in advance before the trade is even placed. I'm only looking to place 2-5 trades daily, but each one I do is for a very solid reason (based on my methods)
When I was scalping doing 100K+ shares a day, sometimes I would just jump in on instict. Now I have more well planned reasons, I know where I am getting out if I'm wrong and knowing about where I should take some profits, all profits etc. The exit is by far the hardest part I feel (at least for me). I am good at sniffing low risk entries, exiting is more a challenge.

I'm not suggesting you cant still scalp NYSE, I'm sure there are new methods and techniques to take advantage of the hybrid, I am just using this opportunity to trade longer time frames. Thinking 5 years from now, would I really want to still be banging in and out 300+ trades a day? Probably not :)
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If you're looking to make 2-5 trades during the day, how many shares are you placing each time you trade and do you scale in/out? Do you place physical stops or just mental stops?
 
steve you are making the right move. it's much more relaxing being able to trade much less its just i've not been able to make the switch not to mention much less commissions.how many shares a day do you now average?
 
Short term opportunities are still there... when the market went to decimals, everyone thought it was the end of the world... that the money to be made daytrading was all gone... those who could only scalp tech stocks for eights and quarters on the long side inevitably washed out, but the rest of the daytraders adapted... with Hybrid it's the same thing. There are still plenty of short term scalping opportunities. On some stocks, you can have a swipe against you and the market go into an LRP... but even before the hybrid the specialist could still spread the market up or down and give you a fuck print.

Yesterday I had an easy 19 cent trade in HUM... it was trading at 55.07 by 55.08 when a huge bid cross came in at 55.08; I auto-exed for my shares at .08 knowing I had a cushion and faced a possible 0 cent loss. Then more crosses came in, the bids chased each other, and the trade went nice and slowly... at all times I was green, and had a bid 3-5 cents ahead of the biggest offer... when the price reached 55.22 the crosses became less aggressive, the buyers weres still clearly in control, and the price went up linearly... it encountered some resistance at 55.30, so I booked my profit at 55.27. I didn't have to think much, just react, ride a trade that was so clearly going my way, and get out when the conditions changed. Hybrid or not, it's still supply and demand, buyers and sellers... some names are harder to trade, but even on the harder names, you can find a way to make money... maybe you find a name that's moving aggressively and constantly limit a bid 10 cents below the market - when someone swipes the books, you get filled and sell at a profit immediately.

NYSE scalping is far from dead...
 
When things go wrong, you get hit by news, etc, that's the most challenging part of the hybrid. Before, the specialist would recognize the imbalance and allow you to get out of the way, at least most of the time. Now, you have no chance, you are quickly run over by the news, and the losses are both large and fast.

It's not the big that eat the small, it's the fast that devour the slow. Eternal Vigilence is the price of success! Never turn your back on the Hybrid, you must know the news, in fact knowing the news before it's news is even better, finally you must know your companies.

There in lies the key to trading the Hybrid according to Mike!

Trade Well!
 
Quote from PinkBunny:

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I can tell you have not been trading long if you use big bids to lean on. I think that gimmick is like 6 years old and is equivalent to gambling in a competitive almost electronic market like NYSE Hybrid. It has been near useless the last 3 years anyway, at least for those who do not get overrides. There is little correlation between price direction and sizes on the bid/offer.

Listen to Steve T., he is saying exactly what you have to do if you wanna stay intraday in US equities. The last thing you want to do is compete on a short time frame where speed & execution matter the most. The computer will always beat you over time, especially one that is run by a huge IB which has access to a lot of the order flow information.

You can still play sectors, although I felt they got oversaturated. But it's there, every so often some index component will be out of line presenting an Arb opportunity. Or you can just try a directional play since few prop firms will let you trade the actual PHLX index option.
Also, most sectors stay relatively inactive most of the days and then get some action. The arbitrage hedge funds do not adjust in time so you get opportunities. If you are into fundamentals, explore each index option, you never know which one might become hot.
 
what do u believe is the cornerstone right now for price direction.
Bid/size no longer being a foundation for movement, where has the foundation of price movement tansitioned to?
 
that is a good question. the direction is the same as before except with sharp price fluctuations. instead of floating as they did in 06 they (computers) crush multiple levels and I feel as if they have a huge time discrepancy between my orders and theirs. scalping used to be pretty nice back when stocks floated. I knew it would be done with sooner or later. I am sure there is a way to profit off of these price fluctuations however I do not feel as if my platform is fast enough, is cable too slow? I am trying to develop a scaling approach to catch some direction getting hurt using smaller time frames, at least in the past week. caught some nice trades last week but nothing major. trading size seems much more difficult and expensive.watching the machines makes me want one. is this where the industry is headed? I would like to know how many programs will be developed today and tested tommorrow. tricky mktplace be careful. p
 
the problem with scalping is when you market in to get stock, you get filled 5-10 cents away from the price you wanted to hit.

when you try to get out, you get filled 5-10 cents away from the price you wanted to hit.

what used to be a flat trade in gross terms now easily becomes a 10 cent hit.

multiply those 10 cent hits times 30-40 scalp trades a day and it adds up real fast.

im sure the slowness of my platform is partly at fault but the market moves way too fast to get in and out when scalping.

does anyone know if we are supposed to be able to see LRP levels on our level 2?
 
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