Interested in a day trading method ?

A few things you might want to consider:

The kelly criterion is a good measure of how your system will accumulate weath over time. There are websites that can graph it out for you. What is also is interesting about the kelley is to plug your longest losing streak in and see how quickly you would lose wealth.

I feel like systems should be created by normaliztion of loss. So when entering any trade your max loss is X. So when reporting results one would say that per trade I make X or 2X or .5X.

Also you have to consider the longest losing streak of days or trades or whatever time frame you want. I usally assume that longest losing streak can be triple of what I have seen so far. What kind of damage would that do?

Removal of the positive outliers and keeping the negative outliers and then seeing your system results is also a good test of its durabilty.

Finally, in regards to slippage, it is one of the biggest unknown variables in a daytrading system. Some people use a hard dollar number, some people use a combo of price and avg vol per stock. But nothing beats good ole real time forward testing. If slippage turns your results negative, then you never had a good system to begin with.


RW
 
dante,

How much margin does IB offer?

I am getting 4 to 1 margin now with Scottrade.


TIA.

RML

p.s. I have heard a rumor that just because you are saving a buck or 2 on a trade does not mean you got the best fill on the order. If I was to switch to your broker you named, I would try simultaneous orders and see what kind of pricing I got from them on my orders. On 1000 shares, even a penny difference in the price I get is $10.
 
Quote from traderich:



p.s. I have heard a rumor that just because you are saving a buck or 2 on a trade does not mean you got the best fill on the order. If I was to switch to your broker you named, I would try simultaneous orders and see what kind of pricing I got from them on my orders. On 1000 shares, even a penny difference in the price I get is $10. [/B]
More...

Find out if your broker gets payment for order flow.
 
Quote from traderich:

p.s. I have heard a rumor that just because you are saving a buck or 2 on a trade does not mean you got the best fill on the order. If I was to switch to your broker you named, I would try simultaneous orders and see what kind of pricing I got from them on my orders. On 1000 shares, even a penny difference in the price I get is $10. [/B]
More...

there's a big difference between your Scottrade broker and direct-access firms like IB, or MB trading.
 
between my Scottrade account and your broker(s).

I will switch in a second if there order execution is fair and they give 4 to 1 margin or more for me. The 25k min. for Day trading is fine, I far exceed that limit.

I like the streaming quotes that Scottrade offers as well. Most orders are filled within a few seconds with Scottrade. Scottrade is very reputable as well. I am a bit concerned sending my money abroad to IB to trade.

But, I am very much open to hear the big differences you mention between Scottrade and IB et al.


I guess my blog on here has fizzled out to nothing now.

I guess my gut feeling that the good traders who may or may not visit this website have no reason to compare notes and the ones who do reply are the ones who have little or no money to invest or very naive and have not traded much to discuss anything. That is evident from the guy who wrote in that he didnt understand how a profitable trading strategy would work with 1000 shares and not 100.

well, anyways. I guess I will just sift through the threads on here and see if anything is worth reading about.


cheers.

p.s. I still own DRL, GM, IMH, FBR, FNM, and FBC.

love the dividends on all of these while I wait for better times.
 
Quote from traderich:

between my Scottrade account and your broker(s).

I will switch in a second if there order execution is fair and they give 4 to 1 margin or more for me. The 25k min. for Day trading is fine, I far exceed that limit.

I like the streaming quotes that Scottrade offers as well. Most orders are filled within a few seconds with Scottrade. Scottrade is very reputable as well. I am a bit concerned sending my money abroad to IB to trade.

But, I am very much open to hear the big differences you mention between Scottrade and IB et al.
More...


this article explains is pretty good....

----
(...)
Direct-access trading differs from mainstream trading in how orders get executed. Direct-access software automatically searches the entire market for the best price when you send your order, or lets you choose how your orders get executed. Or, you can "preference" a particular market maker or ECN, then buy or sell shares from that source with a single mouse click. (...)

Direct access is a big change from the way orders by mainstream brokers typically get filled. Well-known brokers like Schwab (SCH:NYSE - news), Fidelity and Mydiscountbroker.com routinely route their customers' orders to the market-making firms with whom they've partnered, and get paid for the gesture. Market makers buy shares at the bid and sell them at the higher ask price, profiting from the spread, or the difference, between the two. At least that's what happens when you send out a market order, which is executed at whatever the prevailing price happens to be.

Let's say you send a limit order, and the order's price is inside the prevailing bid-ask spread. When that order gets routed to a market maker, Nasdaq rules require him either to fill the order himself or to route it to an ECN for execution. Routing the order to an ECN can cause a delay, which in a fast market may prevent the order from getting filled.

Direct-access brokers give customers a faster, more reliable way to receive fills that are inside the spread. If the order happens to be at the best price at that moment, which would be the case if it fell inside the spread, it instantly appears on the quote displays of everyone watching that particular stock. Direct access gives you a far better way to advertise the price you're willing to accept.
(...)
---
so, to sum it up...which direct-access I can buy at the bid...with your broker you have to pay the ask price, at least 80% of the time.
plus...it's lightning fast :)
and yes, they offer 4 to 1 margin as well
 
No!

I tried Wizetrade for a week to see if it was for real and found out real fast what a scam it was.

They uncross lines and the indicators are worthless trading tools.

and, they gave me a hard time when I tried to return the software.

Like I said, I have nothing to hide, just hoping to find some people on this site at about the same level as me as far as experience, and with some solid math background to help optomize a plan I have that is showing some promise. Looks like I may be on my own. Not a big deal though.
 
Ah, was wondering since your profile says you are a Wisetrade user.

Sounds like you are doing pretty good to go from Wisetrade to profitable system in less than a year. Those are two worlds far apart.

Good luck.
 
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