Question about the market

Kastro_316 · Apr 10, 2004

Sorry if this has been answered MANY times, but i cant find it using search...

Traders always talk about how good the markets were in 97,98,99 and such, and how they are not like that anymore, and traders don't even come close to making the same profits as of a few years ago...>Why is that? What has changed? Will it even go back to how it use to be?

And in your opinion, will that market get better or worse in the next years for traders?

omcate · Apr 10, 2004

Quote from Kastro_316:

Sorry if this has been answered MANY times, but i cant find it using search...

Traders always talk about how good the markets were in 97,98,99 and such, and how they are not like that anymore, and traders don't even come close to making the same profits as of a few years ago...>Why is that? What has changed? Will it even go back to how it use to be?

And in your opinion, will that market get better or worse in the next years for traders?

http://www.elitetrader.com/vb/showthread.php?postid=190026&highlight=qcom#post190026

silk · Apr 10, 2004

Average order size has dropped to around 500 shares from over 2k shares. Market orders over 5k shares on mid cap stocks (where there is more of an "edge") are non existent. Because of the small order sizes stocks rarely ever over shoot and are arbed to the penny by the market place. Thus no opportunity to get a good price on a trade. And forget about getting into a size position at a "free money" price.

also 10 minute volatility has collapsed 75%. A stock will now be in a 8 cent range for 10 minutes. When it used to have a 32 cent range.

Large open limit orders are no longer entered by institutions. A big game was to pick off large limit orders that were holding up/down a stock went the market moved big. This game no longer exists. All stocks in a sector now move all together. "arbed perfectly to the penny" theme again.

I trade primaraly NYSE. Everything on the nasdaq became arbed to the penny in 2001. NYSE still had great trading in 2002. But by 2003 and even more so this year....NYSE is not completely arbed down to the penny. Perhaps because now ECN's are all over NYSE stocks.

When i started day trading nyse in 2001.... it was typical to pick up 5k shares of a stock and sell it for a 30 cent profit 10 minutes later. This can't be done anymore because of the contraction in the ranges.

If volatility increased 50% it would help i think. But it still won't return to luscious trading of 2002. Because there has been a sea-change in how the institutions are entering their orders.

murray t turtle · Apr 10, 2004

Quote from silk:

Average order size has dropped to around 500 shares from over 2k shares. Market orders over 5k shares on mid cap stocks (where there is more of an "edge") are non existent. Because of the small order sizes stocks rarely ever over shoot and are arbed to the penny by the market place. Thus no opportunity to get a good price on a trade. And forget about getting into a size position at a "free money" price.

also 10 minute volatility has collapsed 75%. A stock will now be in a 8 cent range for 10 minutes. When it used to have a 32 cent range.

Large open limit orders are no longer entered by institutions. A big game was to pick off large limit orders that were holding up/down a stock went the market moved big. This game no longer exists. All stocks in a sector now move all together. "arbed perfectly to the penny" theme again.

I trade primaraly NYSE. Everything on the nasdaq became arbed to the penny in 2001. NYSE still had great trading in 2002. But by 2003 and even more so this year....NYSE is not completely arbed down to the penny. Perhaps because now ECN's are all over NYSE stocks.

When i started day trading nyse in 2001.... it was typical to pick up 5k shares of a stock and sell it for a 30 cent profit 10 minutes later. This can't be done anymore because of the contraction in the ranges.

If volatility increased 50% it would help i think. But it still won't return to luscious trading of 2002. Because there has been a sea-change in how the institutions are entering their orders.

==============================

Kastro3;16

If it takes 2-4 plus years of maket school to profitable trade I was still a junior around 1999-00.

Prefer NYSE & stock indexes & occasional derivative now ;
related mostly to DIA, SPY, QQQ.

Another thing about that time was % gainers in a month; remember cuttin a loss in JNPR about $200.00 price.

Opportunity happens any time;
remember my first trade in 1989, Time Inc merged with Warner Bros
some nicknamed it ''War -time'' at that time.

Dividends still pay & that takes time, a favorite word of Solomon, trader king.

T-REX · Apr 10, 2004

Quote from Kastro_316:

Sorry if this has been answered MANY times, but i cant find it using search...

Traders always talk about how good the markets were in 97,98,99 and such, and how they are not like that anymore, and traders don't even come close to making the same profits as of a few years ago...>Why is that? What has changed? Will it even go back to how it use to be?

And in your opinion, will that market get better or worse in the next years for traders?

Perpetual losers will become even bigger losers and winners will take the whole stash.

The bear mkt will be VERY nasty and this comming trading week will probably be the last up week we see.

Kastro_316 · Apr 10, 2004

Will the market ever recover? Will it get better downt he road? lol pretty impossible question to answer, but do you think the markets are just going down hill from here?

caplan8293 · Apr 10, 2004

I think a lot has to do with the bid / ask spreads. Back in the day, it was easy to buy on the bid and sell on the ask to make an easy spread, but today it is a lot more difficult since many spreads are around a penny or so...

Bluefox · Apr 10, 2004

The thing that I dont understand is that you are telling that the market where easier back then because the spread were larger and that there was more movement right? ..... But was it also more dangerous if u were caught on a losing trade???
5k shares 30 cents against u??

caplan8293 · Apr 10, 2004

Quote from Bluefox:

The thing that I dont understand is that you are telling that the market where easier back then because the spread were larger and that there was more movement right? ..... But was it also more dangerous if u were caught on a losing trade???
5k shares 30 cents against u??

This is true. However, it was a major bull market so the market was going up a majority of the time...

I know people that knew nothing about the markets and were buying and selling for the stupidest reasons and were making decent money because the markets were trending up during that time.