Rtharp, thank you again for replying to my last thread. I have a few questions that I would appreciate you answering for me if at all possible. When applying limit orders what is a realalistic setting? what I mean is if the stocks bid/ask prices are 10 x 10 1/4 and I wanted to by this stock, what would a good limit order amount be? one that you think, based on experience, would be filled? 2) What if I already owned this stock, what would a good sell limit price be? The reason I ask these questions is- I read that it is possible to buy a stock at a lower price than the inside ask and sell a stock for more than the inside bid...Is this true???Does this happen on a regular bases or is it a rare occurance? Any input will be appreciated. thanks, john!
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Questions for Rtharp?
- Thread starter john kulbeth
- Start date
On the nyse only use market orders. Limit orders will be filled on the limit, but if you bid 10 1/16, the specialist will just bid above you and you will be filled at 3/16... if you enter market.. you will be filled on the eigth 8 times out of 10 and the rest will be on 3/16 or the quarter. The thing to also remember is that if you are filled on the quarter, then it is going up and the specialist didn't want to fill you. If you are filled on the eigth, he is just scalpin and the stock isn't going to move much that moment.. also try to buy on the dips.. that increases your chances of being filled at 10 flat maybe even... and sell on the rises... As for nasd. Put your order in on island. and hope for the best It is much harder to move size also... so I rarely trade on the nasd except ah.
also. don't think about trying to split teenies. That's why it isn't best to look at stocks that are under 20. It is best, especially for a beginner to look for 1-3 pt moves. In that case your fill doesn't really matter that much. Since you are a newbie, your timing will probably be off anyway, so you will miss the trade by a few teenies anyway even if you enter it right. Thats why it is better to look for the bigger move at first.. that gives you more room for error but still profits
thank you praetorian2 for your information, but I was refering to the NASDAQ.Isnt it true that most day traders trade on this market?
I think a lot do. But I hate the otc. As for the Otc, if you put in a bid, and hold it there long enough, you will probably be hit at 10 1/32 honestly. But if you are a daytrader, you don't want to sit there til noon just to scalp an eigth. You are lookin for the action. And in that case you can bid 3/16, and probably get hit soon. And any nasd stock that is a quarter spread at only 10 is probably too illiquid to trade well anyway.. no offense.
John
P.. answered you question pretty well.
I know traders who trade every market so it doesn't really matter. I know a few traders who scalp 1/16 to 1/8 profit per trade AMEX, NYSE with the specialist on the slow moving sectors, usually stocks with 100,000 volume and high dividends. They wait till the specialist is on both sides of the spread. (sorry if this is getting to advanced as I understand you are new to the game) and will place a limit order on the specialist bid. IF he was on the bid you go first due to the fact he can't frontrun a customer. Wait for a market order and dump it for a profit. Limit your size though or the specialist will realize what you are doing. Don't hit him more than 2-3 times a day or he will quickly come and eat you.
John
Another thing I noticed you doing is trying to swap ideas with another beginner the FINN. That is the wrong idea. You want to find successful traders and swap ideas with them, not someone who still is going to make some mistakes. Finn (no offense is meant by this so please don't feel it is an attack). We all make mistakes, the good traders are the ones who have learned from them. They have been at it awhile.
John the other thing - REPLY to this thread instead of starting a new one.
Robert Tharp
P.. answered you question pretty well.
I know traders who trade every market so it doesn't really matter. I know a few traders who scalp 1/16 to 1/8 profit per trade AMEX, NYSE with the specialist on the slow moving sectors, usually stocks with 100,000 volume and high dividends. They wait till the specialist is on both sides of the spread. (sorry if this is getting to advanced as I understand you are new to the game) and will place a limit order on the specialist bid. IF he was on the bid you go first due to the fact he can't frontrun a customer. Wait for a market order and dump it for a profit. Limit your size though or the specialist will realize what you are doing. Don't hit him more than 2-3 times a day or he will quickly come and eat you.
John
Another thing I noticed you doing is trying to swap ideas with another beginner the FINN. That is the wrong idea. You want to find successful traders and swap ideas with them, not someone who still is going to make some mistakes. Finn (no offense is meant by this so please don't feel it is an attack). We all make mistakes, the good traders are the ones who have learned from them. They have been at it awhile.
John the other thing - REPLY to this thread instead of starting a new one.
Robert Tharp
Mr. rTharp, Thanks again for your response. I value your advice. From what Im finding out both yourself and your father are well respected in the world of trading. So I appreciate you taking the time to answer my questions. What Id like to do is explain to you what it is I hope to achieve from my day-trading and maybe you can tell me where to start, where to trade ect.. Basiclly, in a nut shell, I just want to be able to sit at my computer, reseach a few stocks, study some technical analysis, and know what a stocks gonna due that day! I just want to be able to trade each day, close my positions and hopefully have made some decent money. Is the nasdaq the place I want to be? My beinging capital is about 10, maybe 15 thousand. I know it isnt much but its what I have. As for your advice to swapping ideas w/ another beginer, you are right. I read one of your threads where you said you were a modler. I am too. I just thought that since thefinn was practicing w/ the same simulator as I was and having some of the same problems, maybe we could help each other out. Its kinda of nice to know that there are other guys in the same position as im in, as far as experience is concered. It seems like everyone on this web site is so far advanced. And I will reply on this thread. I wanted to donate a thread to asking you questions because I knew I was going to have alot of them and I wanted you to know where to find them. Besides by reading some of the other threads, I know there are other people out ther who value your advice and will want to ask you questions to. Anyway Mr. Tharp, Thanks Again. I hope it doesnt appear that I trying to take advantage of intrest. Im NOT! Im just a little lost and need some help. One more question- If your scalpin tennies @ a 1000 shares and makin 62.50 each time, and your havin to pay 20 bucks in commissions, your gonna have to scalp 25 of them a day to make a thousand bucks! and thats not counting the one you lose on. Theirs got be abetter method, right?
dont scalp teenies.. that's a way to loose, unless you really know what you're doin.. sometimes I scalp RAD or HM 5-10k at a time for a teenie. But that's cause I can read the specialist. Otherwise, on any otc name, you are gonna get destroyed. If you must scalp something, try and take halves in something volatile.
There are just so many ways to trade.
On scalping I'm not doing much there. I will usually get the bid but see if I can get slightly more than 1/16. I trail a stop. This is best done in the REIT's and energy sectors I've discovered.
The key is to figure out what fits you for your trading. I'll help design a system for you if you are really interested but I need to know some of your goals, interests.
I've traded on the news (fade the public)
I've done a lot with breakouts. This is my speciality, but I had to stop with the bear market as most breakouts failed.
If you are wondering a breakout is when a stock goes sideways for weeks and weeks. It then breaks it's all time high or at least a new high. A key indicator is volume. I'm big on volume. It's an indicator that is seperate from everything else. It shows the footprints of mutual funds the elephants of trading. They control 80% of the volume and are not to be faded. I'll be daytrading breakouts again soon.
If you are wondering I'm stalking EMLX right now. I've made soooo much money on this stock it isn't funny. I still own a lot of it in a retirement account. It just broke it's 52 week high again. That stock has a lot of potential but be CAREFUL it can move down A LOT, so use stops.
That is the key to trading--willing to be wrong.
Not letting a trade get the best of you,move on, find something else that will make you money. It is why trading is 80% psychology. I've spent a lot of money/time working on all of the cr*p in my head from my past. I am now one of the most confident guys you will ever meet due to facing my past head on.
I've found a reliable indicator is climax runs. This is when a stock goes 40%+ up in the timeframe you are looking for. It will retrace about 95% of the time when it does this. It makes for a great short.
Then there is just playing good ol
support and resistance #'s. Stocks go up and they go down. They trend but that's only about 15% of the time. The rest of the time they just bounce around.
What type of return are you shooting for?
What is the worse case drawdown you can tolerate?
If you had this drawdown what would you do?
Are you committed to another job? during trading hours?
On scalping I'm not doing much there. I will usually get the bid but see if I can get slightly more than 1/16. I trail a stop. This is best done in the REIT's and energy sectors I've discovered.
The key is to figure out what fits you for your trading. I'll help design a system for you if you are really interested but I need to know some of your goals, interests.
I've traded on the news (fade the public)
I've done a lot with breakouts. This is my speciality, but I had to stop with the bear market as most breakouts failed.
If you are wondering a breakout is when a stock goes sideways for weeks and weeks. It then breaks it's all time high or at least a new high. A key indicator is volume. I'm big on volume. It's an indicator that is seperate from everything else. It shows the footprints of mutual funds the elephants of trading. They control 80% of the volume and are not to be faded. I'll be daytrading breakouts again soon.
If you are wondering I'm stalking EMLX right now. I've made soooo much money on this stock it isn't funny. I still own a lot of it in a retirement account. It just broke it's 52 week high again. That stock has a lot of potential but be CAREFUL it can move down A LOT, so use stops.
That is the key to trading--willing to be wrong.
Not letting a trade get the best of you,move on, find something else that will make you money. It is why trading is 80% psychology. I've spent a lot of money/time working on all of the cr*p in my head from my past. I am now one of the most confident guys you will ever meet due to facing my past head on.
I've found a reliable indicator is climax runs. This is when a stock goes 40%+ up in the timeframe you are looking for. It will retrace about 95% of the time when it does this. It makes for a great short.
Then there is just playing good ol
support and resistance #'s. Stocks go up and they go down. They trend but that's only about 15% of the time. The rest of the time they just bounce around.
What type of return are you shooting for?
What is the worse case drawdown you can tolerate?
If you had this drawdown what would you do?
Are you committed to another job? during trading hours?