By "cheap broker" do you mean a futures broker that charges far less on commissions and fees than the average futures broker? Futures brokers for retail traders usually come with a free feed access these days. Or are you just sticking to stocks? If you're starting out small you could consider forex also.
Just my opinion. I wouldn't call it "stealing" as much as most of trading now is computer and electronic trading and there is less retail involved liquidity than before HFT. Like you see those sparsely populated pits on the NYSE. They need us retailers to take the other side of the trade on futures contracts. If anything a small retail trader is trading off the excess of big firms, investment banks, and their funds where they have an overwhelming advantage in unfair use of foreign laws such as London's "hypothecation" and massive HFT pushes in odd hours where the same margin call rules don't apply to them and the CFTC and NFA for the most part pretend not to see severe transgressions, or claim they missed it.
Well, sure for everyone else who doesn't know about retail daytrading it does seem the majority societal view is that we are pariahs and market "robbers" no matter how small retail we are. I've heard news radio talk shows and reports about "retired people" who just daytrade all day and feel they contribute nothing meaningful to society or industry or to the economy.
Last edited by Cloudy; August 12th, 2012 at 07:08 AM.
Platform: NinjaTrader, Bloomberg Professional (at work)
Favorite Futures: EN, NG, TY, Gold
Posts: 2 since Aug 2012
Thanks: 2 given,
Everyone is different and there are certainly successful day traders but I will offer the reasons why I prefer position trading. As an aside I am a professional investor but have day traded in the past. You can read my recent intro post.
I now believe - as Livermore did - and most hedgies do that the big money is in the bigger moves. It was very discouraging for me to lose a position I was bullish on overnight only to see it gap higher on the open.
Riding a position over a multi-day period and trading around it (sometimes going to zero or even the other way temporarily) has proven to be an easier way to approach the market for me rather than having to emotionally get myself psyched up to trade each day.
Going negative (P&L) early in the day happens frequently in day trading and often causes traders to change their approach. I find that I am less affected by a negative day in position trading assuming that I believe that I have sized up the pattern and the move well.
In position trading I occasionally can go days on end without trading very much. That has been the case recently, for example, as my positions have been working and I have made only a few adjustments.
Position trading allows a ton of chart evaluation time since your time frames cross through, by definition, off hours. I like looking at charts and setting targets after market hours and I can do this in a comfortable and relaxed manner.
And now for a negative. The worst thing about position trading in my mind is getting caught off guard by overnight news - either macro or company specific. When this happens I more often than not take positions off but it has offered up the occasional opportunity to add to high conviction positions. This is where money management comes in. If your positions are sized correctly and your bankroll is sufficient then fear is less of a problem. That is what you need to worry most about right now - your bankroll - and it is why you tend to feed scared with overnight positions.
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