Scalping Teenies

findfreegold · Posted: Mon Sep 26, 2005 2:39 pm Post subject: Scalping Teenies

I am a newbie in day trading. I trade on a small scale. I read a book published in 1999 and am curious if its scalping method still works well. The method described involved looking for a stock with a decent spread between bid and ask, and purchasing 1000 shares 1/16 above the bid and turning around and selling 1/16 below the ask for a quick profit. (Sorry if I got the terms reversed - I'm a rookie). If the method still has merit, I would buy in lots of a few hundred rather than 1000 and aim for a few dollars above my transaction fees. If anyone has tried this, or knows of any pitfalls, or positive feedback, I would welcome your thoughts. If anyone would like to reccomend any day trading methods for a newbie to get his feet wet, feel free to share. (I realize that I need to invest only what I am prepared to lose. If I manage my money well, the market shouldn't cost me any more than the slot machines, and hopefully I'll do better than break even after I learn a little something!)
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findfreegold · Posted: Fri Sep 30, 2005 10:37 pm Post subject:

I found a really good spread today and bought 1000 shares a couple points above the bid and turned around and sold them a few points below the ask and made a quick $167. The disturbing thing is that the price dropped right after hitting my sell limit, and if I had tried for a sell limit even one point higher, I would have lost out on the trade. The system seems to have real merit though, because if you miss out, you can always take a nominal loss by cancelling the order and selling off at market value and wait until another decent spread comes up. I would assume that at the end of the day, the profits would outweigh the losses. One thing I have come to realize though, is that if I were to do any serious day trading with the method, I would first need to figure out a way to execute trades while having a continuous ticker showing on my screen showing real time prices, rather than switching screens back and forth between real time prices and equities order pages.
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I make handsome profits collecting free gold plated scrap and selling it for up to $100 per pound and more. Go to: http://www.findfreegold.bigstep.com

HenryTo · Posted: Thu Sep 29, 2005 8:51 pm Post subject:

findfreegold,

Just remember, foolproof methods tend to work until they don't. Wink

Been there, done that. The trick is to realize when your method stops working, and take money off the table when it does. The market is ever-changing, and so one has to be on his or her toes all the time!

Best of luck to you,

Henry

findfreegold · Posted: Thu Sep 29, 2005 8:27 pm Post subject:

I have been experimenting conservatively, and have found what the books are telling me to be accurate. When using my own intuition to pick winners and sell short based on what I think would have influenced the market, my results have been bearish. However, when following the instructions and locating a stock with a decent spread between bid and ask, I purchased 100 shares a few points above the bid and turned around and sold them at a few points below the ask, and realized a profit. The method seems to be legitimate. However, it takes patience locating stocks with sufficient spread between bid and ask. NASDAQ seems to have wider spreads and greater volitility than NYSE and AMEX. If I can trade conservatively and remember not to try to recoup losses by throwing good money after bad, I hope to minimize losses and have the sense to take my money out and invest in something else if losses begin to mount (which is probably likely at some point unless I get really lucky)
_________________
I make handsome profits collecting free gold plated scrap and selling it for up to $100 per pound and more. Go to: http://www.findfreegold.bigstep.com

collies_99 · Posted: Thu Sep 29, 2005 9:36 am Post subject: There are no silver bullet.

Most new investors learn it the hard way ... that is by losing. Call it an initiation fee and it can run in the tens of thousands of dollars. Even most professional have a hard time beating the major indexes in your typical bull year and everyone is genius in a bull market.

Just remember the odds are against you from the beginning and if you treat the stock market as the biggest casino in the world, your odds will improve by resopecting the market. The market will humble most people, if not immediately, then eventually.

If you can appreciate the more than 10K stocks in North America alone, plus the same amount of mutual funds, the odds of picking a winner consistently is slim. Then add the backdrop of you against your competitors, mom and pop investors, day traders and professionals.

Paretos laws suggest that 10% of the people make money and 90% loose. Of those 10% winners, 3.5% takes 90% of the winnings.

Therefore, you have to be good to be lucky and lucky to be good.

Sorry no answer to your question, but I suggest finding someone who have been trading for some time and become good friends. What you need is experience and that can only come from someone who has done it all before.

Raed lost of books, try out many strategy and pick that "works consintently" for you. Foget the hot tip and lots of DD. Time is what you need and most do not spend enought time ... some like me spend too much time. Such is life.

Cheers and good luck.