Day Trade Online, 2nd Edition

by Christopher A. Farrell (Farrell Asset Management, LLC and Farrell Preferred Stock Arbitrage Fund, LP, New York, New York)

• ISBN13: 9780470475553
• ISBN10: 0470475552
• Format: eBook
• Copyright: 2008-12-01
• Publisher: Wiley

Summary

Day trading can be quite lucrative, but only if you know what you are doing. As Farrell points out: "Trading for a living is hard. Trading for a living over the Internet is even harder. There are many challenges and obstacles that confront you. Venturing into this jungle unprepared is a recipe for disaster." This straightforward guide provides the head start and heads up necessary to thrive as a day trader, covering everything from the dangers and pitfalls of trading online to an in-depth analysis of which trading techniques work and which don't. Day Trade Online, Second Edition presents inside information on the strategies of top trading firms, including the most secretive, misunderstood, and profitable function on Wall Street. Most importantly, you will learn to look at ten different stocks and pinpoint which one to trade, when, at what price, and why. With the right know-how, you will be able to apply this knowledge to every single stock that you screen.

Table of Contents

Preface.Acknowledgments.Introduction.Section I. NSThe World of the Day Trader.Chapter 1. NSExploiting the Excesses of Capitalism.The House Edge.The Bid-Ask Spread.Section II. NSIntroduction to Day Trading.Chapter 2. NSTrading 101: Buying on Bad News and Selling on Good News.The Mind-Set of an Online Day Trader.A Buyer When the Market Needs Buyers.Hit Singles, Not Home Runs.Brokerage Commissions Can Destroy Profits.Buy in on Fear, Sell in on Greed.The Slow Execution.Is the NYSE an Easier Market to Trade?Section III. NSHow to Beat Wall Street at Its Own Game.Chapter 3. NSExploiting Wall Street's Conflict of Interest: Market Orders versus Limit Orders.Understanding Wall Street's Conflict Interest.Price Makers versus Price Takers.The Bargaining Process.The Process of Price Negotiation: Market versus Limit.The Limit Order.Wall Street's Prey.Prelude to the Bid-Ask Spread.Chapter 4. NSThe Day Trader's Crystal Ball: Understanding the Bid-Ask Spread.A Snapshot of a Moving Picture.The Mechanics of Price Movement: Understanding What Makes a Stock Move Higher.Example 1: The Quote-A Snapshot of a Moving Picture.Example 2: The Market Order to Sell-Hitting the Bid.Example 3: The Market Order to Buy-Lifting the Offer.Example 4: The Limit Order to Buy-Bidding for Stock.Day Orders vs Good-Until-Cancelled (GTC) Orders.Example 5: The Limit Order to Sell-Offering Stock.Haggling Over Nickels and Dimes.Example 6: Moving the Stock Higher.Chapter 5. NSThe Role of the Specialist on the New York Stock Exchange.Using the Specialist System to Your Advantage.What If There Was No NYSE Specialist?Buyer of Last Resort.Is the Profit the Specialist Makes Justified?A License to Steal?The Specialist's Limit Order Book.Being on Both Sides of the Market.Narrowing the Bid-Ask Spread.Wide Spreads Protect the Specialist from Volatility.Handling a Large Sell Order.The Real Intentions of the Specialists.Beware When the Specialist Takes the Other Side of Your Trade.The Daytrader as a Shadow Specialist.The NYSE's Fair Order Handling Rules.Never Reveal Your Hand.How Can You Determine Where the Specialist Lurks in the Stock?Jockeying for Position.How Do You Know Where You Stand in Line?When in Doubt, Ask the NYSE FloorTipping the Odds in Your Favor.Beware of the Specialist.Section IV. NSIntroduction to Scalping the NYSE: Taking Food out of the Specialist's Mouth.Chapter 6. NSThe Day Trader's Secret Weapon: Exploiting the Bid-Ask Spread.How Can You Possibly Make any Money Trading Stocks That Don't Move?The Role of the Scalper.Scalper's Keys to Success.Hit Singles, Not Home Runs.Under The Radar.Make Sure the Order is Routed to the NYSE FloorAvoid the Glamour Stocks.Exploiting the Bid-Ask Spread.Finding the Trade's Sweet Spot.Instant Replay.Simplifying a Complex Process.The Other Moving Parts to This Trade.Trading Do's and Don't's.Take a Quick Glance at the Specialist's Order Book.A Bet with the House?Is This Too Much Work for Only $100 In Gross Profits?A Few Words on Risk.Section V. NSTrading The Market's Momentum: How to Profit From Volatility.Chapter 7. NSExploiting Market Volatility and Momentum: Strategies For Trading the NYSE's Most Volatile Stocks.The Specialist and the Upper Hand.Playing the Gap Open: A Strategy for Betting with the House.Buying on Bad News.Betting on the Specialist.Join