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trader is continuously grinding out profits eighth by eighth and quarter by quarter. This technique generates many transactions, and total commission costs are higher than with other techniques; however, in my experience the grinders have had the greatest overall success with the least amount of real exposure. The LTHV trader seldom reads business newspapers such as the Wall Street Journal or Investor's Business Daily or listens to financial news reports. The LTHV trader's sole reason for making a trade is price movement. The trader does not care why a stock is moving, only that it is moving. The trader does not analyze stocks or care about fundamentalsonly short-term price movements. The LTHV trader goes with the flow and maintains no opinions. This may seem easy, but if one possesses the other traits necessary for DAET, it may be very difficult to "have no opinion." Finally, the grinder virtually never takes home an overnight position. |
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These DAET traders "specialize" in a handful of very actively traded stocks and concentrate only on as few as 5 to 10 stocks. The stocks they will trade, such as Microsoft, Apple, CISCO, and Intel, are the most active of the active stocks. Specialists develop a feel for these securities and utilize DAET, SelectNet, and ECNs to enter and exit them freely. Since these securities almost always have significant intraday moves, there is plenty of opportunity to catch swings. In many cases specialists work in teams so they never miss even a small blip. This intense concentration on relatively few stocks gives them confidence that a situation will never get away from them because of an oversight. Specialists make extraordinarily good money by sometimes "pressing" their positions, that is, increasing them to more than one lot (1000) as the trend continues in their favor, within the restrictions of SOES regulations. Risk is minimal for specialists because they have a handle on all their positions at all times. The novice DAET trader is best advised to start as a specialist before venturing into the grinding arena. Those who do not have the headthe |
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