|
|
|
|
|
|
|
soon as he finds that his purchase or sale is in danger of turning into a loss. Thus, a scalper will institute and liquidate a small position many times during one day. Scalpers seldom leave the pit during trading. As a general rule, most scalpers keep only a very small, if any, open position overnight. |
|
|
|
|
|
|
|
|
Scalpers are predominantly on-the-floor, member participants, since it is very difficult and far too costly for an off-the-floor participant to conduct this type of market trading. That is why it is difficult to day-trade off the floor paying retail commission. |
|
|
|
|
|
|
|
|
Question 8: In 24-hour trading, what kinds of indicators do people use? |
|
|
|
|
|
|
|
|
Neal: Time-based indicators are useless. Basing trading on high, low, and close does not make sense. I think point and figure charts and market profiles are of greater use to the 24-hour computer trader. |
|
|
|
|
|
|
|
|
Question 9: What do you think of hedge funds? |
|
|
|
|
|
|
|
|
Neal: Well, the first hedge fund was started by Edward Thorp. He introduced the public to counting cards in blackjack. His 1962 book, Beat the Dealer, is still a classic. He said unless you have an advantage you can exploit in trading, a hedge fund is merely a gamble. In short, you must focus on the model and know how it will behave when the market blows up. The problem with most hedge funds is that they are not hedged. |
|
|
|
|
|
|
|
|
Question 10: Is there any one Web site that you think traders should have in their arsenal that is commonly overlooked? |
|
|
|
|
|
|
|
|
Neal: Information is an essential for any fundamental trader. The Economeister Web site, located at www.economeister.com is a good source for market information. |
|
|
|
|
|