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The New Wall Street Ninja |
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Today's successful DAET trader will not typically make a large profit on any single trade. Rather, the DAET trader will flip in and out of the same security or market-sector security over and over during the same market move. A recent Nasdaq rule change makes clear that traders may reinitiate the same side of the same security at will so long as their current position is flat. |
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For example, it is unlikely that a great trader will buy SUNW at 28 and hold it during a move to 32 (if that move occurred intraday), making a 4-point profit. It is much more likely that the trading would look like this: |
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| BOT.... | 28 | | | SOLD... | 28 3/8..... | +3/8 | | BOT.... | 28 1/2 | | | SOLD... | 28 3/4...... | +1/4 | | BOT.... | 29 | | | SOLD... | 29 1/2..... | +1/2 | | BOT.... | 29 5/8 | | | SOLD... | 30 3/8.... | +3/4 | | BOT.... | 30 3/4 | | | SOLD... | 31 1/2.... | +3/4 | | BOT.... | 31 3/4 | | | SOLD... | 32...... | +1/4 | | BOT.... | 32 | | | SOLD... | 31 3/4...... | -1/4 | | Total profit | | 2 5/8 | | Total tickets | | 14 |
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Although the total profit is lower than the theoretical 4-point gain, this scenario is very real and obtainable, with the trader continuously returning to a neutral position, thereby avoiding significant loss if and when the market finally reverses. The trader remains in control and prepared to change direction on a moment's noticeno home run BUT consistent trading profitability. |
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