As many of you know, I’ve been a satisfied CyberTrader customer for several months.  After the recent clunky migration to Schwab, I’ve been browsing various brokers to see what’s available.  I’ll be keeping some money with Schwab, but I’ll be moving some to a new broker.  It wasn’t until this recent migration that I had even considered splitting up my account between brokers, but I think in many ways it makes sense (in theory better availability of shortable shares, for one).

Since I’ve started looking around at the differences between the various brokers, I’ve noticed a couple things that stick out at me.  Specifically, these two features which I consider to be critical are actually pretty rare among the brokers out there:

1. Server-held orders/alerts – when (not if, remember?) your network connection goes down, will your orders still fire?  With CyberTrader and Schwab the answer is yes.  I know DownTown Trader was concerned about this (and TradeStation’s orders are stored on the PC).
2. Trading API – can you write software to make trades and use software to automatically keep a journal?  You use-ta could (an expression we use in the South) with CyberTrader, but no longer.  This was a major reason many left Cyber before the migration.  I’m going to start developing an ATS soon and this will, of course, be necessary.
3. Ability to see if shares are shortable before attempting to short – I’m amazed that there are SO few brokers that give you this capability.  There are fewer things more frustrating that commiting to a trade, clicking the button to short and getting some cryptic error message that there are no shares to borrow.  Cyber showed you how many shares were available to short, Schwab does not.  That’s a big minus.

There’s only a couple brokers that I know of that offer the above 3 features: MB Trading and Interactive Brokers.  Does anyone know of others?

Incoming search terms:

• schwab trading api
• schwab api
• denise schwab trading
• daytrading with api
• day trading broker APIs
• thinkorswim debit card
• thinkorswim ats
• day trading api
• denise shull thinkorswim
• sdk api day trading

For the next interview in the StockTickr Interview Series (RSS feed), I spoke with Bennett McDowell, a well known trading coach and founder of TradersCoach.com.

Bennett is a frequent speaker at the Traders’ Expos and often participates in their live trading challenges. He’s also written several books with two more coming out in 2008.

Read on for more about Bennett, the worst trade he’s ever taken, and the most common mistakes he sees traders making.

Read the rest of this entry »

Incoming search terms:

• bennett mcdowell
• traderscoach com review
• review art trading software review
• CYCLE TRADE ENTRY
• bennett a mcdowell
• Bennet McDowell
• The ART® of Trading by Bennett McDowell
• traderscoach review
• risk of ruin calculation trading
• Mcdowell Bennett

A while back I wrote about the hidden benefits of day trading.  In one of the responses, Trader Mike said:

You know I agree with this list but I’d also like to see what you think the disadvantages of day trading are as compared to swing trading. The biggest ones in my mind is missing out on gaps in your favor and periods when stocks just drift higher day after day.

It took me a while to think about some disadvantages, but here’s what I’ve come up with:

• Daytrading takes intense focus during market hours
  If you have trouble focusing for lengthy periods of time or have obligations that prevent you from doing so, you’ll likely be frustrated. It’s true that a lot of the day is spent twiddling your thumbs, but with many trading systems it’s hard to tell when good setups might come along so you have to be on your toes for a lot of the trading day.
• You’ll miss out on overnight gaps
  There’s a lot of money in those overnight gaps! Of course, this cuts both ways. As Mike had mentioned before, when you’re swing trading stocks seem to just drift day after day and you’ll miss out on these situations if you’re flat overnight.
• Sometimes the market will move alot, but your trades won’t
  I’m sure this happens with swing trading, too, but it seems to happen more frequently and more noticeably when you’re day trading. How many times has the market made a big move and you ended up breakeven or with a loss. When you run into friends later, it’s almost guaranteed that they’ll say something like: “Did you see the market today? You must have made a killing.” A lot of people just can’t understand that.
• Market hours aren’t convenient for everyone
  Us right coasters don’t think about this too much, but traders in other time zones might find it really inconvenient to trade the U.S. markets. Some really like the time difference, though. For example, pacific coasters seem to have a pretty sweet deal if you’re a morning person with the U.S. markets opening at 6:30AM PST and closing at 1:00PM PST.

  I’m not sure how Eyal does it though – he is in Thailand where the time difference is exactly 12 hours. Wow.

• There are more opportunities to over trade
  Over trading (either trading too big or taking too many opportunities) seems to be much more prevalent for day traders. If you lack self discipline you can always find another trade to make. The extra buying power that comes with daytrading certainly gives you a pretty loose leash. If you have hidden psychological issues, the temptation to overtrade while daytrading could easily lead to your trading demise.
• You’ll spend a lot in commissions and trading costs
  This probably goes without saying, but when you move to a shorter timeframe your commissions will become more of an issue.
• You’ll need to have a plan for the “unexpected”
  Power outages, platform problems, general computer problems, network connectivity – all these problems are magnified when you trade on a shorter timeframe.  It’s critical that you have a plan because it’s not IF they happen, it’s WHEN.
• You’ll need more software
  A good day trading broker, a good scanner, charting software – you’ll spend a lot of time evaluating the variety of choices out there which takes time and money.

I’m sure there are other disadvantages – can you think of others? Perhaps my rose colored glasses are preventing me from coming up with other reasons.

Incoming search terms:

• Disadvantages of Day Trading
• Day trading disadvantages
• disadvantage of day trading
• Richard Koza
• day trading advantages and disadvantages
• pitfalls of day trading
• day trading thailand
• day trading drawbacks
• advantage of day trading
• day trading advantages disadvantages

No trades today (not many candidates for me), but there is a pretty chart of the day award.  The Qs had a nice downtrend all day.  Hopefully you were able to capitalize:

I made three trades today – one worked out pretty well and the others did for a brief period.   I traded ONNN, BIIB, and NBIX.  NBIX was the only one that ultimately worked out.

Also, I was a little surprised to see the overwhelmingly negative reaction to the CyberTrader/Schwab migration post I made.  It’s pretty clear that there are a lot of traders that are upset and heading for the hills.  Even my buddy Jeff (the Stock Bandit), a long time Cyber supporter, is shopping around.  The more trades I make with StreetSmart Pro, the more problems I’m having.  I hesitate to even contact support – I’ve heard the lines are long.  Customer Service is something that I’ve really valued with CyberTrader – if that goes then I’ll have to take a really hard look at my broker.  ;-(

As for the prettiest chart of the day – that award goes to RIGL as Eyal mentioned.  Unfortunately I was looking short and couldn’t justify this trade.  Hopefully someone had the guts to take it today.  Anyone?

One of the reports in StockTickr is a market gap report that shows how your trading system performs by opening market gap.  It allowed me to see in black and white that when the market gaps up big at the open that my system doesn’t have an edge.  It’s really tempting to try to jump on board when the market gaps like it did today, but knowing the information from the market gap report is great because as soon as I see the market gap I become extremely skeptical of any of my normal setups that come along.

The candidates I saw today were sub par anyway, so it was easy to close the trading platform at around 9:40AM ET knowing that it was the right thing to do even if one of the sub optimal setups did work out.

TraderMike turned me on to CyberTrader several months ago and they’ve recently consolidated their platforms and have pushed CyberTrader Pro users to Schwab’s StreetSmart Pro platform.  I’ve only made one trade with the new Street Smart Pro that CyberTrader clients have been migrated to.  I’ll admit it is going to take some getting used to.  There are some features that are just flat out missing (like seeing how many shares are available for shorting or unrestricted pre and post market trading) and others that have changed just enough to be really annoying (account balances only update every 15 minutes).

Rich made a comment on an earlier post about how this migration has been a “disaster” (his words) and I found this thread on EliteTrader that isn’t nearly as kind as Rich. 

Here’s a good summary of the gripes suggestions from AAAintheBeltWay on ET:

1. Ability to short through ECNs. As it is SS Pro is not even a true direct access platform.
2. Access to full pre and post market sessions without restrictions.
3. Ability to set a default hidden order size, ie send an order for 100 shares but display 100 only. To be useable it has to be settable as a default, since you don’t have time in the heat of trading to go through additional boxes.
4. Reduce the size of the trading window by eliminating or relocating the spec order box. The SS Pro windows are one line taller than those on Cyber, which eats up a lot of screen real estate.
5. My trading windows are showing only my position, ie L:500, but not the average entry price as Cyber did. This is very useful info to have in front of you.
6. Cyber displayed the number of shares shortable, which was very useful.
7. The balance bar is almost totally useless. The account net worth number doesn’t update, there is no window for closed P & L and the Day Trade BP number is incorrect, since it apparently doesn’t factor in MM balances. Really an embarrassing mess IMO.
8. The Account Detail window needs some work. Again, the Day trade BP is incorrect. The order status tab is not nearly as easy to read as the one from Cyber. Plus, it retains orders from prior days, which is very confusing. The positions tab likewise displays positions which have been sold. In Cyber, the window defaulted to the order status tab when a new order was entered, which was very useful and a good way to guard against accidental or “fat finger” mistakes.
9. The Buy and Sell keys’ positions are reversed from where they were in Cyber. I know that this is causing a lot of trouble for former Cyber users.
10. Although not an enhancement, I have to say that Cyber was known for excellent customer service. Apparently this is not a priority for Schwab. I have heard numerous horror stories of long waits, customer service reps who couldn’t answer questions, etc. I had the experience of being on Live Help for over 20 minutes trying to get a simple question about my BP resolved. Finally I gave up in frustration, as the rep seemed to know less than I did about the issue and he disappeared for long periods between responses. Totally unacceptable and very different from the Cyber experience.

I have to admit that I was a bit leery when one of the big selling points that Schwab made to entice CyberTrader customers to hang on through the migration was “access to mutual funds”.

So if you’re a (former) CyberTrader client and are now trading with SSPro – what do you think?  Disaster or doable?

Incoming search terms:

• schwab automated trading
• schwab cybertrader
• cybertrader schwab
• cybertrader migration to schwab
• automated trading schwab
• cyber trader video for sspro
• cybertrade inc schwab
• street smart ss pro
• schwab automatic trading
• bzbtrader schwab

The other day I received the notice below. It states that a law firm is bringing a class action law suit against Nutrisystem (NTRI) saying that the company cooked the books to fool investors in a scheme that, once uncovered, resulted in a huge one day drop in their stock. I’m sure there were a lot of investors that lost a lot of money that day. They were unfairly duped by these mean corporate criminals and they deserve some payback! (or so the argument goes.)
Read the rest of this entry »

Incoming search terms:

• class action lawsuit
• stocktickr dummy
• notice to join class action lawsuit for mesothelioma
• notice to join class action lawsuit notice

I went short MEDX today and it worked out ok (1.38R).  It had to have been the only stock on the market that held up pretty well after the fed announcement. 

Hopefully we’ll get some healthy trending in this market after everyone decides to trade again after fed day.

I’ve long said that one of the primary “skills” required to be a good trader is learning how to be wrong.  Until you can come to grips with the fact that you have absolutely no control over what the market does, you’ll never be successful.

There’s a tremendous need in all of us to “be right”.  The problem is that being right and making money in the markets are often two different things.  Some people never learn this skill in any aspect of their lives including trading.

I stumbled upon an article today that touches on this topic.  Here’s a quote from the article:

Some researchers divide perfectionists into three types, based on answers to standardized questionnaires: Self-oriented strivers who struggle to live up to their high standards and appear to be at risk of self-critical depression; outwardly focused zealots who expect perfection from others, often ruining relationships; and those desperate to live up to an ideal they’re convinced others expect of them, a risk factor for suicidal thinking and eating disorders.

“It’s natural for people to want to be perfect in a few things, say in their job — being a good editor or surgeon depends on not making mistakes,” said Gordon L. Flett, a psychology professor at York University and an author of many of the studies. “It’s when it generalizes to other areas of life, home life, appearance, hobbies, that you begin to see real problems.”

Trading is probably the worst thing to try to do if you’re a perfectionist.  You’re constantly being told how “wrong” you are (what’s your win rate?)    It’s handling these setbacks in stride that will allow you to make money instead of being perfect.  Leave the perfectionism for the open heart surgeons.