Making $150,000/ month trading US stocks.

Naz

Experienced member
1,391 22
This is what a young lady trading in New York, who appeared in Active trader magazine March 2001 edition was making.It was given to me by one of her bosses to give an indication of what his proprietry traders were doing.

Lets see how she trades in the article.

Firstly she trades US Nasdaq stocks.She does about 250 trades a day using NASDAQ LEVEL 2 direct access.Trading between 500-6,000 shares at a time.She makes $150,000/month and has made as much as $250,000/month.She has netted $50,000 on her biggest day and lost $19,000 on her worst.She is allowed to keep 70% of her profits.All her conversation is entirely about her reading of her level 2 screen and trades are naturaly direct access into that screen.

I'm a momentum -based trader she says."When a stock is moving i'll buy it when it slows i'll sell it.I take each buy differently from each sell,which is important.I take what i can out of a stock.sometimes i dont take as much as i can;other times i'll push a little to far.Typicaly i'll be in the quater,three eights or half a point profit range.I'll sometimes shoot for a point in some wider spread stocks,but i'll be taking more risk in those cases.(A point is a dollar run in a stock)

I look for higher volatility and volume so i can get in and out with size.But basicaly i'll trade any stock thats moving.

Another thing i like to do is play off support and resistance.When youre in a stock every day ,making hundreds of trades a day,you can see who the main buyers and sellers are,and when they're buying and selling.Thats how i identify support and resistance--I dont use charts for that.

First of all the only way you can realy tell who the main buyers and sellers are and what the market makers are realy trying to do ,is to be in the stock.You can see the prints going off either on the bid or ask.Ultimately the only way to actualy know who is doing that is when you preference them(direct a trade to them.ie a select net preference order)and either they trade with you or they dont.

Say i see Morgan Stanley buying all the morning,consistently on the inside bid,and then he flips sides and goes to the offer.Then i preference his offer because i think the stock is going up,and he dosnt trade with me.since i know he was a buyer earlier ,i know he's just trying to fake someone out.Basicaly you want to see aggressive buying or selling ,not just the posting of bids and offers.

You want to use this past trading information to provide a little extra insight to whats going on right now-not necessarily an absolute indicator of what will happen in the future.

The same kinds of signs ,but on the opposite side of the market.For example,if i've seen Morgan constantly going high bid,when i see he's not going high bid any more,and when people on the sell side -say other market makers like Herzog or Goldman Sachs -are actively selling and are not raising their offers to much or to quickly,that tells me the stock is slowing down and i should sell it."

She uses a S&P futures chart and a chart of the stock,but she uses them only to see if she's not trading late in the move.She gets her stocks from seeing them run on her Nasdaq movers list.

So there you are we can all go out and earn $150k /month now.

PS. By the way she was in her early twenties.One major thing is, that she certainly knows the answer to support,resistance and momentum is the correct reading of her level 2 screen. :)
 
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Henry

Active member
177 2
The article didn't happen to mention if she was single did it?? :D

Seriously - very interesting post Naz.

H.
 

Naz

Experienced member
1,391 22
Yes Henry,i believe she was and from the picture that i have with the article an absolute stunner.

If anyone wants to e mail me at rich765576@aol.com.and leave their address,i'll gladly post them a copy of the article with the picture and a lot more info.

Naz
 
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options

Senior member
2,374 218
Nice article Naz.

Stuff dreams are made of and something to aim for.

Options.


Oh, e mail link needs to be adjusted mate.
 
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FTSE Beater

Experienced member
1,518 4
Hi all

She does about 250 trades a day
:eek: That sounds stressful to me, but if she's in her early 20's then hopefully she can handle it, and not get burnt out before the time she hits 30.

But hey.....Each to their own. :)
 

dsmodi

Established member
509 2
Hi Naz,

Not that I'm after the picture, "umm honestly", but your email addy don't seem to be correct....

Cheers...
 

Naz

Experienced member
1,391 22
Thanks,i've adjusted the e mail address.The reason i posted it was that i was having a clear out and found the copy that had been given to me.I shall now go and get some copies made of the part that i was given and send them out.Please make sure you leave an adddress as i will send it by post.Yes i know thats boring in this electronic age.

The reason these people trade US stocks is because if the index moves x% there will always be stocks that move 2 and 3 times that movement.If you have software that shows you which stocks are moving then youve found something to trade with arguably more potential than the index.

Now the next thing is you have a system that lets you trade like a market maker and enter their domain.That means that you can view their movements whilst they are setting themselves up to trade in a particular way and you can also be nimble and act like a market maker yourself and pinch their order flow.So when they eventualy trade in the direction they have set themselves up for you have not only read the direction but entered the trade early and many times without any spread.The reverse is true when you come to sell.

Using direct access into the screen means you can take your trade in the blink of an eye.The Nasdaq is a true electronic market where you can trade anywhere that you want and how you want,its learning these added skills that help compliment set ups that may appear on chart patterns.

ie.I see a support level but will it hold or not? Once youve seen it on a chart you can view the level 2 screen to see if the players truly want to hold that level or are they all pulling their quotes and leaving that area.If the ax (the controling mm) dosnt want to know,forget it every ones watching him and more likely they'll follow suit and the support level will collapse.
 
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Naz

Experienced member
1,391 22
Here is an example of why many US/UK traders enjoy playing Nasdaq stocks.THEY MOVE and hence give LARGE PROFITS.You can also trade them with level 2 software over the internet ,something that the US brokers are not allowed to advertise in this country.I wonder why? :) On the left is a daily chart of CKFR.It moved up 50% in four days and it showed up on all the scanners giving all of us a chance to use the level 2 direct access screens to jump on board and capture some of the momentum.

On the right is a thirty minute chart over a number of days.I've been keeping it in the corner of my screen just keeping an eye on it and every time its got near that support i've switched into the level 2 screen to see whats realy going on.At sometime i'm going to play this again but believe me it will be looking at my level 2 screen and watching the players that will tell me the true story of the next move in the stock.
 

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Naz

Experienced member
1,391 22
Hi Barry,

I'm glad you got your copy.To everyone else i'm still sending them out.If you want to ask any questions at the same time about Nasdaq trading feel free.My e mail is in the posts above.
 

options

Senior member
2,374 218
Thankyou Naz;
Got the post this morning, (sat) I know that you posted it Friday afternoon, which leads me to only one conclusion in that the post office are now using their long awaited L2 vans, i.e. The driver can see from a screen on his dashboard where traffic congestion is building up, and he smart routes the van to get around the dustcart that is blocking everyone else, drops off the mail at my house and is away before the congestion slows him down.

Yes, the young lady is an absolute stunner as you say, sad thing is I can't even offer to be her sugar daddy as she makes bundles more than me. :( :p :p

Couple of points to mention. (Apart from the obvious... down boys)
Is that she is obviously a very intelligent lady in that she spent seven years (3 in high school, 4 in college) studying programming for computer science. But it's how she has been handled that is interesting. (Eeeeasy lads, stay with me)

She had no previous experiance of the markets, so came to it with none of the usual floundering the rest of us normally have to go through, and she may not have got into it had it not been for her brother who was a partner in the firm. But she would have had training from an expert (her brother) right from the word go. 'This works, do it this way.'
But all credit to her for mastering the screen and making it work, for you can show people how to trade, yet when they try for themselves, they sometimes fall short of getting it right.

The other point was Ftse Beaters mentioning about 'burnout'.

I don't really think that exists to such a degree these days. When you had floor/open outcry trading then yes, it was a much more demanding way to trade and some traders could only last two years before being burnt out and finding other employment. They were usually drained after each session because it was such a physical way to trade. They couldn't pace themselves and got carried away and ended up being cannon fodder for the generals.
A lot of traders came into the market as the dot com bubble was rising and most had never experianced a 'crash' which is as we all know just a market correction in any case.
Remarks of, 'It's different this time', 'The market can't crash because it's too strong' were commonly traded as much as the shares were. I won't mention my favorite of that moment 'Time to order another Porsche'
Unthinking cannon fodder.

By these remarks I don't believe trading is only the domain of the young trader. It is no more tiring for the older trader to click a button 200 times a day then it is for his younger counter part.
Indeed the silver fox can bring more to the market by way of experiance and know how than the young wolf.

Just a question of finding style(s) that suit.

And by the same thought, sponsers of traders should not automatically go for the young bucks who are often inexperianced and cost the backer a tidy sum while they go through the learning process. The cleverest trader I know only trades mornings for a few hours a day. and only if his conditions are met. If not he walks away for the day. Wouldn't suit a backer or a top Nasdaq trader of course.
But he always looks very relaxed because he is pacing himself, apart from doing something he enjoys.

Had a thought last night:
If a bank or whoever wanted to put together a ready made trading team, they would only have to lift the top traders from here and wouldn't go far wrong. The fact that we use our own money to trade for ourselves gives us a better take on the markets against a trader who uses the 'firms' money and has a deluded view of associated risks. We have most of the clases covered, bit short on currency and bonds though I think.


Good fortune.

(And thanks again Naz)

Options.
 
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tradesmart

Experienced member
1,286 22
Nice Lady/Nice Money

Nice money Nas, and a very talented lady, but would that number of trades in one day be feasible in current market conditions with stocks being much cheaper and moving less - I'm thinking of the trading fee's. I thought that your current advice was to trade less and look to hold trades for longer.
 

options

Senior member
2,374 218
I've just seen how many people have viewed this post since its' inception of only a day. 276 and rising. This could cost you a fortune in stamps Naz...mmmm, think I'll buy royal mail on Monday.

Options.
 
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