Q&A by Don Bright
BASIC SKILLS FOR DAYTRADERS
Don, since you think (pure) daytrading
is a limited style, then how do other
daytraders make profits? Could you tell
me some basic trading methods or skills
for daytraders?— Anonymous
I’m not against daytrading, but I think
other strategies can augment your income.
Our new people learn how to do
“open-only orders” (OPG) on the NYSE.
We enter about 50 stocks, buys, and sell
shorts, based on fair value calculations.
Then, when a few of the stocks gap up or
down, they are filled only when the
specialist is filled. Why not trade on the
same side as the guy who’s been making
money for 200 years? Our daytraders
always have “outside envelopes,” the
practice of having active bids a few
pennies lower than the quoted national
best bid or offer (NBBO) bid and active
offers a few pennies above the sell NBBO,
to take advantage of sweeps, either collecting
for providing liquidity via ARCA,
or joining the specialist again on hybrid
overrides (exemptions and exceptions
to the NMS rules).