Stocks & Commodities V. 31:8 (51): Q&A by Don Bright

Q&A by Don Bright

STILL DAYTRADING?

I have followed your articles and posts all around the web, and I actually met you and your brother [Bob Bright] at a trading expo a few years back. I think you and your brother have set a great example for traders who trade with your firm.

I read something you wrote recently that seemed to imply that daytrading has lost its luster, and perhaps you guys are focusing on other methods of trading. Would you please let me know if you’re still daytrading, or if your traders have forsaken it altogether?

— OHinvest

Thanks for the kind words, and I am the first to acknowledge that my brother has always been my beacon, if you will, and has led the way for our firm over the last few decades.

Now, let’s focus on your question about daytrading. Let me assure you that our traders do indeed engage in basic daytrading. However, over the last few years, many of them have focused on longer-term strategies as well. As traders, we must always continue to adapt to the marketplace. We cannot stay stagnant, or we will be eaten alive.

Let me quote myself from an article I wrote 10 years ago for this magazine (“Survival Of The Fittest,” January 2003; you can visit the article archives at Traders. com for the complete article):

Take a look around. The market bubble has burst, and we must learn how to adapt to the new era of trading the markets. There are new trading platforms, new ways to access the markets, and new products such as single-stock futures (SSFs) and narrow-based indexes. Traders must adapt to the new climate to remain successful.

As a species, traders face the same dilemma that many of our ancestors did — we must adapt or become extinct. Although the penalty for staying locked into a nonworking strategy may not be as severe as the fate of the saber-toothed tiger, poverty is a close second. We must constantly be on the lookout for that edge.

Back then, we had gone through some major changes in the marketplace, thus requiring our traders to adapt to everything from new trading instruments (ETFs, SSFs, and so on), to new ways of analyzing individual stocks. As the Internet grew, so did the amount of information made available to traders. We have grown accustomed to having so much data available that we wonder how we ever got along without it. Allow me the liberty of quoting a bit more from the same article, and then I’ll share what we’re doing differently these days.