How to Get Started in Electronic Day Trading – Review
Most of us take the long view of investing: We piece together a diversified portfolio to minimize risk and slowly accumulate the assets to pay for costly events like retirement. It’s safe, it works and it’s the way millions invest their money.
That said, who among us doesn’t itch to get very rich, real quick, right now? Day trading scratches that itch. You trade stocks by computer in real time, dealing directly with professional traders (who are also your competitors). Instant wealth is possible. So is instant ruin. Everything is fast, scary and exhilarating. These days, day trading is practically a mainstream activity. It is estimated that day trading accounts for up to 15% of all Nasdaq volume.
In his new book, How to Get Started in Electronic Day Trading (McGrawHill, $24.95), an Amazon.com bestseller, David Nassar rightly distinguishes between this potent new tool and ordinary broker trading on the Internet, which is little more than glorified e-mail.
Rather, Nassar has in mind sophisticated real-time data and computer programs that let ordinary investors see the same stock information pro traders see at the very same moment. See a stock you want to buy? Click your mouse once and you’ve bought 1,000 shares. (Note: Nassar warns not to click twice, Windows-style, or you might double the order.)
Day trading got its start in the mid 1980s with a new system called SOES, which let PC enthusiasts buy Nasdaq stocks directly from market makers. Before long some clever people figured out how to use the system to go in and out of stocks in minutes and with the same inside knowledge of bid and asked prices that brokerage trading desks possess. Today the SOES system boasts lots of additional trading tools and networks, which are detailed in the book.
Readers will also find explanations of day-trading strategies, including short-term momentum trades and trading on stock splits, earnings announcements and plain old rumors. Although day trading still affects mainly Nasdaq stocks, the new SuperDot system lets day traders buy and sell New York Stock Exchange stocks, too.
How to Get Started in Electronic Day Trading makes day trading seem appealing. But be warned that day trading has its bad-hair days, too, when trades are not eye-blink fast and shorting stocks is difficult to impossible. Lots of people lose money, and it’s sometimes tough to say where day trading ends and gambling begins. This book is a great introduction, but promise yourself to get a lot more training before putting your money where your mouse is.
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