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Capability of Shifting to an Active Arena |
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Unlike day trading in one specific type of security, DAET traders can readily shift to any arena (stock) they wish to almost instantly. Someone trading gold, for example, often is quite inactive at times when gold is not moving around very much. Inactivity in the arena in which you trade does not present a profit opportunity. If there is no movement in the underlying security, it is virtually impossible to generate trading profits. Since thousands of Nasdaq and NYSE stocks trade every day, there are usually plenty of actively moving stocks that should meet the movement requirements of the DAET trader. For example, if Microsoft is trading in a narrow trading range, there might still be plenty of action in CISCO, Amgen, Intel, or any of hundreds of other actively traded Nasdaq or NYSE stocks. Each actively traded stock is an arena unto itself, and since there are hundreds to choose from, there is room for any number of DAET traders to be successful. No one need be crowded out. On many other exchanges, such as commodity futures exchanges, limited trading activity does not foster active participation by more than a few traders. If too many players enter the market, generating trading profits becomes almost impossible. |
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There is a limit to the number of shares a DAET trader can trade through the SOES system for any one order. At this writing that number in most cases is 1000 shares. The limited-size execution is for one transaction in the same security on the same side (buy or sell) during a 5-minute interval or sooner if you have become flat in the position. After 5 minutes or after turning over a position in a specific stock, the DAET trader is free to execute another trade in that security on the same side. |
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This limited number of shares tradable in one time period is large enough for most DAET traders to make a substantial trading profit, yet small enough to prevent a large loss if, in fact, the DAET trader maintains discipline. DAET traders can increase their activities during busy times to the extent of their capital by diversifying in several stocks rather than maintaining |
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