Title:
Secrets of the SOES bandit : the original electronic trader reveals his battle-tested trading techniques
Personal Author:
Publication Information:
New York : McGraw-Hill, 1999
ISBN:
9780070305779
Subject Term:
Added Author:
Available:*
Library | Item Barcode | Call Number | Material Type | Item Category 1 | Status |
|---|---|---|---|---|---|
Searching... | 30000004163683 | HG4515.95 H68 1999 | Open Access Book | Great Book | Searching... |
Searching... | -370082 | HG4515.95 H68 1999 | Open Access Book | Book | Searching... |
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Summary
Summary
This text provides strategies for the individual investor to take advantage of SOES - Small Order Execution System Trading.
Author Notes
Wall street guru Harvey I. Houtkin is the author of Secrets of the Soes Bandit: The Original Electronic Trader Reveals His Battle-Tested Trading Techniques (1998). This book gives the reader tools for trading using SOES (Small Order Execution Systems), DAET (Direct Access Electronic Trading), and a PC, and bypassing a broker. Widely known as the "Father of Electronic Day Trading," Houtkin and his firm, All-Tech Investment Group Co., won a pivotal 1993 SEC decision to open up SOES, a decision universally lamented by traditional Wall Street, which abhors the in-and-out system for its volatility.
Houtkin's firm has offices nationwide and has been teaching the sophisticated trading system to average people since 1995. Flamboyant and outspoken, Houtkin views himself as an iconoclast and leader of 21st century trading. He has appeared in Fortune magazine wearing a mask. The caption for the photograph reads "Harvey Houtkin, SOES bandit; a man Wall Street hates to do business with."
(Bowker Author Biography)
Table of Contents
| Preface | p. xiii |
| Chapter 1. What is Direct Access Electronic Trading and SOES Trading? | p. 1 |
| The SOES Bandit | p. 1 |
| Electronic Day Trading | p. 2 |
| Successful Trading Is the Key | p. 4 |
| The SOES System | p. 5 |
| Nasdaq Level II Trading Screen | p. 6 |
| Chapter 2. Advantages of DAET Trading | p. 11 |
| Financial Industry Impediments to DAET | p. 11 |
| Cost of Commissions | p. 12 |
| Instantaneous Order Execution | p. 13 |
| The Market Maker Window | p. 14 |
| Interpreting Nasdaq Level II Information | p. 15 |
| Remote Trading | p. 17 |
| Trading on the Internet | p. 17 |
| On-line and E-mail-type Trading | p. 18 |
| DAET Represents the Future of Trading | p. 20 |
| Execution Risk | p. 21 |
| No One Trades Without a Perceived Edge | p. 22 |
| The Ticker | p. 23 |
| The Regulatory Future Is Bright | p. 24 |
| Firm Quote Rule Order Size | p. 25 |
| New Order Handling Rules Help Traders | p. 26 |
| Beating the Spread | p. 27 |
| Many Market-Maker Advantages Have Been Eliminated | p. 28 |
| Advantages of DAET | p. 29 |
| Chapter 3. Is DAET Trading For You? | p. 35 |
| Take a Simple Test | p. 35 |
| DAET as an Occupation | p. 36 |
| Personal Qualities Needed for DAET | p. 38 |
| DAET Is Not Investing | p. 41 |
| Capital Is Required | p. 42 |
| The Learning Curve | p. 44 |
| Other Initial Costs | p. 45 |
| Chapter 4. Getting started | p. 47 |
| Increased Need for Training | p. 47 |
| Paper Trading | p. 48 |
| The Start-up Room | p. 49 |
| The Real Value of an Education | p. 50 |
| Choosing a Trading System | p. 51 |
| Choosing a DAET Firm | p. 52 |
| Chapter 5. Prelude to Trading | p. 55 |
| Trading Is an Art | p. 55 |
| Trading in General | p. 56 |
| Risk | p. 57 |
| Market Risk | p. 57 |
| Execution Risk | p. 58 |
| Trading Information | p. 60 |
| Treat Trading as a Business | p. 62 |
| Strategic Alliances | p. 64 |
| Successful Trades Count | p. 65 |
| Styles of Trading | p. 66 |
| Market-Maker Trading | p. 74 |
| Specialists | p. 70 |
| Parameter Traders | p. 71 |
| Sharpshooters | p. 71 |
| Fading the Market | p. 72 |
| Diversion Traders | p. 72 |
| Occasional Windfalls | p. 73 |
| Hybrid Styles | p. 74 |
| Fertile Trading Environment | p. 74 |
| Chapter 6. How to Trade | p. 77 |
| The Key to Successful Trading Is Discipline | p. 77 |
| What Goes on in the Mind of a Successful Trader | p. 77 |
| Wiggles and Jiggles | p. 79 |
| Head Fakes | p. 80 |
| Defensive Strategies Against Wiggles, Jiggles, and Head Fakes | p. 81 |
| Depth of Market | p. 83 |
| Finding the "Ax" | p. 84 |
| "Trading Through" Violations | p. 88 |
| The Art of Trading | p. 89 |
| Base Your Trades Upon Facts | p. 90 |
| The Effect of News | p. 91 |
| Analysis of Facts | p. 92 |
| Where Do I Find My Signals? | p. 95 |
| Standard Analysis | p. 97 |
| Technical Analysis | p. 97 |
| Fundamental Analysis | p. 99 |
| The Acid Test of Any Trade | p. 100 |
| Rarely Hold Overnight Positions | p. 104 |
| Selling Short | p. 106 |
| The New Wall Street Ninja | p. 108 |
| Market-Maker Secrets | p. 110 |
| Sector Trading | p. 111 |
| Don't Confuse a Bull Market for Brains | p. 112 |
| Market-Monitoring Programs | p. 113 |
| Trading Tips | p. 114 |
| Not Every Trade Will Go Your Way Every Time | p. 116 |
| Trade with Zest! | p. 116 |
| Market Opening Trading Strategies | p. 117 |
| Never Average Down | p. 119 |
| Trading Tips--No Fancy Straddles Are Necessary | p. 120 |
| Aspects of a Good Trader | p. 121 |
| The MarketMinder Screen | p. 121 |
| Selection of Stocks Is Important | p. 123 |
| Mathematical Trading Loss Parameters | p. 125 |
| Never Trade with Money You Cannot Afford to Lose | p. 126 |
| Emotional Factors in Trading | p. 127 |
| Learn from Your Mistakes | p. 129 |
| Nasdaq International Trading | p. 131 |
| The Stock Market of the Future | p. 132 |
| Rules for Success | p. 134 |
| Ways to Lose Money | p. 134 |
| Chapter 7. Deep Dark Secrets of The SOES Bandit | p. 137 |
| I Am The Man Who Rocked Wall Street | p. 137 |
| The SEC Consent Decree Against the NASD | p. 140 |
| Regulatory Accommodation | p. 144 |
| Nasdaq Is Flawed in Concept | p. 149 |
| SRO Responsibilities | p. 150 |
| Membership Organization | p. 150 |
| Nasdaq Market Operations | p. 151 |
| Class Action Update | p. 151 |
| Nasdaq Price Rigging Appears to Continue | p. 154 |
| Payment for Order Flow | p. 156 |
| What the New Order Handling Rules Mean to You | p. 161 |
| The Industry's Trading "Conventions" | p. 163 |
| The Fight for Positive Change Begins | p. 164 |
| The Crash of 1987 | p. 169 |
| A Brief History of DAET Time | p. 173 |
| SOES Bandits | p. 177 |
| N*Prove | p. 178 |
| "SOES Ahead!" | p. 179 |
| The Changing Slant of the Media | p. 180 |
| A Second Look at the Cost of Courtesy | p. 181 |
| The Power of the Order Clerk | p. 182 |
| The Obvious Error Rule | p. 184 |
| The Market Makers Wanted to End SOES and DAET | p. 185 |
| My Comments on the NASD Litigation | p. 187 |
| NYSE Management Principles | p. 187 |
| Chapter 8. What Your Broker Doesn't Want You to Know: Or Bearing the Bull | p. 189 |
| Regulators Are Potentially Part of the Problem | p. 189 |
| The NASD's Regulatory Deficiencies | p. 190 |
| Backing Away | p. 191 |
| Excused Withdrawal | p. 193 |
| NASD Harrassment | p. 195 |
| Professional Trading Accounts | p. 197 |
| Selective Refusal to Trade | p. 199 |
| The Pricing Convention | p. 200 |
| The Role of INSTINET | p. 200 |
| The Chinese Market | p. 202 |
| Bear Stearns Meeting and Subsequent Narrowings | p. 204 |
| Publication of the Christie-Schultz Study | p. 204 |
| The So-Called Audit Trail | p. 207 |
| Coodinated Activity Among Market Makers | p. 207 |
| Delayed Reporting of Trades | p. 208 |
| The Return Trade Courtesy | p. 209 |
| Improper Disclosure of Customer Orders | p. 209 |
| The Courtesy of Mutual Cooperation | p. 210 |
| Afterword | p. 213 |
| Nasdaq Glossary | p. 215 |
| Index | p. 223 |
