Day traders are the lone gunfighters of the cyber world. Hunched over their PCs, they are only as good as their last kill and are only in it for the money.
Not for them safe investments, established brokerage houses, long-term investments or sleeper stocks. They live and die by what happens in the here and now. Yesterday is history, tomorrow another world.
Day trading is a product of the online revolution, facilitated by the technology that has revolutionised the stock market and that has provided the market with the highs and lows of America Online, Yahoo and Boo.com.
More than five million Americans are engaged in day trading, a search for supposed easy money not seen since the days of the California gold rush. And as the book says, some become wildly rich, but most fail, and in the hunt, no strategy is too crackpot to try, no so-called guru too shady, no online chat room too pathetic, and no news break too dubious to play off.
Welcome to the Darwinian, sweaty, twitchy and lonely life of the online trader.
The book is structured around the rhythms of a trader's day and kicks off with our composite hero (there are two authors, don't forget) waking at 4.50 a.m., with anxiety already building before the markets open. As a full-time pro, he does not hold on to stock overnight, thus freeing him from that particular worry, but he then has to start the day running, which he does, fuelled by a pot of coffee.
He checks a couple of websites, reads the bulletin boards where other day traders post insults and praise, trying to puff or belittle stocks, and then it's down to work. The monitors are on, the graphs pulsing and the tiny amounts of money on individual shares falling and rising. What the day trader is looking for is what is called a story stock, one just about to take of. The scenario is this: find a laggard in a sector where all the major players have taken off. What this stock needs is a little lift, like a go-getting new president or some hopeful news about its online customer base expanding, and the first magical blip in the share price materialises.
Lots of news traffic then takes place among the full-time day traders. The bigger fish notice and the price blips again and then, hopefully, the turbo kicks in and, with luck, the stock gets a mention on one of the big-time business news channels.
Then the day trader sells, a day's work done and some handsome profits made.
But that is the exception; the norm is trading on the margins, incremental advances that yield a small amount - the hunt and peck through the thousands of companies quoted. A couple of hundred shares here, a thousand there, a slight advance, a quick sale, more accurately reflect the situation.
It is a grind and our hero makes no bones about it, but add up all the pennies and a good living can be made. He holds out for the decent break - like eBay, which furnished his apartment - or a succession of them, which will allow him to retire and go to live in Hawaii and play guitar.
The book is a good read, written in a punchy style. The authors easily capture the adrenalin-pumping terror of watching your stock and your money go up or down. They are unflinching in their pursuit of profit. To them, the Internet is a cash cow waiting to be milked, and not the tool that will expand man's horizons beloved of cyberphilosophers and purists. This is an involving and interesting read and a good rough guide to the rough-and-tumble world of the day trader.
comidheach@irish-times.ie
