Day Trade Online [Hardcover]

Christopher A. Farrell (Author)

Book Description

Publication Date: March 31, 1999 | ISBN-10: 0471331201 | ISBN-13: 978-0471331209

The explosive growth and low cost of online trading has created a new class of investor who can now make a living buying and selling stocks over the Internet in a way that was once reserved for Wall Street's most powerful brokerage firms and investment banks. While technology has made entering the "major leagues" easy, staying in is not. Before taking to the fast-paced, high-risk playing field, it's absolutely essential that you have a firm grasp of the rules and a solid game plan. Day Trade Online is the play book novice competitors need to become strong contenders. Written by seasoned practitioner Christopher Farrell, it is a one-stop, step-by-step overview of how to make a successful living, whether full- or part-time, trading via the Internet.
Day trading can be quite lucrative, but only if you know what you are doing. As Farrell points out: "Trading for a living is hard. Trading for a living over the Internet is even harder. There are many challenges and obstacles that confront you. Venturing into this jungle unprepared is a recipe for disaster." This straightforward guide provides the head start and heads up necessary to thrive as an Internet day trader, covering everything from the dangers and pitfalls of trading online to an in-depth analysis of which trading techniques work and which don't.
Day Trade Online presents inside information on the strategies of top trading firms, including the most secretive, misunderstood, and profitable function on Wall Street: exploiting the bid-ask spread. Along with complete details on this rarely revealed methodology, you'll learn about: The tools needed to get started in online trading. Trading on the NYSE and NASDAQ. Which stocks to trade - and which to avoid. Beating the specialists and the market makers at their own game. The dangers and pitfalls of online brokers.
Most importantly, you will learn to look at ten different stocks and pinpoint which one to trade, when, at what price, and why. With the right know-how, you will then be able to apply this knowledge to every single stock that you screen.
Written for the day trader, by a day trader, this is indispensable reading for anyone looking to join an increasingly popular - and profitable - arena.
"I see the ads on television. Open an account and your first trade is free. Trade as many shares as you'd like for one flat fee. Free real-time quotes. Free market research. Trade stocks. Trade options. With the click of a mouse. It's that easy. Anyone can do it . . . I think back on my time on Wall Street. Does the little guy really have a chance?" - from Day Trade Online.
Yes. You do have a chance - a tremendous opportunity to day trade online. But only if you are prepared. Only if you know what you are getting into. In Day Trade Online, a successful online day trader walks you through the ins and outs of day trading online, and provides you with everything you need to get started and be successful. This step-by-step guide will show you: How to choose and use online brokers. How to set up an online account. What equipment you will need and what it will cost. How much capital you need. What stocks to trade, when to trade them, when to stay out of the game. How to trade on margin - safely and profitably. The day trader's secret weapon - a strategy for your trades.
Be prepared. Get Day Trade Online for the tools, tips, and strategies you need to thrive as an Internet day trader. Don't make your first trade without it!

Editorial Reviews

Amazon.com Review

Day trading such stocks as Amazon.com, eBay, and Yahoo! sounds like a game for the gun slinger: jump into the fray and pull the trigger. Is that really the case? No, according to author Christopher Farrell, who earns his money just as Wall Street does--by making very small, short-term, high-percentage trades. Farrell, who works from home, has traded over 15,000,000 shares of stock via the Internet, producing a 65 percent annual return for his investment fund in its first year. Using detailed, user-friendly examples, Farrell shows how to place orders online and then sell minutes later for small profits that can potentially add up to thousands of dollars a day--if you pick the right stocks. He explains how the New York Stock Exchange allows traders to buy on the bid and sell at the offer, just like the professionals. Farrell also includes loads of tips, such as how to choose an online broker, how much to pay for commissions, and how to cope with a technology that's still in its infancy. If you've been thinking about joining the estimated 5 million online traders, then this book is for you. --Thom Hartle

Review

Of the many day-trading books that have made it on the Business Week list in the past year, Farrell's is perhaps the most readable. Unlike the other tomes written by veteran traders, his book really starts from the beginning, explaining how stocks are traded. Then he lays out some basic common sense -day traders should choose their moments carefully, getting in and out of stocks quickly, aiming to "hit singles, not home runs," he writes. He clearly explains the pros and cons of using regular online discount brokerage accounts and advises readers to expect occassional glitches and late order fills as part of the costs of doing business...Ultimately, DAY TRADE ONLINE is most successful at giving the reader a realistic picture of what the life of an online day trader is like.

See all Editorial Reviews

Product Details

• Hardcover: 256 pages
• Publisher: Wiley (March 31, 1999)
• Language: English
• ISBN-10: 0471331201
• ISBN-13: 978-0471331209
• Product Dimensions: 8.9 x 5.9 x 0.9 inches
• Shipping Weight: 1.1 pounds
• Average Customer Review: 3.2 out of 5 stars  See all reviews (185 customer reviews)
• Amazon Best Sellers Rank: #1,751,045 in Books (See Top 100 in Books)

More About the Author

CHRISTOPHER A. FARRELL is a national bestselling author of two books, "Day Trade Online" and "The Day Trader's Survival Guide". "Day Trade Online" is currently in its second edition, revised, updated and released in December of 2008.

Written as a first time author at the age of 25 back in 1998, his book Day Trade Online became a New York Times, Wall Street Journal, BusinessWeek and USA Today "business" best-seller, and he has been a guest on numerous television and radio programs, including CNBC , BBC World News, and Fox 5 Good Day New York. His works have been featured in magazines such as The Wall Street Journal, BusinessWeek, Worth and Online Investor Magazine and he has been a guest speaker at Massachusetts Institute of Technology (M.I.T.). Chris has also written articles on trading for Active Trader Magazine. Farrell's books have been translated into numerous languages worldwide, including Korean, German, Russian, and Italian. He is a graduate of Colgate University.

Customer Reviews

Most Helpful Customer Reviews

30 of 31 people found the following review helpful:

5.0 out of 5 stars excellent book - apply strategy to higher volume stocks, October 19, 1999

By A Customer

This review is from: Day Trade Online (Hardcover)

I've read Farrell's books several times and have been trading the way the book says for a few months - I made over $7,000 last month - I've refined the strategy to fit my risk profile - avoid illiquid stocks and stick with NYSE listed, more active low priced stocks instead- even ones that trade 1,000,000 shares a day are great, so long as they are below $10 per share - I really think it is the best daytrading book written because it caters to the online trader, not the high end daytrader- apply the teenies strategy to low priced stocks that have bottomed and you have a very good chance of making money - I have - and, avoid the dogs - for instance, a $5 stock that may have come down from $20 over a few days but has stopped falling and is picking up on high volume - stocks like that are done falling -the strategy works even better by lifting offers and then offer a 1/16th point higher on a limit - it is like initiating momentum - the genius of the this book is that the strategy exploits the online brokers - you can trade 5000 shares at a time of a $5 stock and make a 1/16th once a day and make out nice and really anger the online brokers in the process - my best trades are making 1/4's on 5000 share lots - buying a 5 3/8 and selling at 5/8 - thats $1250 bucks on a $10 trade commission - not to shabby - if it goes against you, just get out and lose a 1/16 - no big deal -

thanks for a great book -

23 of 23 people found the following review helpful:

4.0 out of 5 stars can be profitable if you screen, sreen, screen, September 23, 1999

By 

[e-mail] my nameis JJ (skokie, illinois) - See all my reviews

This review is from: Day Trade Online (Hardcover)

I have been trading for many years and have won several stock-market awards....This system will work if you follow Farrell's Rules that he pounded in our heads but he also mentioned some crucial rules only once...so if you skipped lots of pages because of the repetitive thoughts and ideas, you better read it again. He lists hundreds of stocks in the book but only a select few during select times of the day can with no doubt turn a profit. A lot of concerns with partialfills....just choose stocks trading over 150,000 shares (I promise they are there)...no problem getting in and out of a position such as this if and only if the spread looks something similar to this: 8 to 8.1875 bid size----5500 * 5000----asksize. This is just one of tons of similar opportunities but my point is that both the bid and ask ordersizes must be low....If you sit at that computer and keep checking your list of 10 you will find these opportunities and will make money--it may be a lot of waitng around and searching (stressful,frustraing, and sometimes boring) but hey you're at work. To limit your risk put a sell-floor limit such as $7.75 (up above example) in the rare case this 0 beta stock will even move an eighth much less a quarter. I've studied many monthly,yearly,3years, 5year charts on these stocks and the right stock fluctuates within $7-$12 trading range over the longterm and fluctuates about 25 cents monthly. HOw can you lose big money this way...Once you master the screening process and know what to look for and join DLJ Direct not etrade or ameritrade for fast dependable executions you will profit from this strategy. The important thing is that your onlinebroker has CONTINUAL real-time quotes opposed to getting snapshot real time quotes and having to click back and retype the ticker in - it will kill you. also, you need bid/ask spreads and sizes with quick execution.....try it out with $5000 of your money and $5000 of brokers. With floors and limits there is no way to lose big--aim for 7/10 profittable trades..... Notice that most of the critisizers are market makers and they are sick and tired of us taking food out of their mouth!!! people practice this strategy all day long--I watch and see so many opportunities vanish in seconds--suck it up and move on-Farrell warned of the disadvantage of the online trader..If you work hard you'll get 'em .....its an adventure .....please e-mail me with comments---anyone!

31 of 33 people found the following review helpful:

5.0 out of 5 stars Pretty good but repetitive, narrow focus, September 10, 1999

By A Customer

This review is from: Day Trade Online (Hardcover)

I skimmed through this book recently at a Borders Bookstore to see if it was worth buying through Amazon, since I now buy most of my books through Amazon. (Does that make me evil or what?) My thoughts are:

1) Great education on the specialist and market maker system. 2) Book is too repetitive. Good, but repetitive. 3) His trick for trading in the spread and taking some of the specialist's profits works, *if* you find the right stock and trade in high enough volumes, with low-enough commissions. 4) I started testing his method in an AMEX stock, but since I could only afford buy 300 to 500 shares at a time and pay $19.95 per trade, I had to make at least 1/8 on each round trip to profit. Waiting for the 1/8 movement takes a lot longer than waiting for a 1/16th, as Farrell recommends. 4) I've made 2 successful round trips so far and anticipate a 3rd soon, but my profits are tiny tiny tiny (like from $7 to $22 per round trip, after commission). 5) When I have more capital available, I hope to be more profitable, like the $128 per round trip while scalping 1/16hs, the way Farrell outlines. Time will tell. 6)The book also has a very short section about day-trading mommentum style (instead of bid-ask spread scalping). The techniques mentioned sound great, but I'm too poor and too chicken to try them right now.

7) Oh wait, The BEST part about using his technique is not the measly $32 I made so far, it's the sense of satisfaction I got from goosing the specialist. With patience and the right stock, you really can buy on the bid and sell on the ask, for NYSE/AMEX stocks) instead of the other way around.

Summary: If you want to understand the system of specialist (NYSE) vs. MM (Nasdaq) and you want to make $128 per round trip scalping teenies all day, BUY THIS BOOK NOW. The enjoyment I got from goosing the specialist is delicious (I just hope he's not reading this review).

If you want to play mommentum day-trading, or score big every day trading volatile internet stocks, buy some other day-trading book.