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The one thing I found is that you can get caught up in the excitement of the action from the announcer's voice and that's not good. You want to feel like you are in the pits, since it sounds like you are, and if the announcer is yelling that Merrill is buying heavy, you want to buy with Merrill! Well, as you can imagine, that type of trading is a quick way to blow your account out. I remember one day about the squawk - I was talking with a trader friend thru instant messenger and he had just gotten the squawk thinking it was a needed tool. I was doing my trading and he IM's me saying buy es! Big buyer! Merrill Lynch!
About 30 seconds later price dropped hard.
I asked how that long went.
Well, you know what his reply was.
So we all know trading is hard enough, but here's how that quick 60 seconds or so played out with the squawk:
Point being that I found the squawk to mess with your emotions way too easily, esp in the beginning. It's a new toy and when you hear the guy yelling that Merrill and UBS are buying, you want in! The problem is that you have no idea what they are buying, when they are buying and if they even got filled to begin with. |
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Nice demonstration brownsfan
But very valid point....in many of the older trading books, they speak of the danger of sitting around the broker's office listening to the gossip....it can really make you second guess yourself and get caught up in the excitement. Kind of like the same way people get wrapped up in bright blinking lights at a slot machine...rationality goes right out the window.