The Great AdapterQ: Lastly, what’s the most difficult part of this job?
A: I would say just the thought that—or maybe it’s just an inherent
fear—that someday I won’t be able to adjust or they’re going to
change rules in the marketplace. I hope it never happens, and I’ve
been able to adjust for seven years now. But you never know.
Lessons from Tyrone Ball
Focus on Only a Few Stocks to Develop a FeelTyrone’s message is similar to Steve Ickow’s: If you chose to be a
jack-of-all-trades, you will be master of none. In order to succeed in
trading, you need to establish an expertise in a particular domain.
As in all professions, specialization pays. For equity day traders
such as Tyrone, specialization means focusing on only a select
group of stocks and watching their price action intently. This is the
only way to learn the particular quirks of the stock and to discover
who the dominant players are in that particular instrument. In the
parlance of the game, it is very important to know who is theaxe
in the stock. The “axe” is simply a term used for the dominant
market maker who can literally make or break the price of the
stock. Knowing this information can help the trader to stay on the
right side of the trade.
Being Just a Little More Disciplined Than the Average
Guys Can Give You an EdgeThe house edge in roulette is only 5.26 percent. That means that
on any spin of the wheel, the casino stands to win approximately
53 percent of the time while the player wins approximately 48
percent of the time. This illustration is not intended to compare
trading to gambling, but rather to demonstrate that it takes a very
small skew in the odds to create a very profitable enterprise. Casi-
nos bank billions of dollars of profit per year on what, at first glance,
may appear to be only a small advantage. Similarly, Tyrone’s most
interesting point is that one does not have be perfect, just a little