The California Raiders: Piranha Traders

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The California Raiders is not a football team. It is a group of 25

traders who every trading day at 6:30 A.M. Pacific time begin a raid

on the stocks traded on the NYSE. They do not stop their attack

until the final bell. When they finish, the only things left are the

bones of the traders they went after on the floor of the exchange.

The California Raiders are what I term piranha traders. They trade

for fractions—1/8 here, 1/4 there—and take small bites of their prey.

They can attack a stock en masse when they sense weakness, and

when they do they can bring a stock down one bite at a time. Once

first blood has been drawn by the piranha traders, other traders

join the feeding frenzy, each wanting a pound of flesh. Once they

start, they absolutely will not stop until the closing bell. Who are these raiders who strike a stock without warning? The California

Raiders are made up of a group of former floor specialists known as

rogue traders by their peers. A rogue trader is a specialist or former

professional trader who has found it more profitable to trade on his

or her own than from the floor of the exchange. The raiders also are

made up of superior traders who have proved their ability by making

millions of dollars. They trade with almost unlimited amounts of

capital at their disposal. Just one of the raiders may trade over a

million shares in a single day. A few of the raiders are biomechanical

traders which you will learn about in Chapter 7.

If you are going to trade using a scalping strategy, you are going

to trade against market makers, specialists, and traders like the California

Raiders. Remember, 92 percent of scalpers lose money. If for

some unknown reason you have to trade for fractions, look for slowmoving

stocks with intraday trend. It may not be exciting—but boring

is better than broke.

The California Raiders is not a football team. It is a group of 25

traders who every trading day at 6:30 A.M. Pacific time begin a raid

on the stocks traded on the NYSE. They do not stop their attack

until the final bell. When they finish, the only things left are the

bones of the traders they went after on the floor of the exchange.

The California Raiders are what I term piranha traders. They trade

for fractions—1/8 here, 1/4 there—and take small bites of their prey.

They can attack a stock en masse when they sense weakness, and

when they do they can bring a stock down one bite at a time. Once

first blood has been drawn by the piranha traders, other traders

join the feeding frenzy, each wanting a pound of flesh. Once they

start, they absolutely will not stop until the closing bell. Who are these raiders who strike a stock without warning? The California

Raiders are made up of a group of former floor specialists known as

rogue traders by their peers. A rogue trader is a specialist or former

professional trader who has found it more profitable to trade on his

or her own than from the floor of the exchange. The raiders also are

made up of superior traders who have proved their ability by making

millions of dollars. They trade with almost unlimited amounts of

capital at their disposal. Just one of the raiders may trade over a

million shares in a single day. A few of the raiders are biomechanical

traders which you will learn about in Chapter 7.

If you are going to trade using a scalping strategy, you are going

to trade against market makers, specialists, and traders like the California

Raiders. Remember, 92 percent of scalpers lose money. If for

some unknown reason you have to trade for fractions, look for slowmoving

stocks with intraday trend. It may not be exciting—but boring

is better than broke.