Day Traders-I won't say much more

If you think the exodus out of the market has eliminated the once mighty day traders (remember the late 1990's when day trading was a status symbol), you'd be wrong. The bevy of proprietary or "Prop. Trading" firms is alive, I'm not sure if they are well, but alive.

You may have been contacted by one of these firms, they advertise everywhere from Craigslist to Google adsense. Here's the idea, you get your license and you bring your own money and essentially become an employee of the firm, they say you can trade their money, but I doubt few ever get that chance. The appeal of prop. trading is the leverage these traders can use, this is a grey area or loophole that skirts Regulation T regarding day trading. So in some cases, these prop traders can get 10:1 leverage, far above what your broker can give you because of Reg. T.

The catch is you have to be trained by them and trade their system and I will say that the very same 50-bar 5 min moving average that day traders used in the 1990's is the same average they use today. Here's proof:

Note the quick dip in the QQQ below the 50 bar 5 min moving average and look at the volume spike, guess who those guys are? Prop traders. It's amazing to me that they don't get that Wall Street knows their habits and has had their number for a long time. In any case, you might want to keep this in mind when placing stops or looking for opportunities, it's pretty much a given and embedded in prop. trading to this day.