EP 077: How to be a profitable short-term trader in a high frequency world w/ Dennis Dick

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You’re about to hear a really interesting conversation I had with Dennis Dick.

Dennis first started out meddling with penny stocks, before soon joining a well-established prop firm known as; Bright Trading—this was in the late 90’s. To this day Dennis remains with the same firm, still as an active short-term equities trader, but also as their Market Structure Analyst.

If his voice sounds familiar, that’s probably because he’s the co-host of Benzinga’s PreMarket Prep live morning show too.

Some of the key talking points that come up over the next 60 minutes, include; scalping, surviving as a short-term trader in a high frequency world, various order types, and the opportunities that can be found trading the open (this is actually where Dennis makes 50% of his money each day—within the first five minutes).

Lessons learned in this interview:

  • Dennis shares his early encounters; trading penny stocks, holding the Bright Trading record for ‘most consecutive losses’, and quickly becoming profitable.
  • How Dennis adjusted his way of trading after realizing he could no longer compete on speed, and why scalping is no longer a viable strategy (in US equity markets).
  • The difference between providing liquidity and taking liquidity, why Dennis has a preference for certain order types and scenarios for when he would use them.
  • Dennis explains why there are great opportunities in trading the open and “fair value”. Plus, various information sources which can be used to extract alpha.
  • Why high frequency trading as a whole shouldn’t be blanketed as ‘good’ or ‘bad’. As Dennis describes it; some HFT activity is beneficial, some is predatory.

“We can’t control the environment that we trade in, so we have to adjust to it.”

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Links and resources mentioned:

  • Bright Trading – The proprietary trading firm Dennis joined when he first started trading, and has been with ever since—he’s now their Market Structure Analyst.
  • Benzinga Pre-Market Show – Dennis host’s a live pre-market show daily with Joel Elconin, discussing what you can expect in the upcoming session and more.
  • @TripleDTrader – Be sure to follow Dennis on Twitter!

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