Millman has talked to the true movers and shakers in the field, and relies on some great behind-the-scenes research and his experience in writing for numerous financial publications, to bring us a book that is at once a history lesson, an eye into a day trading "boot camp," and even a test kit for the reader to see if he or she is fit (financially, emotionally, etc.) for what may turn out to be the investing (gambling?) craze of the new millennium.
This book is easy to read and quite captivating. Whether or not you're a broker, a "buy-and-hold" investor, a gambler, or just plain intrigued by what all those playing in the stock market seem to be talking (i.e., bragging) about at parties these days, you will enjoy this book. Even the Electronic Traders Association risk disclosure statement was interesting! Millman's style is smooth, and won't trip you up with dry details or obscure jargon. I read this in just a few hours; can't wait for his next one.
The book accurately reports that every time regulators have reviewed the records of day trading firms, a minimum of 90 percent of the traders were losing money. In one instance, at the Boston office of a national day trading firm, 67 out of the 68 traders there were losing money. The book also mentions that a very small number of traders are successful, although the market environment that most likely allowed them to succeed no longer exists. That is, most of these traders played momentum swings in grossly overpriced Internet and high-tech stocks. Many of these stocks, the ones that still exist, are trading at a fraction of their former prices, for example $8 vs. $280.
The chapter on day trading "boot camp" ironically is probably the most informative discussion of day trading strategies I have read.
I was particularly entertained by the account of how one individual left his one million dollar nest egg with a day trading firm and gave them discretionary trading authority over the account before he left on a trip, probably too naive to realize what he had done. The firm's traders traded the account down to $30,000, while one of the firms principals was continually hitting on this individual's attractive girlfriend. When she repeatedly rebuffed his advances, he finally said, "what do you see in him, you know he is broke". This is a perfect illustration of the type of people that operated these day trading firms. Their strategy was to soak the traders by charging $25 commissions while all along knowing that the chance of the traders succeeding was extremely remote.
It is possible, although very difficult to make a living as a trader; in every era of history where there have been securities markets, some individuals have done this. However, the infamous "day trading" phenomenon (the term "day trader" now being pejorative) attempted to sell naive individuals the notion that anyone could do it, all the while playing on their desire to get rich quick.