“After the dot-com bubble popped two years ago, most assumed that amateur online traders would go the way of the dinosaur. Internet brokerage firms saw trading volumes plummet as many so-called day traders, burned and chastened, gave up and sought out a less risky investment strategy,” writes Stacy Forster in today’s Wall Street Journal
“But though their numbers have diminished, day traders are far from extinct.”

“Last week, nearly 4,400 individuals, down from 5,400 a year earlier, navigated New York City streets brimming with screaming hordes of teenage girls outside MTV’s Times Square studios, and a naked cowboy strumming a guitar, on their way to the Marriott Marquis for the International Online Trading Expo.”

“At the Expo, Jack Schreiner Mettel struggled to carry a shopping bag overloaded with books, pamphlets and handouts about trading and market timing. Despite the grim market picture, Mr. Mettel is raring to get started. The Staten Island retiree wants to become an ‘active’ trader, using a $20,000 stake to buy and sell stocks, as well as build on small mutual fund investments and technology stock positions.”

” ‘Right now is the time,’ he says. ‘The whole economy is going to improve by the end of the year.’ “

“Layoffs and weak corporate profits, and a trail littered with failed active traders, is no deterrent to Mr. Mettel. Feeling much more like 1999 than 2002, the mantra emanating from the Online Trading Expo is: Anyone can get rich in the stock market.”

“For the remaining true believers, vestiges of the old days remain. Crowding out ‘Warren Buffett’s Portfolio’ in the conference’s bookstore is ‘100 Ways to Beat the Market.’ Seminars about day-trading schools and the challenges facing active traders are among the Expo’s most popular.”

“Investing? The three guys standing behind Datek Online Brokerage’s sleek modern-wood display chat among themselves, rather than with would-be traders, at their empty booth. Datek, which does cater to active traders, seemed unable to attract a crowd in search of fool-proof formulas. Their complimentary highlighters are stacked neatly on the tables, waiting fortakers.”

“Across the aisle, eager trading recruits jostle to watch Larry Pesavento, the self-proclaimed ‘Trading Tutor,’ as he tracks the market and makes live trades. Listening to Mr. Pesavento, who trades for a hedge fund in San Diego, feels like peeking inside a time capsule. It’s reminiscent of day traders of the late 1990s, who spent days trading in and out of positions in Internet highfliers such as CMGI or Yahoo. He eyes a stock chart for tell-tale patterns. He’s a shark circling his prey.”

” ‘I want to get this down another half point,’ Mr. Pesavento says, willing the shares of Applied Materials to tick downward. The pattern seems obscure, but many in the throng nod knowingly. Minutes later, the stock nears his target point. “I’m getting antsy,” he says. Curiously, he doesn’t click a mouse. At the Expo, the Trading Tutor dials his cellphone and places his order through his broker.”

“During a break, Mr. Pesavento explains what people are seeking: Ideas. And hope. And, like any enthusiast, the diminished crowds present few challenges. ‘There’s a better quality of people coming through,’ he says. ‘Most of the people who lost their money in the Nasdaq are back flipping burgers.’ “