Thank you. Didn't expect it but really appreciate this post.
I don't fully understand but there is enough for me to chew on so I won't pester you with more questions.
Best regards.
A Retail's Day Trading Experiment
- Thread starter ironchef
- Start date
I don't fully understand but there is enough for me to chew on so I won't pester you with more questions.
Best regards.
Don't congratulate me yet. We may all be fooled by randomness here.
One of the things I've become painfully aware of is that day trading in many ways feel like a job as you do have to show up on time and stay put at your computer. So, it's not for everyone.
Set it and forget it may work well with stocks that are trending off the open, but most of the time it's not suitable for day trading index futures which is my focus as you'll easily get stopped out of an early entry on a deep pullback before resuming the main move for the day.
@PPC, Fully test out your suggestion and approach will take up a lot of time but there are some simple tests I can do to test out using longer time frame.
I decided to backtest the last several days of trading, using 1 min, 3 min, 5 min, 7 min & 10 min charts and my reversal scheme. In a perfect world, hindsight is 20/20, the longer time frame gave better profits, better, longer runs. However, the losses for trading in & out during choppy times were higher meaning the risk of ruin is higher. If my first priority is limit losses, I have to stay with 1 min.
Your #1 to #6 is a completely different approach and require me to lay out a test plan. After my live trade experiment, I will work on it.
PS: If I use the same logic, swing trade will give even better profits, in a 20/20 hindsight world. Did a few backtest and indeed true. The cum losses however were large and I don't have a scheme to limit losses without missing opportunities.
Sometimes I feel like it is all random and I have been fooled by randomness.
Best wishes.
It’s hard to explain things in a paraph or two, plus I’m terrible in explaining things in English.
Nevertheless, if you’re aligning your intraday trades (M5 or higher) with H1, or H2 and with daily timeframes, then your losses should be reduced.
Since picture is worth thousandwords, here is one example of the concept for trend trading intraday (there are many other ways to approach it)
My experience has been it’s harder to ride a trend than scalp or do short term momentum trades during day trading. You probably will be stopped out 90% of the time unless your stop is wide, which would result in significant losses after a few wrong trades.
On the other hand, for beginners it’s far easier to learn scalping and short momentum trades first and train for the vital risk/loss control. Once you gain enough experience you can start to try longer trend trades.
On the other hand, for beginners it’s far easier to learn scalping and short momentum trades first and train for the vital risk/loss control. Once you gain enough experience you can start to try longer trend trades.
I think you understand what I am doing.
This post resonates with my experience. That is how I ended up with 10-15 trades every hour and trading off 1 min: Avoid large loss is job 1.
Since I am writing my response, let me add another:
1500 individual trades, win/loss is 50/50 meaning it is like a coin toss: random.
50 day trades, win/loss is 85/15, non random?
My conclusion: Data is too skimpy to draw a definitive conclusion because I am taking the difference of two large number (entry & exit prices) to extract a very small number (profit).
Hey Ironchef, I have really enjoyed your posts over the years. You do not come with an ego or pretense and feely admit what you don't know.
Someone said that the real test is in the live market and since you are trading stocks the live market is the perfect way to practice. Obviously you plan to put over 25K into your account so you can experiment with 1 share trying to make $1 per day or whatever you might have as your expectation.
There are zero commissions so you have an excellent chance to succeed. The only fee is the small SEC fee and if you are only trading one share they will charge you a penny on each trade but will credit back to you the overcharge before the next day's opening. Last time I traded stocks the fee was $8 per million is sales volume.
So get on your horse and ride into the storm and whip those big guys. Good Luck!
Someone said that the real test is in the live market and since you are trading stocks the live market is the perfect way to practice. Obviously you plan to put over 25K into your account so you can experiment with 1 share trying to make $1 per day or whatever you might have as your expectation.
There are zero commissions so you have an excellent chance to succeed. The only fee is the small SEC fee and if you are only trading one share they will charge you a penny on each trade but will credit back to you the overcharge before the next day's opening. Last time I traded stocks the fee was $8 per million is sales volume.
So get on your horse and ride into the storm and whip those big guys. Good Luck!
Thank you @Illini Trader. I laughed when I read your opening paragraph because it is funny.
To me, it is absurd to brag and pound my chest in an anonymous internet group. Besides, if I brag, I need to bluff. You guys can see through that in a microsecond. Be humble and learn as much as I can is a better alternative.
And thanks for your encouragement. I will do it for all the aspiring new day traders.
You are another good guy here. Best wishes.
I want to share this Steve Jobs speech with the new aspiring traders:
Like Steve said, it is like connecting the dots. As you travel through life, you have no idea what they were preparing you for. But if you have passion and keep working at it, one day you will be able to connect the dots and it is all there.