Can Day Traders make a good living.

Originally posted by stockerup
Kastro_316,

One of the key factors in how much you make is how much you can risk. Example:

Seanote (who I think most here on ET would consider a highly skilled trader) traded, according to my calculations, $621,845.00 worth of stock today. His total earnings was $7,165.00-- all winners, one flat, no losers, an exceptional day for anybody. That works out to be a 1% return on the money he put at risk.

Size is the key. If you're under capitalized you'll just be treading water at best.
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I see where you get that 621,845 USD from but I wonder, is this the usual way to calculate the % return?


Originally posted by Seanote
TODAYS EXECUTIONS:

15:16:27 CYMI BOT 2000 35.90
14:05:46 CYMI SHRT 2000 36.30
12:47:33 CYMI BOT 2000 35.73
12:17:54 CYMI SHRT 2000 36.17
12:07:28 QCOM SLD 3000 28.90
12:03:43 QCOM BOT 3000 28.70
11:53:13 QCOM SLD 3000 29.09
11:41:11 QCOM BOT 3000 28.85
11:15:35 CYMI BOT 2000 35.25
10:49:16 CYMI SHRT 1000 35.96
10:49:09 CYMI SHRT 1000 35.90
10:32:41 CYMI BOT 1500 35.00
10:27:17 CYMI SHRT 1500 35.47
10:21:17 KLAC BOT 2000 47.37
10:15:59 KLAC SHRT 2000 47.37
09:48:37 QCOM SLD 3000 28.85
09:15:20 QCOM BOT 3000 28.15

OPEN POSITIONS:

NONE

CLOSED P&L: $7,165 OPEN P&L: $0
MTD: $34,396 YTD: $237,670
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Now you could also say that the largest amount of money he had invested in the market at a given time was 94,740 USD (KLAC trade: 2000x47.37).

If you look at it this way he made a $7,165 return on what could be as little as a $94,740 trade account. That's a return of 7.6%.

And suppose he used max margin (25k account x 4 > 94 k)

that would be a return of 30% in one day with as little as 25K.

But I guess you shouldn't calculate those percentages like this, right?

Still impressive tough :)
 
The biggest difficulty is to not lose a 10 days gains on one single day which is not good for your account of course but for your mental.
Because you will want to recover in one day and often oversize your positions and overtrade.

Cut your loss but do not forget to cut your profit as well and not let your profit run as you can read everywhere. That s not true in day trading do not forget to catch your profit.
You have to take small profits but often and sometimes the home runs will come but only 1 or 2 times a month not everyday.
 
Nemsy,

My calculations are for the daily average. In looking at each individual trade, his returns are: 1.6%, 1.2%, .06%, .008%, 2%, 1%, 0%, and 2%. This is an average of 1.18% for the eight trades. When you back out his commissions, which appears to be $460 from his post, the average is 1% for the day.

It can be argued that your returns can be figured on the amount of money you put up irrespective of how much margin you take. I personally disagree with that and prefer to base my calculations on exactly how much the stock cost relative to how much money was made or lost on the trade. Margin exposes you to more risk and while you're in the trade you are responsible for the entire amount. That risk has to be calculated into your returns or IMO they do not reflect the true risk to reward ratio.
 
You can make a decent living in today's market (high five figures, early six) if you trade conservatively and disciplined. I don't think Seanote's trades are typical since I didn't see a single losing trade. The worst trade I saw was a breakeven one. You must really be in the zone to trade that perfectly which is not common. My average day would have about ten winners and four losers. Of course, I try to cut my losses quickly so I'm still net positive for the day.
 
Originally posted by onondaga


What's the odds of having "an upgrade, takeover, something like that" happening on the first of your five trading days after you have already taken a position?
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Don't think it doesn't happen. I was long a LOT of MSFT one day, when CNBC goes to a news flash....there's Janet Reno announcing the opening of anti-trust proceedings against Microsoft. Stock dropped 10 pts. in about a second...(this was at lunchtime when I was usually flat)
I couldn't even begin to count the times I had a stock position, and the stock was held during trading hours. Certainly enough times to age me an extra few years over the last 10.
The point of my post, however, was that "part time" is statistically insignificant. Believe me, I admire greatly that you have averaged 1.2% per day. But over time, that is an impossibility. If not an impossibility, then certainly a first!
 
I don't think Seanote's trades are typical

Sometimes it can happen but it is unusal see first gif
On average it is for me closer to between 60 and 65% of winners
see second gif

As you can see i am a scalper thistime because of too much faulse breakouts
 

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Originally posted by rs7
The point of my post, however, was that "part time" is statistically insignificant. Believe me, I admire greatly that you have averaged 1.2% per day. But over time, that is an impossibility. If not an impossibility, then certainly a first! [/B]
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So what would you consider is a more reasonable average return per day for someone like you trading full-time?
 
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