Can Short Term Trading Be More Profitable Than Long Term

[lawrence-lugar]

There are 263 threads about "edge". I suppose this will be the 264th.

This reply is Edgy

Can Short Term Trading Be More Profitable Than Long Term: Definitely, Yes. it's kind of impossible...to have a greater return by being long-term holding.
but the keyword is CAN...the devil is in the details...if you're just a dumbass purely gambling...then no.
you can make a return percentage of what hedge funds or mutual funds typically make in a year...in a day.

 

[dbphoenix]

Can Short Term Trading Be More Profitable Than Long Term: Definitely, Yes. it's kind of impossible...to have a greater return by being long-term holding.
but the keyword is CAN...the devil is in the details...if you're just a dumbass purely gambling...then no.
you can make a return percentage of what hedge funds or mutual funds typically make in a year...in a day.

This is from something I wrote about twenty years ago. If anything, it's easier to time the market now.

 

[newwurldmn]

Capital is not an edge unless you can corner/ manipulate markets or run a portfolio like Millenium.
Im guessing that you are far more successful than Loeb,Simmons,Cohen,Tepper etc as you have THE edge to trading..and capital....

Why you are successful is a far different claim to possessing the universal truth of trading.

Don't confuse the two

Capital is not an edge, but quality of capital is. Most institutional investors can get stopped out of a trade. But if you have the ability to sustain volatility, there's a lot of opportunities that others can't pursue. It's one reason Warren Buffet has done so well: he never has to cut his position. Very few can hold their stock positions without some kind of redemption in scenario like 2008.

 

[newwurldmn]

This is from something I wrote about twenty years ago. If anything, it's easier to time the market now.

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The only problem with the conclusions above is that the majority of the gains and losses come from like 10% of the days. So the timing works if you are 100% right, but it's very easy to be wrong as a few of the days are what differentiates the performance of both strategies. Miss a few big up days and all of a sudden the timing strategy is way behind the buy and hold.

 

[dbphoenix]

The only problem with the conclusions above is that the majority of the gains and losses come from like 10% of the days. So the timing works if you are 100% right, but it's very easy to be wrong as a few of the days are what differentiates the performance of both strategies. Miss a few big up days and all of a sudden the timing strategy is way behind the buy and hold.

 

[newwurldmn]

Would be very interested on reading this whole article instead of just snippets.

 

[lucysparabola]

I certainly think that there are many, many more opportunities intraday. However, I suspect that most retail traders that day trade are doing so because they believe it to be less risky due to some of the features that you mention. The problem is though that your question may be flawed a bit since you ask about catching the big moves intraday. I don't believe that that happens as a rule. I put forth to you that most retail day traders are engaging in quickly taking profits, using breakeven stops, using no stops and scaling in/out--------3 of these are specifically designed to choke off big winners. In addition most intraday traders are not nimble enough to trade on the short time frames. So, there may be more opportunity, but most of this may be missed by the retail trader whereas the outraday trader will have more time to reflect and make decisions and catch more of those setups. CAN you be more profitable when short term trading? Yes. Will you? Most likely not.

See, now you're rational again. I can't get a handle on you, lol. Good post.

 

[dbphoenix]

Would be very interested on reading this whole article instead of just snippets.

Not allowed to. Sorry.

But that's all there is with regard to this particular study.

 

[taowave]

Capital is not an edge, but quality of capital is. Most institutional investors can get stopped out of a trade. But if you have the ability to sustain volatility, there's a lot of opportunities that others can't pursue. It's one reason Warren Buffet has done so well: he never has to cut his position. Very few can hold their stock positions without some kind of redemption in scenario like 2008.

Good point and I would add,"Capital is not an edge,but the quality of the guy running it is".

 

[Buy1Sell2]

Good point and I would add,"Capital is not an edge,but the quality of the guy running it is".

Correct. Capital and the prudent use thereof is the only true edge in trading.