- Most people who don't succeed blame it on anything but themselves. Because admit they are not succeeding is bad for their ego. Failure is never pleasant.
- If you make claims, you should proof it too. It is too easy to bash on others. But I see no proof. Proof means show that you are a good trader but that it is impossible to make money. But the contradiction is that if you were a good trader you would make money.
- Slippage and commission can cost you maybe 15-25$ per trade. If you cannot make more than that in a trade you have a problem. The problem is you, not the slippage or the commission.
Can Short Term Trading Be More Profitable Than Long Term
- Thread starter Fundlord
- Start date
Given the average risk/reward and probability of winning trade is the same, short term trading will be more profitable. Bear in mind intraday trading can be scalping say 200 trades per day to maybe 2-3 trades per day depends on your style. Also need to factor in commissions as they play a larger role with smaller profit targets and stops. Inevitably one needs to do longer term trades as the account size grows because of liquidity needs.
When I day trade, I use no stops, even if I put stops of 10.00 points away in ES, if fat finger trader would hit 100,000 contracts-his orders are in the market already and I'd end up going way beyond 10.00 points, I know this, I might be the only day trader but I doubt it, I do Call or/and Put Debit spread options in SPYs as they more liquid than ES, they are done at very beginning of my day and one side or part of is liquidated 75 minutes later as I am done day trading manually, whatever is kept is monitored during the day to recover losses/make profits, I have a slight bias based on daily charts and overnight. I use them as Catastrophic insurance and only have 50% commitment to overall number of contracts traded. It does take away from bottom line, but gives me some risk protection. I don't have any idea any more of risk to reward, I don't base percentages that way in day trading, I test signals every couple of weeks to find optimum targets and areas where trade is likely to be wrong and not recover. I actually can't stand probability of profitable, non profitable trades, we all go into long debates of 50/50 or how money management can alter. I trade not to lose.
I was very very lucky not to have a computer first eight trading years, you had to think in terms of long term, commissions were over $100 bucks for one side in stocks and $150 to do futures of half side. Gave me many years to study but not refine my mental under-development issues and getting computer........wish I never got it, I did well in stocks, I was lazy using computer, I lost and lost, and lost etc, being fast is not being smart, uneducated trader is Bait, period. I love computers now cause of automation.
Long hours of just study, take any chart bar by bar and give each bar a label, a description of what it is, do that for 200 charts, then you start understanding what makes sense and what doesn't, what can happen and what can't.
I trade grains a good deal long term and use stops, most will place stops before day session opens, I never do that, I wait till open and after ten minutes, place my protective stops, and why most might ask why? I have found in my youth that too often market would jump over my stop getting me out at worst possible price of the day and very often market be up on the day and I was out of the market throwing things. If after ten minutes, I place my stops a bit below current days' lows and monitor so I can get my stops to where they needed to be. As simple as this sounds, took me a dozen years to come up with this. Many little nuances in trading you never read in books. And back testing is Hindsight to give us a chance of positive expectations.
Yes--exactlyThere was a reason for using that word. I'm just pulling this out of my ass, but I have a hunch that there are far more successful swing or long-term traders than there are day traders.
So, if you're currently a swing trader who's able to exploit that large up swing or down swing, it's not likely that you can become a day trader and exploit those smaller swings efficiently and profitably just like that.
This is one of the main advantages to outraday trading. Placing stops outside the noise. This can be carried over to intraday trading and a trader could use yesterdays lows or highs to place stops outside of even when trading intraday.
I agree with you except for maybe 1 thing:
average risk/reward, to me, is a calculation based on $, whereas probability of winning trades is a number that says nothing about $. for me there is no direct 1:1 relation between the two.
That's why we, or at least I, learned at school first to do math without computer or calculator. You should first learn and master to trade and when this works you can take the second step: make trading more comfortable.
First learn to walk, then learn to run.
I don't believe anyone really masters to trade, they is too many instruments, timeframes and countries. Math I use is more of comparison of stats, how to tweak one or two ticks. I think if you have to use higher Math to trade is overkill for trading futures, options is another thing though. My losses were due to not learning how to program fast enough, first computer had 5.25 inch disks, didn't allow for much data and 40meg HD. I think one should first learn to program well and filter in open code public systems to get an idea of how much work involved. I think there is always more you can learn about trading, certainly not as many as first twenty years, but always few a year.
Not sure what you mean but both are important for estimating trade expectancy. E.g. a trade with risk/reward of 3:1 (risk 1, reward 3) with 50% win rate, the expectancy over infinite repetitions would be a profit of 2 units. Risk/reward is a function of profit target and stop loss for a particular trade, win rate for a specific trade is a lot harder to calculate as you have to record data for different trade setups and it may become more or less effective as the market changes.
Sorry,
my english is not so good. We both speak about the same things apparently. So I agree with what you wrote.