changing my mind on day trading

Jdesey said:
bottom line, I can see the better lifestyle from day trading and being flat at the close and open each day.
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I guess it depends on how you want to spend your time.

I went the other way from day trading to swing trading.(Stocks, long only) I found it to be less stressful. I make decisions when the market is closed. I didn't keep good enough records to really compare the two but my returns are about the same and I spend way less time in front of a monitor.
 
The problem with day trading imho is the unbearable amount of noise that a market can generate. I doubt that a person can find trading setups just by looking at the chart. If you add automated alerts and triggers to set your trades you might be improving your chances a bit, but still you are bound to gambling.
Just run a backtest on any intraday data, let's say on 5 mins candles, and you will see that holding your positions over night for a few days leave better results than being flat every night.
 
angrytrader said:
The problem with day trading imho is the unbearable amount of noise that a market can generate. I doubt that a person can find trading setups just by looking at the chart. If you add automated alerts and triggers to set your trades you might be improving your chances a bit, but still you are bound to gambling.
Just run a backtest on any intraday data, let's say on 5 mins candles, and you will see that holding your positions over night for a few days leave better results than being flat every night.
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you are right mister.
most of the time, the market is very noisy and choppy.

That's why day traders do the Intermarket correlation to sieve out the noise.
and they have multiple screens and charts for the various financial instruments.
 
The money is always made on the buy, the exit is the icing on the cake, but if the buy is bad, the trade doesn't win. So, if you're a swing trader, you're looking to buy in the lower half of a ticker's current trading band, if you're a day trader, you're trying to nail troughs and sell on peaks. Entries using a chart are pretty easy to find, there are four or five tells, so that's not the challenge for day trading, the challenge is keeping track of known selloff times and having a pulse for momentum, a directional tell (price follows volume, up or down).

I use charts (personal preference), not candles, which I find distracting. I watch the charts, and study the volume of the last 30 minutes, comparing it to the Bid/Ask and especially Size changes as the charts draws, to detect momentum pivots.

Overnight holds not at a true bottom of the band are risky, as if you hold in the middle or top, you could get hit pretty hard the next day. Swing trades require a more careful identification of the bottom. Both can provide good returns, but it's all about the buy, then trusting it.
 
nodoubts said:
The open is very volatile, and if you trade it, you need an extremely fast and responsive platform, which I have. It allows a spread of bids to be dropped over any range, any share quantities, on one-click, with no automation, in 1/10the of a second. All bids are removed on one click, with equal speed if a re-set is needed.

It's the only way to trade "chaos," especially on scary Dow drop days, like in March 2020.

Generally, since MM and brokerage algos are not that original, 10am and 11am are "known tops," 10:30 is a known trough. Always either 10am or 11am will be a top, so if 10am is not, you can bank that 11am will be.

I always enter the session expecting a 10am top if the Dow futures are friendly (green), and a walkdown to 10am when red (almost always on Mon-Tue, accumulation days, where news freezes traders, then they sell down quick, get the panic started, accumulate and flip back into the market). In short, if 10am is a drop, 11am will be a top. Both are also often tops.

Open breakouts shoot up because there's little resistance of sell orders stacked above the open price, so a quick buy up by MMs catches everyone sleeping, getting them to chase, fueling the pre-planned "launch."
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You're extremely smart and truly know your stuff - you're professional level. I hope you stay around the forum, you have a lot to offer.

You've probably been trading at least 15 years I'd guess, including at a firm. Anyways, thx for refreshingly correct and professional posts.

fwiw I had a very green day, 119RTs mostly hedge/pair trading SQQQ/UVXY vs SOXL today.

I trade sequences of 4-5 entries spaced .2max apart using OTO orders to automate.

You're right re volume, flips for seeing reversals. I live on the tape, charts are very secondary though I can't get amateurs to understand.

The math is always more important than charts. 80% plus of my trades I'm not even looking at the chart, but non pros don't understand, sigh.
 
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Thank you very much KCalhoun for the kind words. I think it's important to share, forces you to be sharp when you explain something. I've also flipped a lot of SQQQ/UVXY, both are ETFs that run opposite the Dow (UVXY makes more sense on the long side, SQQQ for shorting, since UVXY used to be shortable but no longer is). Remember, ETFs have a set lifespan, they sunset and exire. I think UV sunsets and disappears in a year or two, fyi.

UVXY/SQQQ
They move in unison, and on a side-by-side comparison, but... you actually make a bit more profit on UVXY than SQQQ for the same dollar amount in. SQQQ moves (+/-) 1.00 for every Dow 200 pt move. UVXY moves (+/-) 1.00 for about every 330 Dow points. The result is that, for the same dollars spent on both, for the same Dow move, UVXY returns 1.25 to every 1.00 SQQQ makes you because of their difference in price.

In essence, UVXY returns 1-1/4 times what SQQQ does long, so the rate of return for SQQQ long is less by 25%. Best use of both is UVXY long, SQQQ short (if you short). Why trade SQQQ long in a pair with a lower return rate (you don't need the pair). SQQQ is about 2.5x the price of UVXY, so simply buy 2.5x more UVXY instead, and you'll make another 25% on the trade to boot. You'd simply hedge UVXY vs. SOXL and make more, with a simpler trade.
 
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Since I work during the day, I am a night time trader. Felt very good tonight, seeing when not to trade, then going to play some video games, finally saw a a setup and took it. No I was not always getting this high of win rate, was doing bad in volatility till I finally decided to get hard core on waiting for a good setup. Also I give credit to the limitless pill I have been taking.

CL avoid waterfall strategy report.jpg
 
If your software was simpler and faster, do you think you'd be able to trade better in volatility?
Were you able to see what you'd want to do, but things moved too fast, or not able to see what to do in a volatile moment?

Do you think your win rate would improve if you could do what you could think as fast as you could think it? I'm working on a new software project that solves that paradox, so I'm curious. Would love to hear your thoughts. Thanks
 
nodoubts said:
Thank you very much KCalhoun for the kind words. I think it's important to share, forces you to be sharp when you explain something. I've also flipped a lot of SQQQ/UVXY, both are ETFs that run opposite the Dow (UVXY makes more sense on the long side, SQQQ for shorting, since UVXY used to be shortable but no longer is). Remember, ETFs have a set lifespan, they sunset and exire. I think UV sunsets and disappears in a year or two, fyi.

UVXY/SQQQ
They move in unison, and on a side-by-side comparison, but... you actually make a bit more profit on UVXY than SQQQ for the same dollar amount in. SQQQ moves (+/-) 1.00 for every Dow 200 pt move. UVXY moves (+/-) 1.00 for about every 330 Dow points. The result is that, for the same dollars spent on both, for the same Dow move, UVXY returns 1.25 to every 1.00 SQQQ makes you because of their difference in price.

In essence, UVXY returns 1-1/4 times what SQQQ does long, so the rate of return for SQQQ long is less by 25%. Best use of both is UVXY long, SQQQ short (if you short). Why trade SQQQ long in a pair with a lower return rate (you don't need the pair). SQQQ is about 2.5x the price of UVXY, so simply buy 2.5x more UVXY instead, and you'll make another 25% on the trade to boot. You'd simply hedge UVXY vs. SOXL and make more, with a simpler trade.
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Brilliantly put, thanks -- you're right re roi delta UVXY vs SQQQ. I mainly trade UVXY during market drops, then flip into SOXL (which is better than TQQQ) for long action.

The reason I also trade SQQQ is because sometimes recently it's less choppy than UVXY. Good to know re UVXY sunset, thx. I still miss TVIX badly, during it's final months I bought 56 sold 940.

One of my favorite go-to trades for years is eod volatility spike in UVXY (TVIX was way better). Oftentimes the 3:30 or 3;50 to 4pm runup is an easy trade.
 
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