Day Traders
- Thread starter Alan Au
- Start date
At the start it seemed to be impossible to make every day 1 point, or to average 1 point a day. It took me 10 years before I could make that damned 1 point a day. From then on it went better and better....with hard working an studying. Falling and standing up again.
Only people who tried at least 5 to 10 years (on a daily base) to daytrade can have a valuable opinion.
I tried in past during 2 days to become a doctor and came then to the conclusion that it is impossible to become a doctor.
At least 98% will never be a doctor. :eek:There are many problems with day trading. Here is my 10 cents.
First, the"strait talk" about the daytrading industry: The reason it is promoted is because it makes brokerage firms and the often related market makers a great deal of money. That is why you have a platform with all the blinking lights and "info" and "analysis". Much like a "one armed bandit" in Vegas.
So, clearly the problem number one is transaction costs, which most retail traders woefully underestimate or never bother to estimate in the first place. These folks are simply chum for the industry, nothing more. To the firm the "day trader" is a sucker or warm body that produces revenue for the firm or brokerage, nothing more. U wash out and are then replaced, they have the mathematics down while the day trader keeps his "dream alive" by reading books on discipline and being "in the zone".
The second problem is that over very short term holding periods, there is no chance to benefit from the market drift upwards, which is what causes long term investing to work.
The third problem is that most of the "analysis" on day trading does not take into account intraday variations in market liquidity, which in practice causes it to mostly be invalid and money-losing even though on paper or simulation it appears to work. In the time I have read ET ive seen "gurus" proffering ideas or buy points where I know there is no market liquidity in practice. Its a "paper, simulated trader" mirage.
The fourth problem is that it typically precludes one from having gainful employment and investing for the long term.
The fifth problem is that the typical day trader give up the benefits of a "job" but also their trading experience has no connection to other fields, creating a massive career risk, marriage risk, etc. It can be ruinous.
The sixth problem is that most day traders are the "dreamer" type who go to "rich dad, poor dad" seminars - they want to spend money on "education" but don't ask them to learn any serious analytical skills, its too much work for them.
The seventh problem is that dreamer types often have a thin skin, and worry what other people will think of their career choice, so they develop mental issues (Ive seen this in comments on this board many times)
The eight problem is most want to earn a living from a small account, which is very failure prone and doomed to eventual failure - In the small % of time the trader seems to be doing ok, they eat all the seed corn so never grow, then ultimately wash out when a small run of bad luck hits.
The ninth problem is many day traders learn "trading lessons" that almost guarantee they will never grow. They will just grind and burn commission. They never figured out that 90% of the "trading advice" out there is designed to protect clearing firms and brokerage houses, not help the trader make money. U see this type very frequently proffering their "great trade management ideas" to others, as if they are gurus.
The ninth problem is that they don't attempt to understand the industry in the slightest. They never visit a real trading firm or HFT trading firm to see who the competition is. They don't realize they are like a start up, undercapitalized corner store attempting to compete against wal-mart on price and selection.
The tenth problem is that most day trader overestimate their intelligence and ability to win. We have heard in all the books that "its not intelligence, is discipline" well, that is hogwash. Perhaps that was true in the past, it is not true anymore. Today people are high level scientists, top notch engineers, or extremely creative and unconventional people with substantial resources.
That said, I know some great day traders. The difference is they are very smart people, often managing a relatively large amount of capital for a proprietary firm, fund, or backers, have vast analytical skills that the 'dreamers" can't hope to match. And even then the non-market makers/HFT typically transition to longer holding periods.
First, the"strait talk" about the daytrading industry: The reason it is promoted is because it makes brokerage firms and the often related market makers a great deal of money. That is why you have a platform with all the blinking lights and "info" and "analysis". Much like a "one armed bandit" in Vegas.
So, clearly the problem number one is transaction costs, which most retail traders woefully underestimate or never bother to estimate in the first place. These folks are simply chum for the industry, nothing more. To the firm the "day trader" is a sucker or warm body that produces revenue for the firm or brokerage, nothing more. U wash out and are then replaced, they have the mathematics down while the day trader keeps his "dream alive" by reading books on discipline and being "in the zone".
The second problem is that over very short term holding periods, there is no chance to benefit from the market drift upwards, which is what causes long term investing to work.
The third problem is that most of the "analysis" on day trading does not take into account intraday variations in market liquidity, which in practice causes it to mostly be invalid and money-losing even though on paper or simulation it appears to work. In the time I have read ET ive seen "gurus" proffering ideas or buy points where I know there is no market liquidity in practice. Its a "paper, simulated trader" mirage.
The fourth problem is that it typically precludes one from having gainful employment and investing for the long term.
The fifth problem is that the typical day trader give up the benefits of a "job" but also their trading experience has no connection to other fields, creating a massive career risk, marriage risk, etc. It can be ruinous.
The sixth problem is that most day traders are the "dreamer" type who go to "rich dad, poor dad" seminars - they want to spend money on "education" but don't ask them to learn any serious analytical skills, its too much work for them.
The seventh problem is that dreamer types often have a thin skin, and worry what other people will think of their career choice, so they develop mental issues (Ive seen this in comments on this board many times)
The eight problem is most want to earn a living from a small account, which is very failure prone and doomed to eventual failure - In the small % of time the trader seems to be doing ok, they eat all the seed corn so never grow, then ultimately wash out when a small run of bad luck hits.
The ninth problem is many day traders learn "trading lessons" that almost guarantee they will never grow. They will just grind and burn commission. They never figured out that 90% of the "trading advice" out there is designed to protect clearing firms and brokerage houses, not help the trader make money. U see this type very frequently proffering their "great trade management ideas" to others, as if they are gurus.
The ninth problem is that they don't attempt to understand the industry in the slightest. They never visit a real trading firm or HFT trading firm to see who the competition is. They don't realize they are like a start up, undercapitalized corner store attempting to compete against wal-mart on price and selection.
The tenth problem is that most day trader overestimate their intelligence and ability to win. We have heard in all the books that "its not intelligence, is discipline" well, that is hogwash. Perhaps that was true in the past, it is not true anymore. Today people are high level scientists, top notch engineers, or extremely creative and unconventional people with substantial resources.
That said, I know some great day traders. The difference is they are very smart people, often managing a relatively large amount of capital for a proprietary firm, fund, or backers, have vast analytical skills that the 'dreamers" can't hope to match. And even then the non-market makers/HFT typically transition to longer holding periods.
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Company financials - rarely..., if ever
When reports / announcement due out - absolutely
Charts - absolutely
A pulse on us / asia / europe overall not a bad idea either
RN
First of all I'm not familiar with ES but 10-20 points profits? This doesn't sound like day trading to me.
I do not day trade but to believe you you are welcome to post audited statements of 10 years of trading. Otherwise, nobody will believe you. Sorry. Joe claims that he can bent spoons by looking at them. Do you believe him, just like that?
The one-minute chart of crude oil looks really boring now. GC is a little better.
what is financial report?