Day Trading Aint Easy

Hybridmachine,

I hope you're aware that the last month or two has been unusually profitable for simple breakout systems and that this is not normal market behaviour. This simple method will stop working at some point, probably just around the time you increase the size of your positions (murphy's law?).

Best of luck,

Q1
 
yeah hybrid, when the market returns to normal, only people who trade normally will make money. So the only way your system will work over time is if the market strats trading this way normally.

Then all the normal traders will continue to lose money because they will be trading a market that was normal, but now is normally abnormal.

It's just like murpheys law states. If you are doing something that isn't supposed to work all the time, it will probably keep working until you decide to do something else which isn't supposed to work and then that will probably start working.

Some people just can't fail no matter how hard they try.
 
hehe...

i like that...

still, it's just a warning. if you don't have a lot of market experience you can get hoodwinked into thinking low/high volatility is "normal"...it can seem easy to go with breakouts in a volalitile market or easy to fade them otherwise...until the environment changes...

that's all,

normally speaking,

:D
Q1
 
i like the saying here

http://www.defendercapital.com/Futures/axioms.html

for example

"Any technical or fundamental indicator that generates good signals less than 80% of the time is unreliable and therefore useless as a standalone trading system.

Most technical indicators generate good signals far less than 80% of the time.

Most fundamental indicators generate good signals far less than 80% of the time."

trading is the greatest non-sense activity im stumbled over in my short life so far...
 
Originally posted by Buckeye
I've been trying to day trade the ES with terrible results. I am using the hourly DMI and 15min stochastic to enter and exit trades and am finding myself frequently the victim of numerous head-fakes, causing me to overtrade.

I"m thinking about switching to taking longer-term positions (i.e. 1-2 day holding period) and increasing my stop to 4 points, hoping I can avoid the whipsaws.

Any traders here agree that moving to a longer time frame would be a good idea?
More...


I dunno, call me crazy, but have you considered finding a method that gives you an edge BEFORE you start trading? Performing surgery on yourself without knowing how is a painful way to learn how to do it. Since you didnt say you are paper trading, I have to assume you are trading with real (and dwindling) $$$.
My advice is to STOP.....and experiment on paper with various indicators you are comfortable with, using several different money management variations and different time frames. I think most indicators can give you at least a small edge, using proper money management, and no indicator will give you an edge with bad money management parameters. The 1st key is to match the indicators you are comfortable with, with the proper money management params. This just takes time, and some effort at record keeping. The next, and possibly more important step is to make sure the method you come up with is compatible with your personality. You can find the greatest method in the world, and if it doesnt fit your personality, you wont be able to follow it consistently. So...while you are experimenting, I also suggest you do a brutally honest self-assessment as to your personlity strengths and weaknesses, and try to incorporate those findings
in your method.
 
...or this

"There may well be a grand, cosmic harmony behind market motion, but all the technical market analysts put together are not grand enough or cosmic enough to understand it, much less trade it profitably."
 
...or this

"Trading truisms are lies. If it were possible to implement, "Buy low, sell high" or, "Cut your losses and let your profits run" in any meaningful way, then more people would be making money."
 
Originally posted by hardcash
...or this

"Trading truisms are lies. If it were possible to implement, "Buy low, sell high" or, "Cut your losses and let your profits run" in any meaningful way, then more people would be making money."
More...


Because you can't do it doesn't mean it can't be done.

btw. I think you'll find a truism cannot be a lie.
 
Originally posted by hardcash
...or this

"Trading truisms are lies. If it were possible to implement, "Buy low, sell high" or, "Cut your losses and let your profits run" in any meaningful way, then more people would be making money."
More...

If you cant cut your losses and let profits run you can not make money ....

It is hard that is why many lose ....

But there are winners.......



NKNY
 
Profitseer: Thanks for your thoughts. The reason I am considering moving my stops to 4 points is that I have been right on the direction of the market, but am still losing money because the market would move slightly against me, hit my stop, and then move back in favor of the original trade. I would then reinitiate the position, the market would then promptly move against me, hit my stop, and move back. This has been ocurring over and over. In fact, despite entering only short positions on Tues & Wed, I lost money in a downtrending market.

I agree that I need to protect capital. I have enough capital to take a few losses, but not if it continues every day. I understand the reason to paper trade, but don't agree that you can learn as much as when trading real money. I think I'm going to keep my 4 point stop, but will stop trading for the rest of the day whenever I get stopped out, thus limiting my losses to $200 per day.

Thanks again for you input.
 
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