same here..but back to the topic-
http://www.elitetrader.com/vb/showthread.php?s=&postid=3008697#post3008697
Day trading as a living should be impossible
- Thread starter abdul_mcgee
- Start date
same here..but back to the topic-
http://www.elitetrader.com/vb/showthread.php?s=&postid=3008697#post3008697
Awesome
^Same topics get recycled around here.
It's possible to do much more than 8% a month.
Expenses shouldn't be more than 2-3K a month while building capital.
The point is to build something small into something big.
Do not withdraw capital until the initial stake has at least quadrupled.
Ideally, once profitable, withdraws should be avoided until a trader has 500,000$.
That means side income is necessary to support bare-minimum living expenses. Either you or your wife should have a side job.
First, you need to find an edge. This can take years.
My advice would be to take a one year leave of absence from your job. Then treat research as a full time job (10 hours a day, 5 days a week).
It's possible to do much more than 8% a month.
Expenses shouldn't be more than 2-3K a month while building capital.
The point is to build something small into something big.
Do not withdraw capital until the initial stake has at least quadrupled.
Ideally, once profitable, withdraws should be avoided until a trader has 500,000$.
That means side income is necessary to support bare-minimum living expenses. Either you or your wife should have a side job.
First, you need to find an edge. This can take years.
My advice would be to take a one year leave of absence from your job. Then treat research as a full time job (10 hours a day, 5 days a week).
It's the difference between a scalable passive investment return, and a non-scalable P&L from a full-time job. No contradiction required.
It's not impossible with an edge and propshop leverages------OR starting with enough funds that the passive income covers your expenses or having a wealthy wife, trust fund, etc--- it is impossible for the average guy without the previous advantages unless you like being a hermit. surf
That's me, am a hermit and why I have recommended to closest of friends of do something else than day trade if you have to go at it alone. There is just too much to know what not to do and what to do to get in and 99% of what to do once you are in a trade. Then there is equipment, internet, brokers, etc...It is very tough. I was dedicated, I was divorced, didn't have any kids, made great earnings from government job and businesses I had started and some rental houses, so I didn't have the strains of not having money coming in to pay bills, worked hard and no matter how much I lost in funds or mental anguish I went on.
It is just plain easier to do longer term with much less energy and much better family life and life in general, it be much less excitement but more money can be made in long term, Buy low and sell higher. Learn options, time decay is wonderful, slow and consistent.
When you are married and have kids, people buy insurance and yet when guys are trading, hardly any have insurance or a back door of how to offset the risk, this is a game of risk, if you don't concentrate on risk, you will lose in long run.
Personally I think it is very difficult to make any money day trading, as the commissions and slippage generate too much of a headwind, though plenty of people on this site seem to manage it.
As others have said, to live off a realistic trading profit you need to have a much larger capital base or much lower expenditure.
I trade more slowly (average holding period one month). I expect to make about 10% -15% a year ON AVERAGE. Last financial year I made 57%. Some years I'll lose money. This means you also need to have eithier other income (say in passive dividend and bond coupon generating investments, or in rental property, or from a spouses job) and/or a large cash reserve to cover say 5 years of zero trading profits (with no other income, less if you have other income to make up the shortfall).
GAT
As another person said, swing trading is the way to go. I've found day trading to be entirely too taxing. I'm usually right on 85-90% of my calls but there's no room for error when it comes to acting on those calls. Besides, this may be a personal preference, I don't care for watching the markets all day. I'd much rather hold a trade for a few days, make a few G's per contract and be done with it.
That's a big problem in how most day traders view day trading. They think they "have to" or "need to" watch the markets all day to be a day trader. This is a misconception commonly among newbie day traders and other types of traders that are not day traders.
Those that figure out they don't need to trade all day as a day trader and can be successful at day trading just a few hours per day of trading. These are what I call the efficient traders because they know when to concentrate their trading efforts. Unfortunately, there are those that act as if they are offended by day traders that only trades part-time for a living (just a few hours per day)...they dismiss those traders via saying they aren't a true day trader as if their trading stats do not count.
Note: I have no real facts but I believe there are more part-time day traders making a substantial income from day trading while having another source of income (e.g. investments, job or business) in comparison to those that are exclusively doing day trading and nothing else.
Why day trade if its so tough ?
Some traders don't have the mentality or psychological make up to do swing trading or long term holds (position trading) while others have the psychological make up for day trading because they stress to much if they had to hold overnight trading positions especially in today's markets that are more globally connected than ever seen before in the history of the markets. There's also those that do many types of trading...day trade and swing trade and long term trading. They then label the trader as a guru, master trader, expert when in fact the trader never used such terms.
There's also a problem with how easy it is for a trader to open a trading account...only qualification is "some money" and "valid ID" and then you sign an agreement you understand the risks of trading but in reality...you do not understand the risks of trading. Then again, the same is true for other types of traders (e.g. swing trading, position trading) and investing.
With that said, the bigger problem with day trading as I've noted for +15 years is that most do not approach it as a business and most seem confused about the fact they can be a day trader (full-time or part-time) while holding another job or business...regardless if its passive income or primary income. Thus, I see too many day traders approaching their trading like a hobby while having the illusion it can be a job like any other job they've had.
As to the issue about day trading as a sole source of income...that's not really a retail conversation. Its more of a professional conversation in that someone that has the background of a professional trader or a strong network for such will most likely be someone that can do it...
Make day trading their only source of income because they understand the markets in a way that the typical retail day trader doesn't understand. Simply, there's different types of day traders out there that I prefer to view as the "professional day trader" versus the "retail day trader"...both are at home traders.
The first day trader I ever met was a former floor trader (he worked as such for 10 years) that had quit his job to trade his own account from home as a private trader. The second day trader I ever met was a former institutional trader (he worked as such for 12 years) that had quit his job to trade his own account from home as a private trader. After those two guys and for several years...then came the retail traders during the big boom of the dot.com days.
All of he above were at home traders. Yet, only a small group of them were very professional and business like along with having a professional network due to their prior background. Its obvious which group that was...the ones that refer to themselves as private traders instead of as a retail trader although both groups traded their own accounts.
That's my point, the typical retail trader that wants to succeed in day trading...you got to be more business like in your trading and if you need help in the beginning via having a job or business on the side...do it.
Therefore, day trading for a living is possible and some are doing it...a small percentage. They just don't have that typical retail trader mentality that you can do such while ignoring the business aspect of trading. There's another issue, the definition of day trading itself. Back in the 90's, it was very clear there were many types of day traders. Today, in error, too many folks believe scalping is the only type of day trader. In fact, scalpers are just a sub-group of several sub groups of day trading.
Scalping is tough. Only guys I know doing such successfully have a seat on the exchange that enables them to get special commission rates, using automation, using a broker execution platform suitable for scalping. Simply, I don't know any profitable manual scalpers that's been profitable beyond a few years but I do know a few that's been profitable for at least a year now...will be interesting to see if they can continue as such beyond a year.
Yep, they are newbies and trading all day as scalpers. These are the guys that will eventually burn out and/or they realize the financial burden of doing such for a living because life is very expensive especially if you got a family to support.
Last of all, I've seen some clever questions at the forum the past few months by folks asking if its possible to be a profitable trader or profitable retail trader that trades for a living without any other source of income with a small account...of course not. Seriously, what kind'uv stupid question is that. I've never heard of a trader with a 5k to 10k account or smaller being able to trade for a living...the cost of private medical/dental insurance, life insurance and paying other bills will eat up most of that 5k to 10k easily in one year alone.
Just as importantly, I've never seen anyone here at this forum say that a small account trader can trade for a living. Yet, I've seen many newbie traders ask if such is possible. In contrast, I've seen many here at this forum say a small account trader can be a profitable trader.
Too many traders are easily offended by someone that say they are profitable. They react negative as if someone is saying they are a billionaire, own islands, live in some multi-million dollar gated neighborhood and is a philanthropist.
P.S. Another way to look at the above long message...day trading for a living should be impossible for the typical retail trader that does not approach their trading in a professional/business like manner.
Those that figure out they don't need to trade all day as a day trader and can be successful at day trading just a few hours per day of trading. These are what I call the efficient traders because they know when to concentrate their trading efforts. Unfortunately, there are those that act as if they are offended by day traders that only trades part-time for a living (just a few hours per day)...they dismiss those traders via saying they aren't a true day trader as if their trading stats do not count.
Note: I have no real facts but I believe there are more part-time day traders making a substantial income from day trading while having another source of income (e.g. investments, job or business) in comparison to those that are exclusively doing day trading and nothing else.
Why day trade if its so tough ?
Some traders don't have the mentality or psychological make up to do swing trading or long term holds (position trading) while others have the psychological make up for day trading because they stress to much if they had to hold overnight trading positions especially in today's markets that are more globally connected than ever seen before in the history of the markets. There's also those that do many types of trading...day trade and swing trade and long term trading. They then label the trader as a guru, master trader, expert when in fact the trader never used such terms.
There's also a problem with how easy it is for a trader to open a trading account...only qualification is "some money" and "valid ID" and then you sign an agreement you understand the risks of trading but in reality...you do not understand the risks of trading. Then again, the same is true for other types of traders (e.g. swing trading, position trading) and investing.
With that said, the bigger problem with day trading as I've noted for +15 years is that most do not approach it as a business and most seem confused about the fact they can be a day trader (full-time or part-time) while holding another job or business...regardless if its passive income or primary income. Thus, I see too many day traders approaching their trading like a hobby while having the illusion it can be a job like any other job they've had.
As to the issue about day trading as a sole source of income...that's not really a retail conversation. Its more of a professional conversation in that someone that has the background of a professional trader or a strong network for such will most likely be someone that can do it...
Make day trading their only source of income because they understand the markets in a way that the typical retail day trader doesn't understand. Simply, there's different types of day traders out there that I prefer to view as the "professional day trader" versus the "retail day trader"...both are at home traders.
The first day trader I ever met was a former floor trader (he worked as such for 10 years) that had quit his job to trade his own account from home as a private trader. The second day trader I ever met was a former institutional trader (he worked as such for 12 years) that had quit his job to trade his own account from home as a private trader. After those two guys and for several years...then came the retail traders during the big boom of the dot.com days.
All of he above were at home traders. Yet, only a small group of them were very professional and business like along with having a professional network due to their prior background. Its obvious which group that was...the ones that refer to themselves as private traders instead of as a retail trader although both groups traded their own accounts.
That's my point, the typical retail trader that wants to succeed in day trading...you got to be more business like in your trading and if you need help in the beginning via having a job or business on the side...do it.
Therefore, day trading for a living is possible and some are doing it...a small percentage. They just don't have that typical retail trader mentality that you can do such while ignoring the business aspect of trading. There's another issue, the definition of day trading itself. Back in the 90's, it was very clear there were many types of day traders. Today, in error, too many folks believe scalping is the only type of day trader. In fact, scalpers are just a sub-group of several sub groups of day trading.
Scalping is tough. Only guys I know doing such successfully have a seat on the exchange that enables them to get special commission rates, using automation, using a broker execution platform suitable for scalping. Simply, I don't know any profitable manual scalpers that's been profitable beyond a few years but I do know a few that's been profitable for at least a year now...will be interesting to see if they can continue as such beyond a year.
Yep, they are newbies and trading all day as scalpers. These are the guys that will eventually burn out and/or they realize the financial burden of doing such for a living because life is very expensive especially if you got a family to support.
Last of all, I've seen some clever questions at the forum the past few months by folks asking if its possible to be a profitable trader or profitable retail trader that trades for a living without any other source of income with a small account...of course not. Seriously, what kind'uv stupid question is that. I've never heard of a trader with a 5k to 10k account or smaller being able to trade for a living...the cost of private medical/dental insurance, life insurance and paying other bills will eat up most of that 5k to 10k easily in one year alone.
Just as importantly, I've never seen anyone here at this forum say that a small account trader can trade for a living. Yet, I've seen many newbie traders ask if such is possible. In contrast, I've seen many here at this forum say a small account trader can be a profitable trader.
Too many traders are easily offended by someone that say they are profitable. They react negative as if someone is saying they are a billionaire, own islands, live in some multi-million dollar gated neighborhood and is a philanthropist.
P.S. Another way to look at the above long message...day trading for a living should be impossible for the typical retail trader that does not approach their trading in a professional/business like manner.
Last edited:
@wrbtrader
@moneytrust
That's a big problem in how most day traders view day trading. They think they "have to" or "need to" watch the markets all day to be a day trader. This is a misconception commonly among newbie day traders and other types of traders that arenot day traders.
Those that figure out they don't need to trade all day as a day trader and can be successful at day trading just a few hours per day of trading. These are what I call the efficient traders because they know when to concentrate their trading efforts. Unfortunately, there are those that act as if they are offended by day traders that only trades part-time for a living (just a few hours per day)...they dismiss those traders via saying they aren't a true day trader as if their trading stats do not count.
Note: I have no real facts but I believe there are more part-time day traders making a substantial income from day trading while having another source of income (e.g. investments, job or business) in comparison to those that are exclusively doing day trading and nothing else.
---------------------------
you are so very correct in your observation. i found it very comforting to agree with you on so many of your points of wisdom.
i do not know either, where the idea of a person have to trade all day to become profitable
come into being and becomes so popular among practically all newbies and some gurus as well.
you truly do not have to trade all day, just a couple of hours would be more than sufficient.
but what a trader really needs and most does not have is the tool.... the trading setup to
accomplish these seemingly impossible tasks....a sort of holy grail setting.
and unlike many others, personally i do not think you need more than 10k to start.
if you can not keep this 10k alive and profitable, then it surely does not make any different,
if it were 100k or 1,000,000; it will erode to zippo at the end in due course.
do not wish to hijack this thread but yes, it certainly can be done with appropriate setups,
but these golden geese are never offered for sale by the proprietors.
what are on sale are usually left over and inefficient at best, my humble apology to many
in that dept.
enjoy a part time trader's harvest this morning. there is no commercial value or trading
advantage of any kind, implied or otherwise; in the attachment.
wishing everyone a very merry christmas and profitable trading as well.
@moneytrust
That's a big problem in how most day traders view day trading. They think they "have to" or "need to" watch the markets all day to be a day trader. This is a misconception commonly among newbie day traders and other types of traders that arenot day traders.
Those that figure out they don't need to trade all day as a day trader and can be successful at day trading just a few hours per day of trading. These are what I call the efficient traders because they know when to concentrate their trading efforts. Unfortunately, there are those that act as if they are offended by day traders that only trades part-time for a living (just a few hours per day)...they dismiss those traders via saying they aren't a true day trader as if their trading stats do not count.
Note: I have no real facts but I believe there are more part-time day traders making a substantial income from day trading while having another source of income (e.g. investments, job or business) in comparison to those that are exclusively doing day trading and nothing else.
---------------------------
you are so very correct in your observation. i found it very comforting to agree with you on so many of your points of wisdom.
i do not know either, where the idea of a person have to trade all day to become profitable
come into being and becomes so popular among practically all newbies and some gurus as well.
you truly do not have to trade all day, just a couple of hours would be more than sufficient.
but what a trader really needs and most does not have is the tool.... the trading setup to
accomplish these seemingly impossible tasks....a sort of holy grail setting.
and unlike many others, personally i do not think you need more than 10k to start.
if you can not keep this 10k alive and profitable, then it surely does not make any different,
if it were 100k or 1,000,000; it will erode to zippo at the end in due course.
do not wish to hijack this thread but yes, it certainly can be done with appropriate setups,
but these golden geese are never offered for sale by the proprietors.
what are on sale are usually left over and inefficient at best, my humble apology to many
in that dept.
enjoy a part time trader's harvest this morning. there is no commercial value or trading
advantage of any kind, implied or otherwise; in the attachment.
wishing everyone a very merry christmas and profitable trading as well.