Thought you weren't going to reply. LOL
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Day trading for a living - Almost impossible
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Thought you weren't going to reply. LOL
The second paper says: "There are thousands of occasional day traders, but in the average year 277,000 individuals engage in day trades in excess of $NT 600,000 per year (about $US 20,000) 2 and about 20% of these day traders earn positive abnormal returns net of fees (commissions and transaction taxes). Of course, some outperformance would be expected by sheer luck."
That statistic is actually very comforting for "any newcomer" but I don't expect you to actually read the papers you cite. That would require you not to be lazy.
But regardless, both papers are irrelevant to the topic of daytrading for a living.
You can't just analyze all daytraders as a sample, because very few people just randomly quit their day job to start "day trading for a living" unless they have already shown some profitability.
What you need is a paper which has a sample of those who: 1. originally had a day job, 2. had x years of profitability 3. then quit their job 4. track their returns for Y years.
No paper has that because that data does not exist.
20%???!! 20 freaking percent??!!! All those time, they have been saying only the top 5% make it so now they are saying 20% of us can be profitable??!! Wow!! That is very comforting for sure. One in just five of us can be making money by just two clicks of a button. Wow! No wonder nobody is working today. We have so high of inflation with no productivity.
You don't seem to have an intuitive feel of numbers. The gulf between 20% and 5% is astronomical.
Anyways, I welcome everyone to get into daytrading. The more competition the better, let the best man win. See you on the other side of my trade.
You don't seem to have an intuitive feel of words. I know the gulf between 20% and 5% is huge that's why I can't believe so large number of traders are making it in reality when they have always been preaching that only 5% of us win.
Love to be on the other side of your trades. Good luck!
intradays have to fight microstructure noise caused by HFT firms. every day ES makes a "jacked off squirrel" pattern. can't understand how anyone successfully trades it...most impressive.
Hello Volpri,
I 1000% agree.
Trading is not hard or complex, it just takes a lot of patience and studying to understand and get consistent profitable.
I do not know a longterm stats about trading success specific on daytrading style. But I know that any trader that spent considerably a long time like at least 7 years on trading seriously, the chances to be profitable goes up exponentially to at least 14% I have read. Of course there are other factors to consider here, but overall this is true.
For example there was a saying in the bank, that a studied person in a bank at the front office, had a 50% chance to be successful as a trader. Of course there are some market making profits involved, but there are also overhead cost which every trader needs to cover, or (s)he will loose this job for sure. But also the time spent is fulltime, often 12 hours per day and then weekend reading lectures and researching at home in addition, together with the best info terminals like Reuters and Bloomberg and other surrounding successful experienced traders too, which also helps to get to those 50% chance ex ante here.
There was the turtle trader experiment in the 80s and 90s then. And it was successful. Meaning that over 90% of aspirant traders can be successful later if they had the right experienced and consistent profitable trader as MENTOR. So to speed up the process and chances any MENTOR could be very useful, regardless for your trading style and traded instruments, as Mentors are totally different too. There is no one strategy, style, or instrument which dominates all others.
Those turtles had Richard Dennis and William Eckhardt as Mentors though...good luck getting that. They were also waaaaaaay more involved than your typical mentor...more like employers/managers. They had to trade exactly one way with any deviation or hesitation being heavily scrutinized. Performance was tracked closely with some having to be let go. They were also extremely selective with their original choices favoring specific types like pro gamblers and chess players.
Hard to compare the turtle experiment to anything that would happen to Joe Schmoe retail.