Originally posted by trader88
I was just wondering if daytrading (stocks) full time during a recession is a viable way to make a living.
Maybe longtime traders like rs7 or Don Bright who post here on ET could give some insight into this.
Thanks.
I hope Don can give more insight than I. I have not seen a market like this before. I started trading in 1979 right about the time of the taking of hostages in Tehran. At that time, energy stocks were very strong. I bought some drilling and oil stocks, learned about options (I thought I learned....expensive lesson), and the rest is history. I lucked out and did not get involved in the gold and silver contracts at that time. Fortunes were made and lost overnight. But that was a rigged game and hopefully led to some internal market controls in the commodities side of the markets.
I know 23 years seems like a long time, and it is. But not long enough to have experience a market like this. The real difference is that there seem not to be any truly strong sectors.
Conventional wisdom seems to have gone by the wayside now. Maybe this time really is different (sound familiar?). Gold stocks? Very high end and very low end retailers? Tobacco? Non durables? The obvious candidates are now just as likely to be the next to have exposure to "accounting irregularities" and other onerous mismanagement as any other stock in any other sector.
Unless I am mistaken, in every other bear market (at least since Reconstruction), there was no significant period of time that money could not be made on the long side. It was just a matter of moving money into the right sectors. This time, however, it seems there really is no place to hide.
Defense stocks (not defensive stocks) have shown some relative strength, but not across the board. And what industry is more likely to have financial skeletons in their closets? Home builders certainly seem to be risky for all the aforementioned reasons plus a not unlikely turn in their own perhaps overheated sector.
So no, I cannot shed any great enlightenment that would add to what has been said in this thread already.
Not to be presumptuous, but I would guess that Don would say to just trade what the market gives you. Realize we are in a downtrend. Trade with a downward bias. Short more, buy when you expect a bounce, be on both sides. Nothing goes up or down in a straight line. As daytraders, we need to be quick and play the small moves. There are many many bounces in which money can be made on the long side. Just as during the great bull run of the late 90's there were always opportunities for money to be made on the short side. Timing is just more critical.
We certainly have volatility, and that can be our greatest natural resource as traders. Unless the market goes to virtually zero, or volatility and volume disappear, we have plenty of opportunity. (And there is not yet any indication that any of these things are really about to happen).
PS....I am NOT old enough to know what a Depression would be like!!!!!! (yet I am hopeful I will never have to learn).
