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Daytrading leads to Inevitable Failure? Is Swing Trading the only Viable Path?
- Thread starter heynow
- Start date
Quote from tradin4profits:
It seems 90% of the threads on ET are Negative. How does anyone on this site make money? Or do they? They all crow how 90% of traders lose I guess 90% of the posts on this site are pure BS! Or most likely 90% of these posters are losers..... ET is Just an extention of the Yahoo boards and actually more amusing.
Unless the so called gurus consistently post good results on the P/L journal assume crap.
That's my filter for ET.
Nexen
Quote from FortuneTeller:
And yet here you say you are a reverse momentum scalper. Interesting.
http://www.elitetrader.com/vb/showthread.php?s=&postid=2411511#post2411511
"05-03-09 01:03 AM
I'm a reverse momentum scalper. When I see an extreme move in one direction start to slow down I fade it. If I'm wrong, I get out asap. I usually make 150-200 RT a day."
YES, I TRADE THE MOMENTUM OF PULLBACKS. MOMENTUM CAN GO EITHER WAY.
Quote from Cutten:
Illiquid assets can be borrowed against, and illiquidity poses a far greater risk than going on tilt for a disciplined trader. Position limits can always be circumvented.
Even if somehow you avoid those possibilities, there's always suicide risk.
Basically you are trying to say you can legislate discipline and risk control, when that is clearly not the case. There are always risks which can't be totally avoided, and someone with no discipline will blow up in one way or another regardless of what controls are put in place - see the western financial and real estate sectors for an example.
But luckily illiquid assets can not be borrowed against in the heat of the moment.
Quote from heynow:
The reasons why I feel a daytrader is ultimately doomed for failure:
1 Limiting profits. The very nature of daytrading means that you are cutting your profit potential short by not holding for more than a day or a few hours. There are are moves that go on for days, weeks, and months with only the slightest pullbacks. These are the moves that make your year.
Your definition of "the very nature of daytrading means..." is ridiculous. A lot of your if/then statements don't establish any cause and effect.
A daytrader trades their timeframe. Moves that go on for days, weeks, and months aren't trades that a "daytrader" would be looking for, therefore they ARE NOT moves that would make a daytrader's year!
Your thought that "The more frequently you trade the more addicted you become to the action. Also the more frequently you trade the more compulsive your actions become." Are you kidding? Ridiculous. If you trade for the action, then by definition, you trade for the wrong reasons...no matter the timeframe you trade.
6 Great profit potential also means greater loss potential. Sure you can make 2x the daily range daytrading but more often you can lose 2x the daily range. Doesn't this ruin your entire argument to become a swing trader? Weren't you arguing for bigger profits in those bigger multi-day moves you touted at the beginning of your original post? As far as losing the same amount that you "can" make goes, in order for this to happen, you have to have no understanding of risk-to-reward. Judging by your 3 25k losers, this certainly applies to you since you can't get out of your hole. 600/day? Lol! How can you take 25k losers and only average 600/day?!?!
You have no idea what you're doing as a trader. If you switch to a longer timeframe, it will probably shorten your career even more than if you remain a daytrader because you'll manage to lose even more when you refuse to take your losers.
....
My plans for swing trading is to "scalp" but on a much longer timeframe and across many different positions so that I'm not impatiently trading noise. [/QUOTE]
"impatiently trading noise." Damn. You think that if you change timeframes your inability to patiently wait for the right time to enter a trade will change? Oh I get it. It's the timeframe's fault that you are so implusively impatient that you trade "noise". Seriously -- keep daytrading, you're probably helping me make money.
My plans for swing trading is to "scalp" but on a much longer timeframe and across many different positions so that I'm not impatiently trading noise. [/QUOTE]
"impatiently trading noise." Damn. You think that if you change timeframes your inability to patiently wait for the right time to enter a trade will change? Oh I get it. It's the timeframe's fault that you are so implusively impatient that you trade "noise". Seriously -- keep daytrading, you're probably helping me make money.
I haven't read the whole post, but here's my $0.02:
Comparing daytrading to longer-term trading is kind of futile. It's like comparing rugby and (american) football - you can see similarities, but the rules and required skills are very different. Sure, you'll get people who are good at both, but more often than not it pays to specialise.
As someone who does 300+ RTs a day, I can say that I know a great number of people who profit from daytrading. Basic theory tells us that the more times you exploit an edge, the more chance you have of coming out green in any given period of time; I know of someone who has not had a down day in his last 3 years as a daytrader. It's all about deciding which route you want to take and spending months, if not years, perfecting your craft.
Comparing daytrading to longer-term trading is kind of futile. It's like comparing rugby and (american) football - you can see similarities, but the rules and required skills are very different. Sure, you'll get people who are good at both, but more often than not it pays to specialise.
As someone who does 300+ RTs a day, I can say that I know a great number of people who profit from daytrading. Basic theory tells us that the more times you exploit an edge, the more chance you have of coming out green in any given period of time; I know of someone who has not had a down day in his last 3 years as a daytrader. It's all about deciding which route you want to take and spending months, if not years, perfecting your craft.
You'll find that most people who lose money daytrading do it through fear or lack of discipline. I scalp my markets but I'll also trade for 50 ticks or more; it all depends on what I see happening in front of me. Most people will probably blow up rather than fade out slowly - you can put together a string of 5 1-tick winners on a 3-lot, but then you get 3 ticks offside in the next trade, decide to throw another 3 lots at it, it moves against you again and within seconds you've lost 3 times what you gained in the last 5 trades.
Being a winning daytrader imo is less about being an economic expert and more about being able to eliminate scenarios such as the one above. This is why 90% of people lose; it's not that trading is intellectually difficult, most people just lack the emotional discipline to always act in their best interests.
Being a winning daytrader imo is less about being an economic expert and more about being able to eliminate scenarios such as the one above. This is why 90% of people lose; it's not that trading is intellectually difficult, most people just lack the emotional discipline to always act in their best interests.
The OP has not been sighted since 3-30-09....:eek:
Quote from sell_the_news:
Granted you want to cut your losers quick and let your winners run. It's all in the numbers. No trader is right all the time, but the key is to keep the losses small. [/B]
The above is always touted but is always difficult in practice.
I am not talking about stop losses. While I think it is most important to focus first on not losing principal. The biggest challenge is squeezing all the juice you can out of a trade or investment on the upside.
The worst thing ironically which many can attest to is taking profits too early and hating yourself for it. Psychologically that can be worse than simply losing on a trade.