Daytrading profit potential
- Thread starter LelandC
- Start date
If I were you I'd shoot for having a net positive week and forget about whether a day is up or down by what percent as long as any one day doesn't exceed your maximum one day loss. Setting a goal like the one above forces you to walk a psychological tightwire. As I have taken a longer-term view my results have improved and my stress level has come down. I still don't like having losing days but I don't let it wreck my week/month/year.
So true Brandon. You never know how much you can make until you start trading. You never know how long it will take you to make it in trading until you start. You never know the amount of work and the number of obstacles you will have to go through until you start trading. It is nice for some to calculate if they only make x per day how that will add up as they increase their size. However, it doesn't alway follow the estimates because these estimates often lowball the impact of losses whether from hope or lack of experience. It takes time and effort to become the Michael Jordan of trading and even then there is only one Michael Jordan.
If you don't hold overnight positions, I think your maximum profit potential is at around $3M. I say this only because I have seen the numbers for top traders at my firm and the highest was at about $2.5M. Leverage is not a problem.... and I think they are about maxed out at what they do. Each of them use different methodolgy and if they can somehow add to their trading methods, they should be able to add to their bottom line....another $500,000 maybe.
I have heard that some traders at Schony made over $10M in some years...but not lately. I am willing to bet that (1) they hold overnights and the trades worked in their favor for a few points - which is hard to do on intrad day basis - and (2) they knew something that the rest of us don't... perhaps order flow info, perhaps allocations for IPO's when they were hot, perhaps contact on the floor with a broker....whatever.
I do know that the top guy at PTJP made $12M for himself (after the payout %) 2 years ago. But he was not a day trader...he had contacts at the big brokerages...totally different game.
I have heard that some traders at Schony made over $10M in some years...but not lately. I am willing to bet that (1) they hold overnights and the trades worked in their favor for a few points - which is hard to do on intrad day basis - and (2) they knew something that the rest of us don't... perhaps order flow info, perhaps allocations for IPO's when they were hot, perhaps contact on the floor with a broker....whatever.
I do know that the top guy at PTJP made $12M for himself (after the payout %) 2 years ago. But he was not a day trader...he had contacts at the big brokerages...totally different game.
I think most traders have huge unrealistic expectations about trading because it is "theoretically" possible to make a zillion dollars. People are going into the market with $10,000 capital and talking about making only $1,000,000 a year, LOL.
I believe that most traders blowup because of the failure to take that "stop" and the second reason is "overtrading". I would advise learning one stock very well and trade only that stock.
There is a stock that has had a cumulative $17.25 in intra day moves both long and short in May alone!! Stock trades an average of $20M daily and is very well known to all of you. If a trader would only trade 1000 shares that is a nice piece of change for the month. Very few commissions and very little stress. It moves very slow and predictable.
I would make the argument a trader could execute 1 or 2 trades a day. Make a few bucks and exit with the profit in hand. Don't give it back by constantly seeking the 'action".
I believe that most traders blowup because of the failure to take that "stop" and the second reason is "overtrading". I would advise learning one stock very well and trade only that stock.
There is a stock that has had a cumulative $17.25 in intra day moves both long and short in May alone!! Stock trades an average of $20M daily and is very well known to all of you. If a trader would only trade 1000 shares that is a nice piece of change for the month. Very few commissions and very little stress. It moves very slow and predictable.
I would make the argument a trader could execute 1 or 2 trades a day. Make a few bucks and exit with the profit in hand. Don't give it back by constantly seeking the 'action".
Originally posted by toad57
Well, I sorta botched that entry- I want to achieve an AVERAGE of 1% of my account per day... I realize there will be good + bad days.
No, this isn't John Belushi in Samuri Trader
Mr. Toad
Yes it is a different view to look at averages and the long run versus the day to day or trade to trade fluctuations. I find that the less I look at how my trades for the day have done, how much I'm up / down, the better I am able to focus on what is happening now and what is setting up and what action I should take.
I have seen this style being talked about a lot lately here on elite as well as another site. While I think getting to know one stock and trading that stock may be helpful I really don't feel that is the way to riches. What happens when the market is really ripping (or tanking) and your stock is just sitting there doing nothing? Do you keep trading it over and over churning on commissions? Or can you sit on your hands and do nothing while the market leaves you in the dust?
I'm not saying this method is right or wrong just making a few observations. Maybe if you can trade like 25K shares of this one stock for 1/2's all day that wouldn't be too bad (LOL)
I'm not saying this method is right or wrong just making a few observations. Maybe if you can trade like 25K shares of this one stock for 1/2's all day that wouldn't be too bad (LOL)