Daytrading profit potential

Originally posted by ertrader

All in all, if you traded during the lotto of 99/00 you did very well if you had size....however, if you continued to trade that size in the latter part of 01 to current.....Occhhhh.
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I don't understand where size fits into the equation.
Look at the daily ranges back in 99/00, hell, even early 01. 5-10 point moves were commonplace among the higher priced stocks. Why would you have done very well if you "had size" back then, but not in 01-current??
To make the same total dollar profit on a trade in 00 as in 02, you didn't need as much size as you do now. When stocks moved one point as a matter of fact - noise, if you like - you'd only need 100 shares to make $100. If you equate a ten cent move today with a dollar move back then (not at all an unfair assumption) you need a thousand shares to make the same $100 profit.
Sure, if you had a "lotto", long only mentality back in 99 and traded big size you, of course, would have enjoyed huge profits. That's just elementary position sizing.
 
No its not so elementary....infact if you have a trader trading 12 million or even 7 million in buying power.....vrs a trader trading 500 thousand or 2 million in 99/00...... The trader trading well with 12 million will make a hell of a lot more than that trader who trades 2 million well.......


Plan and simple 4 is greater than 2. unless you think 2 is as great/or equal to 4 in some parallal univers.


And those traders who traded size in 99/00 and got caught on the wrong end, the volitility was there to make back big losses.

in 01 to 02 the volitility is not as great in fact at near lows of the past decade, thus....if you got killed in these enviroment, it would take you a lot longer to make back you losses.....

That is not so elementary......lol, of course this is based on swing traders who traded more than 20 positions at a time, as well as carrying size overnight with a trend and follow through in the morning with that same trend, back in99/00
 
Originally posted by ertrader


All in all, if you traded during the lotto of 99/00 you did very well if you had size....however, if you continued to trade that size in the latter part of 01 to current.....Occhhhh.
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Your contention was that you could have done "very well" in 99/00 if you "had size".
I think it should be obvious that what "very well" means is related to the size of your account, or "buying power" if you like. So making 1mil isn't that big of a deal if you had 500k, but it was if you had 50k.
I can't imagine anyone thinking that 50k (and its associated buying power) is "having size". Yet, you could have still done very well in 99/00. So, I think we can throw out the requirement that you needed size to do very well back then.

Then you contend that if you continued to trade the same size in 01-current, you were in big trouble. (I'm assuming "Occhhhh" means "not good".)

Why?

I would say that "if you continued using the same strategies that once made you money 99/00, but no longer do in 01-current....Occhhh".
 
Im am not stating "i" because "i' did very well in99/mid 01 and in late 01/02 in did ok....


However, many at my firm did continue to trade the market in 01/02 like it was a trending bull and they did not cut back in size until it was forced by the firms RATS. (Risk Anaylst Tech.Assistents)

The firm will remain nameless due to the fact that I am no longer with them.
 
Originally posted by ertrader
Im am not stating "i" because "i' did very well in99/mid 01 and in late 01/02 in did ok....


However, many at my firm did continue to trade the market in 01/02 like it was a trending bull and they did not cut back in size until it was forced by the firms RATS. (Risk Anaylst Tech.Assistents)

The firm will remain nameless due to the fact that I am no longer with them.
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I wasn't talking about _YOU_. I already understood that you were talking about the "big guns" at your previous firm. (Don't worry, I'm not at all interested in the name of it.)

Do you mean to say that you can't trade the same size in a trending BEAR market as you can in a bull? (Of course, the answer is YES, you most certainly can, and, if you are any good, probably should!) Why did the firm consider it such a bad idea?
I can't imagine they thought the positions were riskier in a bear than a bull. (Although they very well may have.) If anything, I would've thought the risk was smaller, given the contracting volatility over that time period.
 
Although intraday volatility has contracted quite a bit, i.e. not many stocks quadrupling in a month like early 2000, INTER DAY (daytrading!) vols are about the same. In other words a 1 dollar range on a ten dollar stock is analogous to those 20 dollar ranges that JNPR used to have at $200. Given that one's buying power is directly correlated to the price of the underlying, this environment is no more or less difficult then two years ago. Yes trading ten times bigger costs more, and liquidity is a concern, but plenty of opportunity abounds.
 
Originally posted by Pabst
Although intraday volatility has contracted quite a bit, i.e. not many stocks quadrupling in a month like early 2000, INTER DAY (daytrading!) vols are about the same.
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I think you've got it the wrong way around. "Inter" means "between. So interday, means "between days", or, in other words, from day to day.
"Intra" means "within". So intraday would be "within the day". Daytraders, of course, are more concerned with intraday ranges.

The "intraday" range, the high-low of the day, is a LOT smaller today than it was just one year ago, let alone in 00. Don't take my word for it, check it out on a chart yourself.
 
Re: more jesse livermore

Originally posted by dotslashfuture
"The desire for constant action irrespective of underlying conditions is responsible for many losses on Wall Street even among the professionals, who feel that they must take home some money every day, as though they were working for regualr wages." -- Jesse Livermore

All you customers out there who think you are working a "job" should read that several times.
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posted by chasinfla
That is worth taping to the monitor.
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Why? So I can I remind myself of the futility of what I do while I am doing it?

Interesting that someone with a disposition against day trading should care so much about clearing costs and commissions. Is the 1/8 of a cent you hope to save on commissions going to make THAT much of a difference to your swing trading/intermediate term/stock portfolio?
 
There simply weren't the number of opportunities for a trader in his day like there are now. Placing trades every day probably wasn't a good idea because you'd really be pressing it to find good set ups every day. There were only so many stocks, you could only watch so many tapes, it would take forever to draw charts by hand for historical reference, etc.

But now it's different. With computers scanning thousands of stocks per second, arbitrage, and different instruments to trade, a trader can always find something to trade, unless he's a one trick pony with a narrow focus. Of course it's easier to churn and burn too, but I find viable set ups every single day.

And this is my "job" not a gamble or a hobby.






"But now it's different." Lol...sorry, but I just had to laugh...
 
Dan; Thanks for the correction on Intra vs. Inter. What I'm saying though is that the PERCENTAGE moves are the same now as always. Merely looking at a chart only gives you the true range. In fact the lower the market goes the GREATER the PERCENTAGE moves are likely to be. In the 1930's many of the biggest pct. moves occurred, both up and down. It's easier for a $2 stock to go to $3 than a $20 stock to move to $30.
 
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