Yep, hindsight aficionados are a dime a dozen, this idiot claims he has a 90% win rate, yet he is totally unwilling to post a real time/advance trading call. Fact of the matter is that, no one in their right mind would share trades if they even had an 80% win rate, (without averaging down) let alone 90%.....
Daytrading R.I.P.
- Thread starter stock777
- Start date
Yep, hindsight aficionados are a dime a dozen, this idiot claims he has a 90% win rate, yet he is totally unwilling to post a real time/advance trading call. Fact of the matter is that, no one in their right mind would share trades if they even had an 80% win rate, (without averaging down) let alone 90%.....
you really got a hardon for the guy don't ya
You must be under the influence of something.
Assuming every add is the same size, otherwise you are martingaling and everyone knows that requires unlimited capital.
Check these #s:
1200 1200
1100 1150
1000 1100
900 1050
800 1000
700 950
600 900
500 850
1st column is your entry price
2nd column is your avg entry price after adding
Notice how price moves twice as fast as your average.
You need a LITTLE bit more than just a retrace to just break even when adding to a loser.
Can't believe the spit some people post on public forums.
No Heat
Pretty good article, that's the first I've seen that accurately covers most of what daytraders actually do. However, he did miss off the 3-4 profitable intraday strategies which are not dependent on structural or execution edge, but rather tape-reading and market feel (what he calls "technical analysis"). I.e. they require *actual trading talent*, as opposed to mouse clicking skills.
1. Divergence between related markets. He listed the obvious inefficiency (which doesn't work too well anymore), which is relative strength weakness i.e. the "leading indicator" approach. E.g. you watch the S&P, and by some minor index (e.g. SMI) when the S&p goes up, expecting the junior index to shortly follow. Obviously, computers have killed this edge for the most part (although it still exists in less liquid markets such as commodities). The more advanced version of this is to watch for when one of the related markets *doesn't* follow the leading indicator. For example, if the S&P goes up, the Nasdaq goes up, the Dow goes up, but the Russell stays flat and keeps running into huge offers and distribution, then the Russell is a short relative to the other indices. That's a clear edge and it's still there, because it's a tape-reading edge, not an order-book or correlation edge i.e. computers haven't yet been programmed to exploit it. In fact, with these type of divergence trades, *algos are your liquidity* because they assume the correlation will hold.
2. Divergence on news. I.e. good news, market reacts badly, this is a clear short. Buy the rumour, sell the news. Classic example was the Apple earnings release.
3. Fading intraday panic capitulations. This is a time honoured strategy that still works perfectly, arguably better than before. Capitulations aren't that common but if you scan 10,000 stocks, you will find some.
4. Trading momentum. This is just the intraday version of trading momentum on longer-term timeframes.
All these strategies work just as well as they ever have. The difference for daytrading is that 98% of daytraders can't actually *trade*, they can just execute exploitation of structural order-flow edge (e.g. scalping). So, these guys are getting replaced by the algos. The real traders aren't getting threatened at all.
What is disappearing is the ability to make 6-7 figures with minimal risk, 1-2% maximum drawdowns, 95%+ winning days, and minimal capital requirements, without having to have any actual trading skill. It was good while it lasted, but that era is over. Well, cry my a river. You can still make 50%+ per annum with single digit drawdowns as a daytrader, using the methods I showed above. Last time I checked, that was considerably more than any other strategy out there except HFT itself, which will eventually be competed away as an edge, or get legislated out of existence. Tape-reading will survive and thrive so long as there are markets and so long as human nature remains more emotional than rational/logical.
As opposed to all those other great ways to make a living? Lol. I'm quite happy having no boss, no employees, minimal regulation and taxes, being able to trade from a laptop or even an iPhone anywhere in the world, working 5 hours a day (2 1/2 hours on the open and close) and banking respectable coin.
The only problem is eventually running into scale & liquidity issues. But that's just another great reason to eventually transition into actual long-term speculating and investing, which is more intellectually stimulating by far.
Yeah - I love this implicit assumption that this is the first time the market has ever had a structural change. When the SEC was formed, that was the beginning of the end for stock pools and corners. When fixed commissions were deregulated, that was the beginning of the end for full-service stockbrokers. When online trading came along, that was the beginning of the end for floor traders. When decimals came along, that was the beginning of the end for SOES bandits. When ECNs came along, that was the beginning of the end for NYSE market-makers. When algos came along, that was the beginning of the end for scalpers.
Has anyone noticed that tape-readers, speculators, global macro traders, growth investors, and value investors have made money throughout that entire century of change? Some approaches just work, end of story. Find one and stick to it. Then you will just chuckle every time one fad comes to prominence, then fades away amidst a chorus of complaints and tears.
Each time one of those things happened, a bunch of unadaptable whining losers started bitching to high heaven about how the markets were no longer beatable. They made a bit of noise for a while, then went back to driving cabs or mowing lawns for a living, leaving the newer or more adaptable traders to up their game and get with the new era. No different this time, plus ca change...
So you are saying lescor will go back to becoming a fireman soon?
LOL