Do daytraders profit everyday? Or are they like me: one huge win one day, 10 losses in a row after?

[qxr1011]

certain probabilities (very often intuitive)

if we talking about math (positive expectations) those probabilities are not there

if we talking about intuition then its not math but psychology...

but then one better learn how to pray, and pray often because now we talking about hope ...

nothing wrong with hope , one just have to be clear what he is talking about and what one's expectations are based upon

 

[snowman80]

we all hope or assume that in the future markets we swim in will behave like or resemble the markets we ‘know’

math, intuition, praying, rabbit’s foot are tools used to develop some degree of confidence about how future may unfold

i think math based empirical research offers best results

 

[Ayn Rand]

There is a lot of wisdom in the responds to this thread. I did not read everyone one but I liked cartmm and jinxu.

Secret - Here is something that is not mentioned enough. Trading is very solidary and boring. Usually most of the action happens over a 10-30 min interval. Also to tell other about what you are doing is - just do not do it. You do not really know and they will not understand.

Secret - You do not need to be at the screen 24x7 to win.

When you can walk away and do other things then this is the first step towards freedom.

 

[wrbtrader]

...

Secret - Here is something that is not mentioned enough. Trading is very solidary and boring. Usually most of the action happens over a 10-30 min interval. Also to tell other about what you are doing is - just do not do it. You do not really know and they will not understand.

Secret - You do not need to be at the screen 24x7 to win.

When you can walk away and do other things then this is the first step towards freedom.

Many others and I completely agree with these views you've mentioned.

Yet, I think when traders do talk about how they're trading...they're intentionally vague or they leave out a lot of critical variables...they really aren't revealing any secrets. There's some aspects of trading that must be learned by yourself via trial n error.

For example, many years I've seen popular members share their trade strategy (general info) but they don't mention a criticals element in their trading like "money managment" or "risk management". Another example, a successful scalper talks about how he uses order flow in his DOM but he/she just vague about it...no meat in the burger.

Thus, I think being vague is intentional.

Yeah, I never really understood why some think they need to be at the computer screen every second of the trading day. They should know why their trading instruments tend to be the most active...this is when that lone boring trading job allows you to do other things during the trading day that another job wouldn't allow you to do.

Trading should be part of your life...it should never be "your life". This will minimize putting yourself in the position that trading can ruin your life when things go wrong. Also, it will minimize burn out.

wrbtrader

 

[cartmm]

If you are wrong 90% of the time in your trades, you will never make money...

Not necessarily, depends on how you trade. Like I tried to explain in my example of shorting stocks with the hope of a massive fall at some point. How should Trader X do that? Should he first wait for the sell-off to establish itself and jump on the trend (but miss the first juicy -20-30% drop), or should he try an anticipate it (but risk getting stopped-out each time for a few -2-3% losses). If he follows the latter way, maybe capturing that first big drop pays for all the false starts he endures by being too early. Although if his psychology doesn’t agree with long strings of small losses, maybe the first approach suits him better.

...as the 90% rate indicates you have no clue about trading.

I am aware that a 10% win rate is a less common approach, but that doesn’t mean the trader has no clue. I know of a guy trading FX who uses a similar approach. He doesn’t talk much about his strategy for several reasons including because it often runs against the beliefs of others. He looks for significant moves in major FX pairs and crosses, using a combination of technical and fundamental analysis. He is an ex-bank FX trader doing this privately now for many years and very successful. He knows that many of his entries will be wrong, so having good risk management with tight stops is vital for him. He has to have the stomach for 10 or more losses in a row and many traders don’t have this. But he knows that his next winner is coming, and it will erase all his earlier losses. I believe his worst run was 24 losses, followed by one trade that made it all back and much more.

Following your logic even a 1% win rate can be very good.

Ha ha. Yes, ok, the logic would say that a 1% win rate is also possible, but I too would agree that’s probably unrealistic. Maybe even 5% is a stretch. But I could imagine there are other traders out there with 10%- and 20%-win rate systems who are doing ok.

For me the end game is to have no losses at all.

If you’re targeting a 100% win rate how do you know that’s optimal, ie profit-maximizing? It may suit your psychology (never wanting to be wrong) and a search for perfection (always having the perfect entry), and it sounds comfortable, but is that enough for you? Maybe it is, I don’t know. But you could be depriving yourself of many profitable trades, right? If I want to maximize profits, in most cases I know I have to accept risk. This means lowering my win rate and accepting riskier trades with sub-perfect entry set-ups. I know some will be losers, but overall my net gains will be higher.

 

[Xela]

I could imagine there are other traders out there with 10%- and 20%-win rate systems who are doing ok.

10%? ... you honestly think that

I find it a real stretch to imagine that anyone who has losing runs of 60-70 trades, and losing patches which are financially equivalent in outcome to a losing run of 100+ trades is really "doing ok".

Maybe you hadn't quite appreciated that that will happen, often, with a 10% win-rate?

Statistics and probability are really counterintuitive subjects, and that reality underlies many of the figures apparently quite casually referred to/conjured-up in trading forums.

As mentioned above by several members, win-rates below about 30% are going to be a big problem, one way and another, to most traders, most of the time.

 

[CarlosRay]

The problem for most traders isn't the win rate - I've posted a chart on another thread showing that traders win more often than they lose, the problem is the size of their losses is much higher than their wins.

 

[jinxu]

There is a lot of wisdom in the responds to this thread. I did not read everyone one but I liked cartmm and jinxu.

Secret - Here is something that is not mentioned enough. Trading is very solidary and boring. Usually most of the action happens over a 10-30 min interval. Also to tell other about what you are doing is - just do not do it. You do not really know and they will not understand.

Secret - You do not need to be at the screen 24x7 to win.

When you can walk away and do other things then this is the first step towards freedom.

The more people talk, the more confuse they get. It happens in larger groups. The confusion grows larger. Case history. It wasn't a large group of mathematician and scientist that figured out gravity and calculus. It was one person. And he lost about a million dollar in the stock market.

“I Can Calculate the Motions of the Planets, but I Cannot Calculate the Madness of Men”

 

[schweiz]

10%? ... you honestly think that

I find it a real stretch to imagine that anyone who has losing runs of 60-70 trades, and losing patches which are financially equivalent in outcome to a losing run of 100+ trades is really "doing ok".

Maybe you hadn't quite appreciated that that will happen, often, with a 10% win-rate?

Statistics and probability are really counterintuitive subjects, and that reality underlies many of the figures apparently quite casually referred to/conjured-up in trading forums.

As mentioned above by several members, win-rates below about 30% are going to be a big problem, one way and another, to most traders, most of the time.

If you have 70% losing trades that are stopped out, you need to make NET 233% of your stop to get break even. Which means that you still made no money.

So with a stop at 3 points ES you have to make 7 point NET (after slippage and commission) just to get break even. Zero profit.

 

[Brianharvey]

loads of youtube traders seem to make like at least 2k every single day without fail. But they also run chat rooms. I never know what to believe, lol
That must be an actual dream job if it's legit!