EricP, Lescor, Patrickq, Dustin and gang..

[newbie2006]

Quote from EricP:

Certainly, the price of the stock makes a big difference. It is much easier to average 3 cents per share while trading a $600 stock, rather than a $10 stock. For what it's worth, historically I think the average stock price of the stocks that I have traded have been around $40 (in case that puts my thoughts into better perspective).

Also, for what it's worth, I'm referring to 3 cents <b>per share traded</b>, so 6 cents per round turn trade. For example, you buy 200 shares at $20, and sell those 200 shares at $20.06 => You have made a gross profit of $12.00 and have traded a total of 400 shares, or 3 cents per share traded. Obviously, commissions and various fees (SEC, ECN, etc) will lower this a bit further.

The time duration of a trade certainly comes into play, as well. The longer the trade duration, the larger the average profit of a good trading method could be expected to be. For the numbers I quoted, I was assuming the person was a daytrader.

Now, I will still contend that anyone averaging 3 cents per share or more (6 cents between buy and sell price) in their daytrading is a rock star in my book. I don't care if that trader is doing 200 shares per day, or 2 million shares per day, that is a very good per share average profit. Certainly, the guy doing 200 shares per day will have days when he/she has profits of 50 cents per share or more, but will also have days when his average trade is a loss of 50 cents or more per share. What matters is the average over a decent enough number of trades to be meaningful.

If a guy can do those sort of numbers manually, then he ought to find a way to automate his trading to allow more trades to help diversify his trading and multiply his profits. Obviously, this would need to be within the context of good risk control. Any way you look at it, 1 to 3 cents per share traded are good number in my book.

I totally agree with you that anything from 1 to 3 cents or more are very good numbers

what I want to say is that once you go up to trading something like 2 M shares per day per stock then 2 cents per share in a stock that have a price of around $20 and trades 20M shares per day is just very difficult to achieve, and in such situation if you can just achieve 1 cent per share then you are a super hero

but in general I think we are in agreement

btw, how is your trading in 2013 so far ?

 

[EricP]

Quote from caementarius:

EricP - Regarding automation: do you have any suggestions for back testing or scanning technologies that are appropriate?

I really don't. My stuff is all custom programmed, so I can backtest and live test on the same platform, including recording and analyzing desired statistics as needed. I'm not familiar with what is available "off the shelf". Years ago, I know that TradeStation had an option (I suspect they still do, but don't really know). The trouble with a solution such as that is that they charged pretty outrageous commission rates which made profitable trading much more difficult, IMO. Ideally, you find a way to implement an automated system, while at the same time being able to trade with the absolute lowest commission rates.

 

[EricP]

Quote from newbie2006:

I totally agree with you that anything from 1 to 3 cents or more are very good numbers

what I want to say is that once you go up to trading something like 2 M shares per day per stock then 2 cents per share in a stock that have a price of around $20 and trades 20M shares per day is just very difficult to achieve, and in such situation if you can just achieve 1 cent per share then you are a super hero

but in general I think we are in agreement

btw, how is your trading in 2013 so far ?

My assumption was that if you are trading 2M shares per day, that they would be spread over many stocks. I can't imagine trading 2M shares per day in a single stock and averaging anything close to two cents per share, at least not without an extremely volatile and extreme active trading environment.

For me, trading in 2013 is slightly improved from 2012, but still poor by the standards I set for myself. The trading glory days of 2007 to 2009 are sadly behind us for now, and as a result, the opportunities for profit are not as plentiful. This is not to say that trading is impossible in these markets, but I know of no consistently profitable traders that are doing better today than they did over those years.

 

[newbie2006]

Quote from EricP:

My assumption was that if you are trading 2M shares per day, that they would be spread over many stocks. I can't imagine trading 2M shares per day in a single stock and averaging anything close to two cents per share, at least not without an extremely volatile and extreme active trading environment.

For me, trading in 2013 is slightly improved from 2012, but still poor by the standards I set for myself. The trading glory days of 2007 to 2009 are sadly behind us for now, and as a result, the opportunities for profit are not as plentiful. This is not to say that trading is impossible in these markets, but I know of no consistently profitable traders that are doing better today than they did over those years.

Well for me I actually missed out those good days as I was still learning and building my system, might be a good point in my favour that I started live trading in tough markets !

Anyway thanks for your reply

 

[relocate]

Quote from EricP:

My assumption was that if you are trading 2M shares per day, that they would be spread over many stocks. I can't imagine trading 2M shares per day in a single stock and averaging anything close to two cents per share, at least not without an extremely volatile and extreme active trading environment.

For me, trading in 2013 is slightly improved from 2012, but still poor by the standards I set for myself. The trading glory days of 2007 to 2009 are sadly behind us for now, and as a result, the opportunities for profit are not as plentiful. This is not to say that trading is impossible in these markets, but I know of no consistently profitable traders that are doing better today than they did over those years.

Trading environment nowadays is pretty the same as it was in 2007/09.I don't see any big difference.

 

[Swan Noir]

Where did you relocate from -- another galaxy?

Quote from relocate:

Trading environment nowadays is pretty the same as it was in 2007/09.I don't see any big difference.

 

[justrading]

Quote from Swan Noir:

Where did you relocate from -- another galaxy?

We come in peace. Take me to your leader.

 

[trade4you_brazi]

OP, maybe you don't want to hear it, but if you can't trade profitably, I'd recommend you do something else. It's not a coin flip...

My situation is similar to the profitable futures trader. I was really good at blowing accounts. But I was very persistent. Nowadays, if I didn't have consistent profits from trading, I would be in the poor house and SOOL.

 

[NorthernLimit]

Quote from ChkitOut:

Please tell me how to become an equity trader.

I spent a ton of time on futures, failed miserably. Actually it wasn't all that dramatic. Just coin flip trading at best. I've been had by a guru. Yes, I've learned about patterns, patterns that have a minuscule edge at best only to be wiped away with trading costs and the occasional mistake.

Whats the proper road? Start me on the right road.

I sense a lot of pain in your post. Trading is trading whether it's futures or equities. I notice that you have been publishing a lot of posts all the way back to 2008. 5 years is a long time to be losing money; maybe trading isn't for you. Everybody wants to trade, but not everybody can be a trader. Good trading can be boring sitting in front of a computer all day, especially if you are the creative or social type. Why not consider a job in the industry but less frustrating like a research analyst role, or a sales role where you are interacting with people instead of a computer?

 

[bwolinsky]

ChkitOut:

Portfolio simmed any?

Necessary, but it sounds as if you're looking in the wrong r/r's with much too low a risk per trade expecting $100 expectancy... this isn't how it works, especially, hft.