Giving up on day trading?

Trading should be boring not exciting. If you are excited or even fearful about taking a trade then you are on the wrong path. You need a plan that you have verified and put it in to action. If you started a new business would you just guess at what works or take a proven model that works and follow it to a T?
 
I agree. A key concept here is "verified." For me, it took two years of testing and keeping meticulous statistics until I identified my first profitable setup. Just one. That setup gave me relatively few trades, but they were consistently profitable trades. Over a period of 18 years I've added 8 other statistically verified setups. Good trading is tedious, requires meticulous attention to detail... and is boring as hell.


Quote from blox87:

Trading should be boring not exciting. If you are excited or even fearful about taking a trade then you are on the wrong path. You need a plan that you have verified and put it in to action. If you started a new business would you just guess at what works or take a proven model that works and follow it to a T?
More...
 
http://www.terrapinn.com/2010/hftusa/
Evaluate the market impact of high frequency trading and harness its potential by attending North America's premier HFT conference
Join the leading hedge funds, proprietary traders, asset managers, brokers, exchanges, technology providers and institutional investors as they explore the opportunities and challenges ahead for HFTEvaluate the market impact of high frequency trading and harness its potential by attending North America's premier HFT conference
Join the leading hedge funds, proprietary traders, asset managers, brokers, exchanges, technology providers and institutional investors as they explore the opportunities and challenges ahead for HFT


http://www.terrapinn.com/2010/hfteurope/
The High Frequency Trading World Conference is the premier European forum for fund managers, algorithmic traders, brokers and exchanges
 
Quote from drcha:

Well, I don't know if you want to hear from me. I am not an experienced day trader. In fact, I have never really tried day trading. I have read a lot about it, and from my reading and backtesting, I have never seen any clear way to make money at it. I am NOT saying that it cannot be done--just that from my studies, I don't see how to do it.

But, have you ever considered becoming a 'week trader' or a 'month trader'? In my opinion, it is vastly easier to make money this way. There are many momentum and trend following techniques that work well over longer time frames. Probably also some swing trading techniques that work well, if that suits your style better. You will not become rich overnight, but perhaps that is okay. Do you think it could be in your nature to try to be a tortoise rather than a hare?
More...

+1
 
Quote from Badeco:

Hello traders,

I've been day trading full time for over 3 years now.
At this point in time I have experimented with multiple different models and strategies.

I've experimented with manual, semi-automated and fully automated trading systems for entering and exiting positions. I've traded stocks, options and futures and used different time frames for analysis.

I have to admit though that after over 3 years trying very hard, I am still unable to consistently win the day trading game. A system can work in some occasions but then in exactly the same setup it will fail and give back the gains. All in all, over time I've found it very difficult to generate revenues that would cover commissions and other costs and still generate profits.

From my first days trading I never thought that trading would be an easy adventure, I knew that it would take a lot of losses, stress, humility and patience. But after over 3 years full time I would have expected that I would have "graduated" on trading and would be able to generate consistent profits, but that is not yet the case...

I would appreciate hearing from experienced traders, in particular those that have been on this business for a longer period of time and I know they aren't many, whether it has been for them such a hardship to succeed in trading or maybe it is simply that you can not really consistently win the trading game?

Thanks for your comments.
More...



Why did you post in the graveyard, Sir?
 
Quote from Badeco:

Hello traders,

I've been day trading full time for over 3 years now.
At this point in time I have experimented with multiple different models and strategies.

I've experimented with manual, semi-automated and fully automated trading systems for entering and exiting positions. I've traded stocks, options and futures and used different time frames for analysis.

I have to admit though that after over 3 years trying very hard, I am still unable to consistently win the day trading game. A system can work in some occasions but then in exactly the same setup it will fail and give back the gains. All in all, over time I've found it very difficult to generate revenues that would cover commissions and other costs and still generate profits.

From my first days trading I never thought that trading would be an easy adventure, I knew that it would take a lot of losses, stress, humility and patience. But after over 3 years full time I would have expected that I would have "graduated" on trading and would be able to generate consistent profits, but that is not yet the case...

I would appreciate hearing from experienced traders, in particular those that have been on this business for a longer period of time and I know they aren't many, whether it has been for them such a hardship to succeed in trading or maybe it is simply that you can not really consistently win the trading game?

Thanks for your comments.
More...





A man in a hot air balloon realised he was lost. He reduced his altitude and saw a man below.
"Excuse me, but can you help me? I promised a friend I would meet him an hour ago but I don't know where I am," he said.

The man below replied: "You are in a hot air balloon hovering approximately 30 ft above the ground.
You are between 40 and 41 degrees North latitude and between 56 and 57 degrees West longitude."

To which the balloonist replied: "You must be a broker." To which the man on the ground said:
"I am, but how did you know?"

The reply came from above: "Everything you told me is technically correct but I have no idea what to make of your
information, and the fact is I'm still lost. Frankly, you've not been much help so far."

The man below responded: "You must be a trader." To which the balloonist replied: "Yes, I am, but how did you know?"

To which the man on the ground said: "You don't know where you are or where you are going. You have risen to your current position due to a large quantity of hot air. You made a promise which you have no idea how to keep and you expect me to solve your problem. The fact is, you are in exactly the same position you were in
before we met, but now, somehow, it's my fault."
 
Here is a recent post from another thread that I think is very well-written and largely (although not verbatim) agree with:

Quote from Ghost of Cutten:

The impact I've noticed in futures is not as much as seems to be the case in stocks, but it's enough that the "free money" from scalping is rapidly diminishing. Even if you can out-trade algos, competition from them reduces your execution edge. There is still the riskier money from trading intraday trends and reversals, but that is a lower quality (although more scalable) income stream.

Bottom line - you no longer have a free income boost per annum from picking off stale orders or sitting 1 tick inside the bid & offer. Now your income is *solely* your directional plays. That makes daytrading riskier and less profitable than it used to be.

Having said that, I'm having a decent year with my daytrading, just not as lucrative as before. There's a clear downward trend in the scalping opportunities out there. If you are an experienced trader with sufficient capital, it's probably now more profitable to focus 100% on speculating and investing. And you just improve each year at that, whereas as a daytrader you can't really get any better after say 3-4 years experience. Overnight stuff is easier to monitor, more interesting, and more scalable.

Given that the typical new daytrader does not have the skills or experience to make directional plays profitably, it will be much harder to enter. It normally takes 6-12 months to get decent at directional intraday trading. In the past, you could earn money for those first 1-2 years via scalping, and then directional punts would move up to become 50-70% of your earnings as you gained experience. Now, new traders faced 1-2 years of bleeding instead of steady profits before they pick it up. Most won't have the $$$ or will to survive that long.

Overall I would not recommend anyone go into daytrading now. Learn to invest or learn to position trade instead, those are immune to competition due to recurring flaws in human nature. Unfortunately for the lone wolf trader, it is virtually impossible to invest or speculate by yourself if you are small fry. Even the best can't do much with 10k, whereas in the past 10k was enough to make 1 mill+ in a few years as a good daytrader. So, you need to get into a trading firm nowadays as a noob IMO. That may be irritating, and more difficult to get into, but ultimately it's a faster learning curve to have mentors and colleagues than to go it solo.

Let's face it, scalping was like floor-trading, a profession with a structural edge that paid way more than the skills required to do it were truly worth. It was a perfect candidate for automation. It's not really "true" trading, more like a profitable video game. Overall I don't think I'll be shedding any tears for its slow demise.
More...
 
Hi Badeco, interesting first post. Haven't read this thread in it's entirety so forgive my impatience. That said, and forgive the irony, 3 years is nothing in this game. I have blown 3 accts, worked some horrible jobs to get a stake. This profession has helped me grow as a person but I had to grow first!? "They" say you can't beat the markets, experience tells you when you can take a cheap shot.
 
Quote from Badeco:


From my first days trading I never thought that trading would be an easy adventure, I knew that it would take a lot of losses, stress, humility and patience. But after over 3 years full time I would have expected that I would have "graduated" on trading and would be able to generate consistent profits, but that is not yet the case...

I would appreciate hearing from experienced traders, in particular those that have been on this business for a longer period of time and I know they aren't many, whether it has been for them such a hardship to succeed in trading or maybe it is simply that you can not really consistently win the trading game?

Thanks for your comments.
More...

I have been at the "game" for thirty years, last 23 years day trading, only thing that has changed is ease of getting in and out, charting, average age has gotten much lower of trader, margins much lower. But the barcharts have not changed, one might say the ranges have gotten larger, but bar charts make same patterns. I have wheat charts going back to 1920's, they make same patterns as yesterday.

People lose for a host of reasons, usually poor discipline, but most often their inability to backtest over mountains of data. And for those who can't code, your testing have to be well defined. Too many have this "need" to either be right or make a boatload of money. Those of us who have put in the years, concentrate on totally different designs of methods to trade. I don't seek methods that will give the most profits, I don't seek more signals.
We grow up hearing "More, More, More", but in day trading, having to pay commisions, it really is "Less, Less, Less".

People make methods that are often too hard and too many. Find one method for entry, then the important aspect of trading are the 30 plus rules on how to manage the trade after you are in. And some of those rules are when to bypass your signal. I get some signals to enter but cause of the volitility is too great, I pass on them.

Too many try to make the losing trades either become winners or a way where the signal does not come up at all. I learn so little from losing trades, I study why the winners were profitable.

Too many have an all or nothing approach, either make or lose, how bout the "tie", find all the ways a trade can become a tie. Most of my profitable trades become this way very fast, they don't "hang" around. Did you do testing to discover how long till your trade hit a target? Did you test how long before it became a loss? So if after so many minutes of doing nothing but drifting, why not try to get out at breakeven? At what point can you bring your protective stop up to breakeven? Do you have rules on how to trail your stops, where are your targets?

Vendors, Trading schools, chat rooms, if you are going to PAY these people, ask them for brokerage statments, if you pay them without brokerage statements-like jumping out of a plane wondering if there is a parachute or dirty underwear on your back.
 
You must log in or register to reply here.
Back
Top