Grim future for day trading as a career

[marketsurfer]

I think most dance around the real reasons most can't make it in day trading, it is called management. You have to have a business mind to do well. You either only know how to work for others, which we need to get products made and there are those who have needs to lead. If anyone was to open a factory to do recaps on car tires for instance and know nothing about the business. You might take a few years of researching how to make this factory, there is equipment, materials, building, electric, workers, EPA, etc....and just cause you have ten million to do so, you can't read a book and start pumping out tires on Monday, and yet I see over and over guys with $2500 opening an account and going to compete with those who breathe how ES moves. You meet guys who have spent thirty years at trying to "beat the market" and they have not realized it is not beating the market but learning about themselves on their short comings of emotions that is keeping them from keeping rules.

I have guys come to me with $100k to start learning from me, and usually always the same, they think they need a lot of money and no, you won't be trading unless you can prove to yourself you can be profitable 18 or 20 days, and to take the $95,000 and take it out of the account for real estate rental houses, or other small business start up. People who know how to manage people start businesses cause they want people to not run out of doing work. But day trading students think doing some paper trading will be enough and it is not. Hardly any questions from looking at a chart to find signals, it is fine for understanding what to look, but management after you in a trade is where the money comes.

Too many are lazy, they don't want to learn how to code, back test 3,000 sample size min.. Have good rules when not to take trades even when there is a signal, so this comes down to knowing price action, you have to know what are chances of price going to hold or keep going and what to do when it not working out, protective stops should not be hit all the time, too many see clear cut signs of price structure changing and go into "hope" mode instead of taking smaller loss.

There is a great deal of study to become good at day trading, years. But the big money is still in long term trading or shorter term options. Especially retail, fees will eat you away in day trading. And why breakeven for me is plus one tick. Nothing is going to change, traders think highly of themselves but have not worked on self. Then there is screen time, no lie, I have over 80,000 hours in my life time, many days of working and trading 18 hour days/nights, you lose track of time, days, years, you think you doing to make money, but at some point money is secondary or almost worthless, it is becoming one with self, like Zen. To be able to do what most have not learn to accept.

I still have plenty of life to live, more mountains to conquer, trading has allowed me to go any direction in life, in few years I be buying a farm, trading 75 minutes in morning and hopping on a tractor and getting me one of those John Deere caps.

Those are all excellent points. thanks and good luck on the farm! I come from a long line of agricultural folks that ended with my grandfather---- now the dormant land has paid once again via nat gas leasing-----

 

[Frederick Foresight]

This talk of taxes on HFT trades is so lame. All the exchanges need to do is start charging for "excessive" cancels. That will curtail HFT significantly.
But here we go again with the definitions: what is excessive ?

I agree that exchanges should take some meaningful action. And unless you, yourself, are on the threshold of "excessive," however it is defined, you should welcome that initiative because it is in your interest. Why stand up for the guys who are nibbling at your lunch for free -- a pea here, a carrot slice there? You think they're looking out for you?

 

[syswizard]

You think they're looking out for you?

Of course not, but for ONCE, let's do it right and enact the PROPER legislation that will not hurt others. Instead of a tax, let's make a law that will require EXCHANGES to either throttle trades or impose cancel order fees for HFT per the definition....i.e. 50 trades per minute or 100 orders per minute or whatever the proper threshhold is.

 

[Frederick Foresight]

Of course not, but for ONCE, let's do it right and enact the PROPER legislation that will not hurt others. Instead of a tax, let's make a law that will require EXCHANGES to either throttle trades or impose cancel order fees for HFT per the definition....i.e. 50 trades per minute or 100 orders per minute or whatever the proper threshhold is.

A tax won't hurt others any more than cancel order fees if they both adhere to the same definition of HFT activity. Whatever works. Let there be lunch, just let it not be free on the backs of others. I'm agreeing with you; I'm just willing to be more flexible about how the "fee" is administered (in accordance to the same definition of HFT activity) if the exchanges drag their feet.

 

[londonkid]

Bernie Sanders and Hillary Clinton are both proposing new taxes on short-term trades.

I wonder if Trump would do the same.

 

[londonkid]

Day trading is an awesome hobby and way to make $$ as a retail trader. However, to make a living with it is near impossible today--- for the non-wealthy or otherwise financially supported person---

and we are off to the races lol. It is very difficult to make a living as a Day Trader but it is not near impossible. The key element is knowledge from someone who has institutional / prop experience and even then it's definitely not for everyone. It's all about having specialist knowledge of a niche market. Of course money/family connections help. If I was a new trader again I would have tried to specialize sooner and sought out traders who are killing it quicker. Most people look for these pro traders on forums and twitter which is exactly the wrong place. Far better to search online for prop firms or approach people via linked in.

If I was a new trader and lived in the US I would look to move to Chicagoland as quickly as possible, get a job, start saving and making contacts in the trading industry. Once you have $50k saved join a decent prop firm on a 50% split.

specialize people. eg. just trade grains and know everything about that market. Or just trade volatility around earnings. You have to know your market inside out and backwards.

 

[wrbtrader]

If HFTs essentially front run, then they are doing no one any good but themselves. I can see why they would like that, but why would anyone else? It's effectively a tax on non-HFTs. Also, and I am not all that familiar with this subject matter, my understanding is that they only offer liquidity when and where it is not really needed. When the shit hits the fan, however, it's every man for himself. I don't think non-HFTers have anything to be thankful for.

HFT has been here awhile. I started hearing about them during the dot.com bust days.

You really don't want to be trading in a market that doesn't have HFT after HFT has planted its footwork.

Instead, I rather see HFT remain but without those special privileges they get that other none high frequency traders do not get. I strongly believe this has more promise because the exchanges and regulators responsible for such have recently been reviewing the HFT special privileges versus congress trying to tax them via a law...a law that would still allow them to find other ways to play their games.

HFT provides so much liquidity now...I really do not want to be in a market without them...without that liquidity. Just as important...I am not a scalper because I do not want to be competing with them. Having control over how I trade (not being a scalper) is one way to limit my exposure to HFT.

Regardless, we all know how the institutions work these days. Seriously, take something away from them (e.g. HFT)...they'll find something else or create something else that just as profitable. Just look at all the regulations that showed up after the 2008 - 2009 financial fiasco.

The big boys created new trading instruments to get around those regulations and went got more embedded abroad...business as usual.

 

[Handle123]

"I would seek to impose a tax on harmful high-frequency trading, which makes markets less stable and less fair. And we need to reform stock market rules to ensure equal access to information, increase transparency and minimize conflicts of interest."

I am not making 3000 trades per second. Big difference between HFT and a retail scalper.

If traders are not bitching about HFT, they be bitching about something else. Find the flaws within HFT, learn to adapt and take advantage of them. It not like some trader hitting the 3,000 market order button in Crude Oil, it is computers and math, you work hard at how and when they generate a signal and either tailcoat them or figure out how to get in second before they do. I developed few years ago and discovered something by error, I love HFT now and automated program to watch highest trading markets, if dumb me can do it....

People for years complain about something, like those who couldn't trade and then Pattern Trading rule came out for stocks. You actually think there be good changes for smaller trader? LOL Small traders have zero percentage of getting fair shake, small traders don't pay enough to make changes, that like telling the poor vote for us and we will help you as they slide deeper into lower incomes. People complain and changes will always be worse for retail trader, they simple don't count enough. You either stay little trader or start gearing up.

 

[Q3D]

If traders are not bitching about HFT, they be bitching about something else. Find the flaws within HFT, learn to adapt and take advantage of them. It not like some trader hitting the 3,000 market order button in Crude Oil, it is computers and math, you work hard at how and when they generate a signal and either tailcoat them or figure out how to get in second before they do. I developed few years ago and discovered something by error, I love HFT now and automated program to watch highest trading markets, if dumb me can do it....

People for years complain about something, like those who couldn't trade and then Pattern Trading rule came out for stocks. You actually think there be good changes for smaller trader? LOL Small traders have zero percentage of getting fair shake, small traders don't pay enough to make changes, that like telling the poor vote for us and we will help you as they slide deeper into lower incomes. People complain and changes will always be worse for retail trader, they simple don't count enough. You either stay little trader or start gearing up.

In another thread last week you mentioned that the ES is an ATM and that you scalp off the 1 minute chart, even few swing traders say futures markets are a cash machine. Has the ES atleast become less of a cash machine for you as a scalper in the past 5-10 years?

 

[Handle123]

Of course not, but for ONCE, let's do it right and enact the PROPER legislation that will not hurt others. Instead of a tax, let's make a law that will require EXCHANGES to either throttle trades or impose cancel order fees for HFT per the definition....i.e. 50 trades per minute or 100 orders per minute or whatever the proper threshhold is.

Trading does not hold any value for the guy doing a two lot as one who is doing 500 lots, you think you should have same vote? Shoot, only reason there are bottom feeders (brokers) for most part is take from retail, if it wasn't for retail, they not be in business. Yeah, we need more legislation, cause it will hurt the retail trader much more than me, more legislation always hurts the people paying for it. The people who run the exchanges are running a business and not for the two lot trader.

I have a great idea, let's make it a law that in order to trade ANY market, your account has to maintain $100,000, this way those who can't adapt to market conditions won't be able to complain about it. So the two lot day trader going to need $100,000. Just like the candy bar. LOL.