Grim future for day trading as a career

Q

Q3D

http://www.bloomberg.com/news/artic...ters-entice-wall-street-vowing-higher-returns

http://www.nytimes.com/2015/10/03/y...-trading-could-be-a-boon-to-returns.html?_r=0

Many financial institutions, including the CME, are investing in quantum computing to increase profits, a side effect of this will be even less predictable price patterns at the lower time frames day traders operate on.

Bernie Sanders and Hillary Clinton are both proposing new taxes on short-term trades. The result of this will be increased diminishing returns for day traders in their struggle to maintain a rising equity curve while competing with more sophisticated technologies.

The logical conclusion to the evolution of the markets and increasing expenses associated with short-term trading is that day trading, even more so discretionary day trading, should not be seen as a career, but a highly specialized business endeavor and primarily a hobby where diminishing returns are high and cannot be calculated into the future due to the unpredictable expansion of new technologies and increasing expenses.

Day trading is a hobby that has a possibility for a return on capital, what is produced for a profit in one year has a rising probability of resulting in negative returns in the years ahead, not as a career or profitable business endeavor as defined as a sustainable source of income projected for more than a decade into the future with increasing returns based on time and capital spent.
 
Day trading has and always will be difficult. Trading in general is a difficult career. What continues to make it attractive, is that there are very few business where you can be self-employed and run your own business with very little overhead and a moderate level of capital. And, do that from almost anywhere in the world at any time of day.

Bob
 
Q3D said:
...The logical conclusion to the evolution of the markets and increasing expenses associated with short-term trading is that day trading, even more so discretionary day trading, should not be seen as a career, but a highly specialized business endeavor and primarily a hobby where diminishing returns are high and cannot be calculated into the future due to the unpredictable expansion of new technologies and increasing expenses.

Day trading is a hobby that has a possibility for a return on capital, what is produced for a profit in one year has a rising probability of resulting in negative returns in the years ahead, not as a career or profitable business endeavor as defined as a sustainable source of income projected for more than a decade into the future with increasing returns based on time and capital spent.
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Nothing wrong with trading as a hobby if you're able to profit as such. In fact, over the years here at ET there has been a few polls and most members seem honest in admitting that trading is a hobby or just part-time. In fact, I've seen a several journals here at ET in the past 2 years involving traders that said they were trading from work during their free time with their employer having full knowledge of such and OK with it.

There was one guy very serious...he moved to a new time zone so that he could trade full-time and then afterwards...go to work. He's very happy with his 20k per year profit to go along with his job that pays about 40k per year.

As for full time traders that trade for a living...its a small percentage. It has been that way and always will be that way.

The issue about the increase costs of trading...just like any business...you gotta adapt and counter those rising costs. For example, get better at treating your trading as a business (e.g. tax deductions) even if you have another job because tax agencies puts no limit on the number of jobs you can have. You also need to get better at using available free resources. :cool:

As for new technologies...it works both ways. There are new technologies for traders today that wasn't available during the big boom of trading during the dot.com days...especially in the area of mobility, automation, algorithm and so on...available now for traders including day traders.

I think the main issue today with traders is that they are slow to embrace these new technologies. Seriously, there's been a few articles online about retail traders using algorithms. I bet if you do a poll here at ET...you'll only see a small percentage (maybe a handful of traders) that are actually using algorithm as retail traders.

There's even a growing list of retail traders (day traders) that have discovered flaws in algorithm trading of HFT firms, institutional trading firms and they've been legally exploiting those flaws. Ironically, some firms like UBS, Deutsche Bank, Morgan Stanley and many others have cried foul. :D

My point with the above...you gotta adapt or find something else to do. It really is simple as that and you'll be surprise at how many people are not willing to adapt. Thus, they stay married to whatever it is that is holding them back...a marriage based upon the old way of trading or the old way of viewing the markets.

Simply, if you want trading to be a career...you gotta be looking for ways to adapt every year.
 
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Q3D said:
Bernie Sanders and Hillary Clinton are both proposing new taxes on short-term trades. The result of this will be increased diminishing returns for day traders in their struggle to maintain a rising equity curve while competing with more sophisticated technologies.
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Every US citizen here on ET needs to get out there and vote Republican next year.

Haven't these past 7 years shown how hard it can become for a typical business person to make an honest living? Ever increasing taxes, regulations, red-tape, paperwork.

Clinton would basically be Obama part deux. Sanders would be Libtard on steroids.

VOTE REPUBLICAN
 
Q3D said:
Many financial institutions, including the CME, are investing in quantum computing to increase profits, a side effect of this will be even less predictable price patterns at the lower time frames day traders operate on.

Bernie Sanders and Hillary Clinton are both proposing new taxes on short-term trades. The result of this will be increased diminishing returns for day traders
More...

I'm sorry, but isn't there a contradiction here? Aren't HFTs trading even much faster than retail day traders, for much smaller profits per transaction (as a percentage), such that a short-term tax would hurt them more?
 
VPhantom said:
I'm sorry, but isn't there a contradiction here? Aren't HFTs trading even much faster than retail day traders, for much smaller profits per transaction (as a percentage), such that a short-term tax would hurt them more?
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Sanders and a few others have always had this tax thing against "trading" although Q3D is trying to make it an issue about "day trading" when in fact its about trading across all levels...professional and retail.

I first heard of Sanders when that crazy day trader (prop firm) killed fellow workers at his trading firm and he killed his family before committing suicide back in 1999.

https://en.wikipedia.org/wiki/Mark_O._Barton

http://www.nytimes.com/1999/07/30/u...anta-slays-9-then-himself.html?pagewanted=all

The Atlanta shooting occurred within weeks after two other mass shootings and then soon after the Atlanta shooting a racist killed several individuals at his job (post office employee)...all the shooters had a prior mental illness history but were still able to purchase a gun.

There was such an uproar about these shootings that there was even a congressional meeting about gun laws. Yep, Sanders was there involved with in those gun law discussions and very vocal and that's when I first heard of Bernie Sanders. He also seemed "to me" to put a lot of emphasis on the day trading shooting in comparison to the other shootings.

A believe this is the same Bernie Sanders that recently made headlines when he flipped (changed some views) about gun control laws just prior to a key democratic debate.

So yeah, these proposed tax laws (there's others) are aimed at all traders regardless if they work at home or professional for a firm although obviously the firm will pay the tax (not their employees that are traders).

Currently, the exchanges and regulators are devising new fee structures for HFT firms and other firms doing high frequency trading. Thus, even if people like Sanders don't pass any new taxation laws...there's still the exchange and regulators setting up their own "additional fees" for HFT firms.
 
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vphantom: The improvements in technology in the coming years and decades will increase the efficiency of high-tech and high-speed trading firms at the cost of retail day traders among others, therefore any short-term tax would decrease profits of retail-discretionary day-traders more than institutions as their methods of trading will not improve, but will decline in efficiency. http://qz.com/389647/artificial-intelligence-is-the-next-big-thing-for-hedge-funds-seeking-an-edge/


wrbtrader, you said earlier day traders fail because they don't treat trading like a business, I guess you meant to say most fail because they don't treat trading as a hobby and potential part-time business that can at best provide supplementary income sporadically?
 
VPhantom said:
I'm sorry, but isn't there a contradiction here? Aren't HFTs trading even much faster than retail day traders, for much smaller profits per transaction (as a percentage), such that a short-term tax would hurt them more?
More...
They will be exempt via some loophole. If it does take place, it will only hit retail. All big boys won't pay it. Usual story.
 
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