Grim future for day trading as a career

[wrbtrader]

I'm not sure you'll find what you're looking for here. Many traders on ET are looking for a largely anonymous forum; the "truly successful" have little-to-no economic incentive to provide an Internet forum with definitive confirmation of their success, as this could open them up to fraud, amongst other things.

FYI, highly successful traders are periodically offered large sums (running into hundreds of millions) to run, once their brokers (but only certain brokers) see how well they're doing; if they accept, at that point many of them are no longer "DIY", by most peoples' definition.

Alternatively, James Harris Simons could be considered a "truly successful DIY day trader", if you consider how he started out. The fact that he now owns the world's most successful hedge fund is an outgrowth of his initial, DIY trading.

Also, not to say this is the case with you, but it often seems on these forums that those searching for a confirmation of their belief (e.g., "there are no successful DIY traders") move the goalposts to satisfy their presupposed conclusion; for example, another ET thread gave the "really successful" criterion as meaning something like trading $10,000 into $100,000,000 within 2 years. No one has done this, therefore it's impossible to be "really successful at trading", according to that person's definition.

To look at this from another angle, how much are you willing to pay to get whatever "confirmation" you need, and exactly what sort of "confirmation" would you need, and exactly what performance? Maybe someone will bite if you clarify this, and start another thread, making a very specific proposal that could be brokered by Baron.

Profitable private or retail traders are all dismissed by people at this forum for many "stupid" reasons that I've seen posted here over the years:

1) He's not a member of the forum

2) He's now a fund manager and if he was really that good...he'll still be trading his own private account making millions or billions instead of working for a fund (investors).

3) He didn't post live calls

4) He did not do such in today's markets (it was done in markets from years ago)

5) Its not his only source of income

6) He didn't share his method so that it can be tested and verified

7) He didn't turn less than 10k into 1 million in less than 2 years

8) He didn't have a win:loss greater than 90%

9) He didn't post his income tax statements to see if he had another source of income

10) He's now a vendor (can't be trusted)

11) He started a fund and the fund lost money even though he was a profitable private trader prior to starting a fund

12) He no longer post at this forum (his account is inactive)

13) He's from a wealthy family and didn't have the typical financial pressure that most retail traders have

14) He uses other things in his trading with his trade method (argument usually thrown at TA users)

15) He must have been successful trader for a minimum of 10 years

I can go on and on with the above but I think you understand why traders do not take the naysayers seriously mainly because each naysayer have their requirements or they change their requirements. #5 above is the most recent requirement.

Ironically, there are private traders at this forum that have either posted verification (brokerage statements) while posting live calls elsewhere and one of them has been audited.

The two traders (inactive members of ET) mention is Tony Oz and Timothy Sykes. Both profitable private traders PRIOR to becoming a vendor. Both have either posted their brokerage statements here at this forum or someone has done in for them here at this forum. Yet, both still trade their private accounts regardless if their website is successful or not.

Ironically, every naysayer that I've seen at this forum...they've at least mentioned once here at this forum that they themselves are profitable traders. Yet, they too refuse to post any brokerage statement or audited trading records.

Furthering the contradiction, they naysayers are primarily pssst at specific traders they've had consistent disagreements about anything related to trading or related to life itself. I only state this because the naysayers do not challenge others for proof of profitability if the person is a friend at this forum. Simply, the demand for proof is really a personal conflict that has developed between two traders.

So yeah, James Simons was a very successful private trader and the same is true for Paul Rotter. Unfortunately, depending which naysayer you're talking to at this forum...those guys will be dismissed for any of the above reasons mentioned. Those specially mentioned above will never bite on anyone's request because its already been posted here or elsewhere without any school yard challenges.

Like you said, this is an anonymous trading forum. Most folks that join this forum probably would not join if their identity was available to every other member.

 

[Chewy]

the basic premise of this thread is that expenses are going up. but in reality they have dropped down hard. back in early 1980 it might cost you $500 for the data feed plus a couple of hundred for CQG to deliver the data to you via satellite dish. And commisssions where never below $25 a trade.

So the entire article is total hog wash. I dont believe a word of it. It will keep expanding. Just look how IB Brokers has captured the grammer school kids. and there are contests for the kids where they can win big prizes I think maybe a free college education all based on how they do on no money simulated accounts.

And let me say that some of these kids are super excellent traders. they learn super fast and have great work ethic and some are astounding everyone. This is a big computer game to these kids they are natuarally attracted to it. I would have loved it as a kid. I guarantee you that. I would have just been absorbed in it all the time. what a fantastic opportunity. learn before you have all the ego problems to over come as an adult.

 

[Pigsky]

A big reason why some people ask for proof is as a way of trying to obtain a profitable trading system.

Once the trader provides enough evidence, then the asker can go about trying to figure out how he/she got those results and then try to replicate it in their own trading.

I used to ask for proof for pretty much those reasons.... I was always working on my own ideas but why not speed the process along if possible by getting ideas from others?

Surf on the other hand is most likely continuing his role of "batman".... patrolling the streets of gotham for wrongdoers aka stealth vendors and those living internet fantasy lives.... LOL! I don't know why people get so upset over it.

But seriously....... anyone wanting proof should know to go to a prop firm and you will find it. Simple as that. As has already been mentioned..... looking for it on social media is the low probability path to take!

 

[speedo]

I've quoted this before :
"Good traders know the markets Great traders know themselves"
Until a trader really understands this he will not become consistent.
Forget entries, indicators, charts, studying this is putting the cart before the horse.
Fix "you" first or expect more of the same.
View attachment 159963

We have all struggled early on with losses and have looked at analytics for the answer. "My wave count is off....maybe Gann square outs are the answer....I need more filters....I need to develop proprietary oscillators or MA's..." And there is "I need to develop more discipline". Discipline is a nebulous term which overlaps and masks many things.

Trading can be fairly simple but where the rubber meets the road is in consistency of behavior and you can't manage your behavior until you take a hard look in the mirror. To "fix" things requires a difficult and often painful inventory of your faults and weaknesses. That's the bad news. The good news is for those willing and able to undergo the process, you will be on the road to operating on a higher level. The market doesn't care if you graduated Summa Cum Laude, used to be a surgeon. judge, general or whatever. It is also not impressed with your net worth.

Until one has stripped away the ego (the false, imagined self not self-confidence which is part of ability) and can observe ones impulses in the heat of battle, the trader will continue to look to methodology or more data or testing as the key to success.

The other alternative as is obvious to participants in these forums is to continually proclaim, day after day, month after month, year after year that it can't be done.

 

[marketsurfer]

A big reason why some people ask for proof is as a way of trying to obtain a profitable trading system.

Once the trader provides enough evidence, then the asker can go about trying to figure out how he/she got those results and then try to replicate it in their own trading.

I used to ask for proof for pretty much those reasons.... I was always working on my own ideas but why not speed the process along if possible by getting ideas from others?

Surf on the other hand is most likely continuing his role of "batman".... patrolling the streets of gotham for wrongdoers aka stealth vendors and those living internet fantasy lives.... LOL! I don't know why people get so upset over it.

But seriously....... anyone wanting proof should know to go to a prop firm and you will find it. Simple as that. As has already been mentioned..... looking for it on social media is the low probability path to take!

Prop firm traders can and do definitely make a career. My contention is that DIY at home retail careerers dont really exist unless they are wealthy to begin with or have another passive source of income.

After 10 years of trying to meet one and not suceeding is a huge tell that its all fantasy.

 

[lawrence-lugar]

Surf on the other hand is most likely continuing his role of "batman".... patrolling the streets of gotham for wrongdoers aka stealth vendors and those living internet fantasy lives.... LOL!

After 10 years of trying to meet one and not suceeding is a huge tell that its all fantasy.

These two post replies about Fantasy day traders reminds me of that Ludacris song: What's Your Fantasy. it was released in 2000, when the tech boom market bubble burst...the irony.

(i think stock retail traders/day traders...is a dying breed...the move range is simply too tiny to make it worthwhile. those are for those HFT firms that scalp for pennies. -- but trading leverage products that have larger % returns is not for the retail trader.)

 

[speedo]

These two post replies about Fantasy day traders reminds me of that Ludacris song: What's Your Fantasy. it was released in 2000, when the tech boom market bubble burst...the irony.

(i think stock retail traders/day traders...is a dying breed...the move range is simply too tiny to make it worthwhile. those are for those HFT firms that scalp for pennies. -- but trading leverage products that have larger % returns is not for the retail trader.)

I can't speak to other markets as I haven't traded them in awhile but the ES daily range is pretty good. There are consolidation days (which are tradable) but there have always been consolidation days. Really not much has changed through the years. Yeah, it's a little more challenging but you adapt. It's certainly not the "pick the money off the floor" days of the tech revolution but that was an aberration. Every fool made money then.

 

[ken__0]

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

Thx Bob I feel all better now .

 

[wrbtrader]

...(i think stock retail traders/day traders...is a dying breed...the move range is simply too tiny to make it worthwhile. those are for those HFT firms that scalp for pennies. -- but trading leverage products that have larger % returns is not for the retail trader.)

Retail stock traders that are scalping took a big hit when the pattern day trading rule was adopted in the markets. Another big hit was the decimalization. In addition, don't forget the biggest collapse in day trading...the dot.com bubble burst in one single year. All of which caused a big exodus of retail stock traders...

Most of which had nothing to do with increase cost of trading, new technology or algorithms as Q3D proposes.

Therefore, yes...that is one particular area that is a dying breed of traders...the retail stock day trader.

Last year I was talking to a broker about a bloomberg article about such. He confirmed the numbers but also said its not so much that there are less traders...its more about the accounts are smaller and traders are trading less.

Other observations to correlate with the above are discussion forums. If you've been a member of different forums for +10 years...you can easily see the decline in day trading and especially that sub-group called scalpers.

Another observation are free chat rooms. I've seen 10 popular free chat rooms lose as much as 60% of their membership since 2000. Huge drops when the dot.com days bubble burst, huge drops within days of the pattern day trading rule when it was first adopted, huge drops after the decimalization, huge drops after the 2008 - 2009 financial fiasco.

Note: The biggest drops were due to the bubble burst and the pattern day trading rule. I remember bloomberg posting record breaking numbers about the exodus of traders just before 2008.

Oddly, at that time, there's a huge increases in traders joining to Twitter and Stocktwits. That's the confusing aspect...if day trading is a dying breed...why is there such a big growing presence on twitter and stocktwits for day traders ?

The only thing I can assume is that those day trading statistics posted by Bloomberg, Marketwatch and brokers is only representing the U.S. markets whereas there's a larger international presence on Twitter and Stocktwits because of their reach beyond the borders of the U.S.

I've also seen large growing presence in the FX markets...the biggest market on this planet. Its a +5 trillion dollar industry...each day. Up from 1 trillion dollars per day back in year 2000. This also correlates with the growing number of day traders on Twitter and Stocktwits...FX day traders.

Thus, there's an overall growth in day trading if you include the FX markets but if you only look at the decline of retail stock traders in the U.S. markets...the decline in the U.S. for stock trades is correlated directly to the dot.com bubble burst, pattern day trading rule, decimalization and the bundle with the 2008 - 2009 financial fiasco.

P.S. Is there a growing presence of FX day traders here at Elitetrader.com ?

I would say no and maybe its something Baron (ET owner) should be taking a closer look at considering the statistics say he should be paying closer attention to FX markets.

P.S.S. The most active trading forum is an FX forum (not Elitetrader.com)

 

[Q3D]

Lack of range is not the only issue making discretionary day traders' impending extinction imminent. On CL futures there is often a very large range, but very few DDTs can capture this range due to the price action coming closer to brownian motion than ever before at the 1 second-15 minute level. A 40 point move on a 15 second chart can retrace itself 30 seconds later, leaving DDTs dazed and confused and with blown accounts.

The dearth of DDTs capturing much of CL's range on trading sites like Stocktwits or journals here speaks for itself. Most of the anecdotal reports of success are from more wealthy swing traders who can afford to take on the greater risk caused by the algorithms while avoiding the apparent brownian motion of intraday PA at < 15 min level and following higher time frame charts which (for now) have less of a resemblance to brownian motion.