Grim future for day trading as a career

The concept of market efficiency and technological evolution increasing market efficiency at a theoretically if not practically exponential-rate suggests the truth that discretionary day traders have a short life span.

Legendary traders turned trading salespeople are proof that a trader's existence is fleeting and propped up on life-support from outside sources of income and capital.

I'm still waiting for DDTs to propose ways to "game" HFT and algorithms (market efficiency) via price action chart patterns at <15 minute timeframe and to theorize how the future anticipation of quantum computer's effects on intraday price action will be negligible or exploitable while maintaining the thin but positive risk-reward ratio resulting in the few theoretically profitable discretionary day traders who could exist.
 
Michael J. Fletcher said:
I'm sure that there is no future for trading as a career in the future, we all be replaced by the algorithms. I'm learning to code right now.
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He was specifically given many "propose ways" to lesson the impact of HFT and algorithms. Your suggestion was one of them and there is a growing number of retail traders doing such.

As to the issue for discretionary day traders sub-group called scalpers...specific propose ways was also discussed with him. That too he ignored (didn't reply...didn't acknowledge).

Not understanding versus choosing to be ignorant...one is very obvious in discussions with him.

Now lets talk about algorithms. I had mentioned in another thread a list of top universities in the world that have state of the art trading rooms that cost millions to build...money donated to the university from top institutional trading firms.

Now many of those universities introducing "algorithms/coding/automation" to those trading and interested in such. Although this stuff has been here since around year 2000...its now picking up steam with university schools of business, finance, mathematics and such.

Back office quants quants around 150k salary with bonuses while front office quants working with the firm traders typically earn 250k salary with bonuses mainly due to the job being more demanding and because they're working directly with those making the trade decisions.

I certainly can understand why college students are becoming more interested in such regardless if they want to be a quant or working with a quant as a trader.

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Now back to the thread starter, as a reminder, if you want to lesson the impact of algorithms...don't be a scalp trader. Its as simple as that. Yet, if the OP can't resist trying to be a scalper...at least do it correctly. For example, get a seat on the exchange to lower the cost of scalper because having such will give the scalper fees that a typical broker can not offer. The other suggestion that profitable scalper use...employ automation especially when trading highly liquid trading instruments.

It was also stated that anyone calling themselves a discretionary trader and scalping via 5min charts and using a traditional broker...stay away from the markets because its a scalper that is clueless.

The above suggestions was given to the thread starter before...twice. Now a third time for discretionary scalper to compete with algorithms...many discretionary scalpers are doing such by changing their trading style.

All other types of discretionary traders (position traders, swing traders and day traders looking for trends)...HFT and algorithms do not impact them the way it impacts scalpers.

Regardless, scalping as a discretionary trader has always been the toughest way to try to succeed as a day trader even long before the world of algorithms.

I obviously do not recommend the trading style called scalping.
 
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There was a 15 point 1-minute-bar, HFT noise on the ES today at 10:17, 12K contracts traded. This is an example of range and volatility that is not trade-able and nonsensical from an old-school PA perspective, not a good omen of future PA for intraday DDT swing traders or scalpers.
 
Q3D said:
There was a 15 point 1-minute-bar, HFT noise on the ES today at 10:17, 12K contracts traded. This is an example of range and volatility that is not trade-able and nonsensical from an old-school PA perspective, not a good omen of future PA for intraday DDT swing traders or scalpers.
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I heard that move was crazy and very abnormal for ES. The liquidity is crazy low lately. I do give it to you that ES is trading drastically different than years ago.

But I still believe a good human discretionary trader can adapt and trade most any market condition.
 
Q3D said:
There was a 15 point 1-minute-bar, HFT noise on the ES today at 10:17, 12K contracts traded. This is an example of range and volatility that is not trade-able and nonsensical from an old-school PA perspective, not a good omen of future PA for intraday DDT swing traders or scalpers.
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1) That's abnormal price action via a news event.

2) You only see such maybe once per month.

Why are you worry about a type of volatility spike that rarely occurs unless its an extreme news event ?

Of course its not tradeable and its something you normally don't see. Thus, you're not in the position to trade it. :D

Please don't tell me you're one of those traders that sits at his computer all market hours waiting for a news event to trigger a rare type of volatility spike that occurs maybe once per month and then announce you can not trade it.

If you are one of those types that hangs around waiting for junk like that to trade...you deserve to have trading problems.

Seriously, pretend tomorrow they announce a surprise rate announcement a day ahead its planned release like they did a few times when George Bush was president...

Will you go run to your computer to trade those types of price movements that last less than a minute and then lose your ass to only complain it doesn't work. In reality, get smart and leave it alone especially if you don't know what the heck is going on.

Once again, ignore those types of rare events unless you know what's going on and you obviously do not. Think about this carefully, I saw 5 veteran day traders on Stocktwits laugh at traders trying to trade that type of rare price action event...they call those traders...amateurs.

Then when the price action came back to its normal range prior to the spike...the amateurs disappear just as fast as they showed up.

With that said, did you see any threads today here at ET by any traders asking how can they trade such ?

I didn't but I did see someone ask what to do when such happen. I saw one of the veteran ET members say its not worth trying to trade...stay away from it. He's an old school price action trader.

My point, you're mixed up about what old school price action traders tend to trade.
 
Many more prudent and longer-time-frame oriented DDTs, following in Al Brooks' teachings, who were holding a short position with non-break-even or without a profit-taking stop had their stops hit, possibly with slippage, for significant losses on what would only become a winning trade once again after the HFT noise quieted down.

The writing is on the charts, DDTs do not have a place in these markets on low time frames and Al Brooks' books have not properly educated readers (me) of the new realities of 21st century PA.
 
onemoreshot said:
I heard that move was crazy and very abnormal for ES. The liquidity is crazy low lately. I do give it to you that ES is trading drastically different than years ago.

But I still believe a good human discretionary trader can adapt and trade most any market condition.
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If you traded in the 90s...that type of price action was more common during news releases and those surprise FED rate announcements that occurred days or a few weeks before scheduled rate announcements.They were scary and today was a nice reminder that those price actions can still show up when we have almost forgotten about their existence.

Reality, most traders do not trade that type of price action or they are not able to trade it because by the time they realize what has happen...there's no trade and they spend the rest of the day talking about it. :D

In contrast, if someone was lucky and already Long prior to that volatility spike upwards and then exited before the retracement back down...that's just a lucky trade via an unexpected news driven event.

Nothing wrong with having a lucky trade once in awhile.
 
There was actual follow through on the sort of surprise market reactions in the 90s and earlier you're referring to, that's the point, there's no follow-through now with HFT, except in times when it can't be predicted with any sense of probability by a discretionary day trader.
 
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