How is retail day trading anything but a gamble?

[ironchef]

Absolutely. All technical indicators are lagging. It's been proven mathematically in many studies that markets are unpredictable:

Technical analysis is pushed by brokers and introducing brokers onto naive investors as an easy to understand formula for getting rich. Of course it doesn't work. But by then the retail trader has blown up several thousand dollars in his account yet the broker has made far more than that by taking the other side of his trades, financing the turn, spread and commission.

The introducing broker gets a fat percentage.

If you truly believe this, why are you joining a trading forum? Don't tell me you are trying to save us from ruin?

 

[speedo]

I have to admit I've only just started learning to trade/invest myself. I'm quoting books and courses I've been working through. It is a sweeping statement, but there seems to be a lot of evidence that supports the Efficient Market hypothesis (the idea that all information about a securities price is already 'priced in'). Any new information is rapidly priced in long before any retail investor can exploit it, ie, almost immediately.

HFT's and algos are perhaps proof of this, ie, how you have to heavily invest in equipment and expertise just to exploit a tiny arbitrage opportunity unrealised before. This is an opportunity created by an advancement in technology rather than a refutation of EMH. If not why not just hire analysts and save a lot of money?

Not sure about indexes but passive investing and the actions of the herd could drive prices up unrelated to the fundamentals and you get an overpriced market and consequently a bubble? (This is a strategy I may follow)

I think Kendall was showing that price changes are independent of one another and therefore unpredictable.

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Below is a chart that shows potential returns from day trading.

View attachment 229858

Academics are not traders, traders are traders. However academics are generally smart people who are adept at devising quasi-empirical bullshit to razzle dazzle the great unwashed while bolstering tenure as well as stature among the theorists. If there were no edges, algo's could not make money and they are written by humans who understand the nature of price development. Those who put in the study and work can ultimately understand such but few do, therefore "markets are random", "PA/TA doesn't work (whatever the fuck means)", "only the institutions can make money, the markets are rigged" etc etc. Those who have done the work understand the probabilities of price direction given defined technical conditions as well as the risk and reward scenarios for a given trade. BTW, the worst way to learn to trade is to engage in these endless and mindless discussions.

 

[volpri]

This statement pure hogwash.
Quote: "It's not random but we may never know the reason".
Snakeoil talk at its finest.
For every tick or bar no one knows the reason! Period!
There's a billion people trading at any one time, are you suggesting Joe Bloggs in NY knows the reason why an unknown person in an unknown city placed a trade and made price move, or 102 people simultaneously somewhere spreadout all across America placed their trades which moved price?

LOL well wash that pig good. There is aways a reason for anything that happens. Something caused it. You may not know what caused but something did. And it will always show up on the chart. 99% of the time if price moves 1 tick an institution caused it. You may not know why they caused it but they did. It is not random. The faster that traders dispense with the random malarkey the quicker they will become profitable. It is easy to tell when a trader struggles. They pull out the ole random rabbit out of the hat. They can't explain it so they have to throw it in the waste can of randomness. Best take that garbage to the dump! ROFLMAO

 

[speedo]

LOL well wash that pig good. There is aways a reason for anything that happens. Something caused it. You may not know what caused but something did. And it will always show up on the chart. 99% of the time if price moves 1 tick an institution caused it. You may not know why they caused it but they did. It is not random. The faster that traders dispense with the random malarkey the quicker they will become profitable. It is easy to tell when a trader struggles. They pull out the ole random rabbit out of the hat. They can't explain it so they have to throw it in the waste can of randomness. Best take that garbage to the dump! ROFLMAO

Mickey

 

[ironchef]

Half of it was made in the last 18 months.

Actually makes sense with the way the market was behaving since Dec 2018. And realize with a 27% you should double every 3 years, so doubling in 18 months is within your statistical spread.

Most of my profits were generated in the last 5 years because of compounding and growth.

 

[deaddog]

An indicator can tell where the price is LIKELY to go next, just like the weatherman uses indicators (temperature, wind velocity, atmospheric pressure, cloud formations, etc...) to predict tomorrow's weather.

Even in life we are constantly using past and current data to make an educated guess about the future.

Well same thing with technical analysis, its uses the past and the present to determine the most likely outcome in the future.

Of course the "efficient market theory" clowns will try to persuade you that the past cannot predict the future. Just let them talk, while we technical analysis traders continue to consistently extract money from the markets.

If you take the time to plot the indicator on your own, that is use the formula to compute the indicator values, you soon figure out how the price movement affects the indicator. So by watching what price does you can determine what the indicator is likely to do.

Indicators just manipulate price data into a visually pleasing display. If price is trending it is likely to continue trending until it stops. The market will always continue in the direction it is going until it doesn't. Unless we know the intensions of every trader in the market we cannot know where the price goes next.

It's wild ass guess vs educated guess combined with a little portfolio management and little risk control. My win rate is pathetic yet at the end of the year I'm profitable.

 

[volpri]

Mickey 4 bottles of snake oil were processed a few minutes ago in my journal. You may want to go there and see if you can detect what snake? LOL

 

[Tradex]

My win rate is pathetic yet at the end of the year I'm profitable.

Don't worry about the stupid winning percentage, a trader can make a killing even if he loses 70% of the time.

"It's not whether you're right or wrong, but how much money you make when you're right and how much you lose when you're wrong."
(George Soros)

 

[themickey]

I'm not saying markets are random, I'm saying tick by tick and short term bar by bar is random.
There are a gazillion noob and idiots who belong in a assylum who trade.
They fuck price around, they're clueless, inept, stupid, only God can read their stupid brains and know why price moved.
No one on ET has the mind of God to read the idiot random short term market moves or what the idiots are thinking.
However, on a longer term basis, markets are semi logical, and the longer you trade & study the markets the easier it is to profit consistently profitable, handsomely profitable for good operators.
That's because the idiots might be king for a second, but smart money managers rule at the end of the day.

 

[Tradex]

I'm not saying markets are random, I'm saying tick by tick and short term bar by bar is random.

Absolutely, at the tick level the market is virtually random, all the price action is generated by totally unpredictable buy and sell orders.

I mean don't even try to trade a head and shoulders formation on a tick by tick chart, for example, it won't work.