How much do day traders make

[Overnight]

southall, one other bit here...

That will be a huge regret over maybe thinking on his death bed "why didnt i follow my passion to be day trader, i could have had a much more free life".

I am not sure that when being on one's death bed, one is thinking about all the things they could have or could have not done. There's just one thing facing them... death. You can't take it with you. I am not going to care if I die rich or poor, because when I be dead it won't matter. And what I may or may have not been able to do for my family is also irrelevant, because what I didn't know I could have done for my family, they will never know about, because I didn't know what it was.

This is getting dragged down into a very banal discussion on philosophy and existentialism. We should just end that line of thought here. Final comment on that bit? Then we can end talking about that bit.

 

[speedo]

Then you will probably go broke. You have to at least feel the pain of losing your life savings.

Been there and done that..trauma sure but my life is better now that it was as a well paid and affluent exec. There is nothing like falling on your face to examine what is important and what real worth is about.

 

[pinabetal]

So, everyone here is loosing money? Maybe by word "day trader" I meant people who trade for a living .. like all guys here.

Yes, we are all loosing money for the brokers and institutions! LOL. IT COULD be labeled sharing but either way ones hand must turn loose of the money...if one does not give it freely they will find a way to get take it anyway. So, you might as well turn it loose and let it go free! Now , if you are talking about losing money then yes most do that to! However, the really good daytraders can make money so fast and in such large amounts it can make your head swim. But it takes awhile to get good and lots of practice losing first, to learn how to win. Generally, one is their own worst enemy. Most are psychologically handicapped when it comes to trading. It takes quite a while to get ones pea brain functioning properly.

 

[DougStewart]

Good luck man, all i can say is make sure your edge is big enough, not marginal.
You are probably going to have to be very selective in your trades to get a big edge/high expectancy.
Maybe not even get a signal to trade every day.

Southall, what, specifically do you mean by "edge"? The probability of getting the direction of the market correct? Or, the size of the winners vs the size of the losing trades? Or something else?

Thanks for your thoughtful replies!

 

[southall]

However, the really good daytraders can make money so fast and in suckh large amounts it can make your head swim.

The market gives you big money by making a big move.
And if doesn't want to move then wont make big money, regardless of how good a trader you are.

If only the tight fisted market would make big moves more often!

 

[southall]

Southall, what, specifically do you mean by "edge"? The probability of getting the direction of the market correct? Or, the size of the winners vs the size of the losing trades? Or something else?

Both really. Are you familiar with the concept of Expectancy?

Mathematical expectancy takes the win rate and win size and loss rate and loss size, to give you a single number, hopefully bigger 0.

Expectancy=(Average Winner x Win Rate) – (Average Loser x Loss Rate)

You need to use R multiples for Average winner and Average loser.

What i tend to find is that short term purely technical price action based systems, especially ones that trade very often, have a low expectancy number, something like 0.1 or less.

Which is similar to the edge of a roulette wheel. However with commission, slippage and mistakes there is not much profit left. A casino doesn't have to worry about any of those three. So can easily make money with a 0.05 or 0.02 expectancy game such as roulette.
But its really hard for a trader to make money with such a marginally profitable (small edge) trading system.

By being more selective with your trades you could get the expectancy up to 0.2 or 0.5, the more the better. The downside is you have less opportunity.

Sadly how to pick the best setups is the magic/secret part of trading that most trader dont want to discuss!

I suggest you read 'Trade your Way to financial freedom' by Van Tharp (if you havent already). He goes into the concept of expectancy in quite a lot of detail.

 

[ET180]

That will be a huge regret over maybe thinking on his death bed "why didnt i follow my passion to be day trader, i could have had a much more free life".

I think that depends on the individual. Some would rather take the opportunity risk of trying and failing at achieving a very difficult goal than succeeding at an easy / mediocre goal. To appreciate that comes from the perspective of realizing that some people believe that one second after you die, everything that you accomplished in life no long has any significance to you at all. Regret over life choices can, in some circumstances, be a matter of philosophy. No one has a road map though life.

EDIT: Wow, apparently Overnight and I are on the same wavelength on this topic. I actually did not see his response before I posted, but we seem to be thinking the same thing.

 

[algofy]

man @southall you sure are a negative dude. Just because something can't work for you doesn't mean it cant work for others.

 

[Mtrader]

Consistency is no problem since the system is 100% technical, working on automating it.

I don't mean consistency of rules. That's a piece of cake.

I mean consistency of making profits or at least survive in any possible market situation. That's a lot more difficult. And that you apparently don't know yet.

 

[pinabetal]

The market gives you big money by making a big move.
And if doesn't want to move then wont make big money, regardless of how good a trader you are.

If only the tight fisted market would make big moves more often!

A really good daytrader makes the money on scalps over and over again all day long. Since most of the time the market is ranging not trending you gotta leverage that ranging behaviour. You gotta learn to love it and do it over and over again.