How much do day traders make

Mtrader said:
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.
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Please tell me how i should look in to the future to see if the system will survive the next let's say 5 years? :banghead::D
For now it looks promising, both in back testing and the last few months in live trading.
Like i said, i shall see what the future holds for me.
Now this was my contribution to this thread, not interested in discussing with non believers.
Think of it whatever you want ...
 
ET180 said:
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.
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Two for one fries at BK will do it every time.;)
 
southall said:
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.
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I've seen that book & will add it to my "to read" list. Meantime, would the formula be calculated something like this:

Expectancy= [(4 X $50 emini SP500 point) X .52 win rate] - [(3 X $50) X .48 losing trade rate] = ($200 X .52) - (150 X .48) = $32 per average trade ? This doesn't seem to match your message. Seems I must read the book....
 
RDK91 said:
I am doing something like this, so it is definitely possible.
My system has a 1:1 RR and on average around 65% succes rate.
I have 2 of these systems, i both trade them on ZB and ZN only, backtest shows that i should get around 100 ticks a month on ZB and 50 on ZN. So far my live results are matching the backtest results.
Lets say i get 50 ticks on ZB and 25 on ZN each month and i scale it up to lets say 60 contracts then i would be making +100K/month.

It almost seems to good to be true but so far the live trading shows the same results as the back testing so i am very exited and i hope it works out as it should :D
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RDK91 - what does the abbreviation "RR" above mean? I take it ZB is 24hr gasoline and ZN is 24hr Nat Gas, correct?
 
RDK91 said:
Please tell me how i should look in to the future to see if the system will survive the next let's say 5 years?
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You will know in 5 years.
So don't be too optimistic. That was the initial message.
 
When I quit my job to trade nobody could have talked me out of it. I lasted for 6 years. The irony of it is my best years of profits were had when I was still working full time. The compounding factor, not having the performance pressure, and trading costs are probably why. Keeping the job while fast tracking your capital via maxing out your savings while investing and/or swing trading can rocket you out of the rat race a lot faster than you ever imagined. Like so many I got caught up in the illusion if I quit my job and just focus on trading I will make more $ - wrong! I learned less is more with trading, it takes time in the market like days, weeks, months to get the big gains. Yea, there are some rare birds that do well at day trading - but even those birds paid some hefty dues to get to that that level. Good luck man.

20130103122905Trader Pie Chart.JPG
 
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Well defo don't quit until you've been profitable for a few months atleast.

Find a market you can trade before/during/after work, small account and practice practice practice, you'll go NUTS looking at charts all day, trying to guesstimate a direction and jump on it, so a few hours per day is more than enough anyway, even when full time.

End of March if nothing goes wrong, is when I close my business, then got till end of May before I need my first wage, simples :) Not about the money, can't take the business, most of the people that I work in any more, just an alternative income source, not expecting to be a millionaire ever, if I can make say 2K USD maybe 3K USD most months that'll do me nicely.

More important things than money!!
 
systematictrader said:
that is whats happening they lose then a new supply of money comes in, young people dont have money but also dont have much expenses so they can always lose steadily which adds up to big amounts, i know that was my case when i was losing money from age 18-26 i didnt have any but i had an income and i was able to add 500-1000 a month
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But I'm surprised that there is a continuous stream of new money...I work with a lot of young engineers who all make six figures and have a lot of disposable income. I only know one person aside from myself who trades actively. The rest all invest in mutual funds or 401k / ETFs. It doesn't seem like there is enough new money out there to support those who make a living from trading. Oh well, not my problem. Just curious.
 
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