Intra Day Trading Options

T

TradeCat

I've been trading for a few years and focus on stocks, ETFs and Options. Obviously there is no one way to make money on the markets. Position/Swing trading hasn't worked for me. Intra day trading has been more consistently profitable but on a small scale, that is, small gains. Communicating with several career retail traders over the years, it seems like an expectation of 1-5% for intra day trades on daily positions is a good risk/reward profit strategy.
Few questions follow.

(1) Are there any full-time traders here who've found scalp trading with 1-5% profit margins to be good enough for the long haul?

(2) Have you found more success in the first hour, afternoon and/or last hour of trading? I ask because opening positions early and holding them for most of the day have brought decent gains, as well as big losses to me.

(3) I find that Options on ETFs to be just as liquid, spread-tight and leveraged as their Futures counterparts. Any arguments either way here? I have compared the volume, open interest on similar instruments like SPY/ES on CBOE and CME and Options seem good enough. Plus my broker doesn't support mobile trading of Futures which is inconvenient she I'm out and about.

(4) There is no way I see myself doing anything other than trading. I'm not in it to make a fortune. Just a decent middle class income. How do you find the strength to get through days when all you make is 1%?

(5) I've never been a believer in stop loss orders or cutting my losers early. This is because sometimes waiting an extra hour has made me slight profitable when I was ready to take a loss. Though I definitely won't hold an intra day trade all day. Thoughts?

Thanks for helping a fellow trader out. Best fraternity I've ever been a part of.
 
you should rather ask yourself the question: How do I find the strength to get through days when all I make is -2 or -3%? That is the real question you should ask yourself. Let gains take care of themselves, it is potential losses you should manage very well and in a calm and clear state.

TradeCat said:
I've been trading for a few years and focus on stocks, ETFs and Options. Obviously there is no one way to make money on the markets. Position/Swing trading hasn't worked for me. Intra day trading has been more consistently profitable but on a small scale, that is, small gains. Communicating with several career retail traders over the years, it seems like an expectation of 1-5% for intra day trades on daily positions is a good risk/reward profit strategy.
Few questions follow.

(1) Are there any full-time traders here who've found scalp trading with 1-5% profit margins to be good enough for the long haul?

(2) Have you found more success in the first hour, afternoon and/or last hour of trading? I ask because opening positions early and holding them for most of the day have brought decent gains, as well as big losses to me.

(3) I find that Options on ETFs to be just as liquid, spread-tight and leveraged as their Futures counterparts. Any arguments either way here? I have compared the volume, open interest on similar instruments like SPY/ES on CBOE and CME and Options seem good enough. Plus my broker doesn't support mobile trading of Futures which is inconvenient she I'm out and about.

(4) There is no way I see myself doing anything other than trading. I'm not in it to make a fortune. Just a decent middle class income. How do you find the strength to get through days when all you make is 1%?

(5) I've never been a believer in stop loss orders or cutting my losers early. This is because sometimes waiting an extra hour has made me slight profitable when I was ready to take a loss. Though I definitely won't hold an intra day trade all day. Thoughts?

Thanks for helping a fellow trader out. Best fraternity I've ever been a part of.
More...
 
TradeCat said:
Communicating with several career retail traders over the years, it seems like an expectation of 1-5% for intra day trades on daily positions is a good risk/reward profit strategy.
Few questions follow.
More...

Alot of traders (or wannabe traders) would kill for 1% daily, :p:cool:
...you got yourself something special there, if you're able to sustain and carry that forward for the long haul.

as for your questions, i'm sure you have the answers to those -- if not, they will come to you in due time.
 
I am a rookie trader but I try to answer part of your question.

If you can consistently make 1% per day, compounding by 250 trading days a year, do the calculation and you will be pleased.

As of stop loss (or stop profit), my understanding is that because I know I am not capable enough to forecast the future, I set up stop loss rules to help me. True, there are cases that price goes up after my stop loss. But there are also cases that price goes down further and stop loss saves me.
 
All the books I read said day trading options was not a good idea.
TradeCat said:
Why?
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Hard enough just to guess the direction of the underlying in very short timeframe, imagine also have to deal with delta, gamma, IV, vega, theta... It made my head spin. On top of that, thin volume, wide bid ask spread.... So, even if you are right about direction, option prices may not follow and profit is even more elusive.

Just a personal view from a new trader who failed badly in day trading.
 
Interesting responses. With good margin and a healthy trading account (not for small retail investors) intra day trading of stocks, like AAPL or BABA, is a helluva lot easier and profitable.
Personally I don't like Options. Greeks, especially theta (time decay) and delta really make it hard to make a profit. Guess I'll play it safe and stick to intra day trading my blue chip watch list (TSLA, AAPL, FB, etc.).
 
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