Is Daytrading a Random Event?
- Thread starter LelandC
- Start date
But the markets being random is irrelevant. The important question is: Are you making money, and how much.
Consider two traders making the exact same trades. One is paying .02/share in commissions, the other is paying .0025/share, and one is very profitable and the other is losing money. Is the market any more random for either trader?
Does it matter?
The person with more capital, lower transaction costs, and a better trading style will win no matter the trading environment.
Consider two traders making the exact same trades. One is paying .02/share in commissions, the other is paying .0025/share, and one is very profitable and the other is losing money. Is the market any more random for either trader?
Does it matter?
The person with more capital, lower transaction costs, and a better trading style will win no matter the trading environment.
wow, somebody had the guts to lay that question right out there. My hat is off to you. I think the basic problem is that there are many people who want things to be a certain way, but the statistics are against it.
My opinion, as I have stated in other forums, is that pure daytrading as an outsider paying commissions, never holding overnight, is gambling. The fact that some people make a living at daytrading does NOT contradict that statement. After all, you have to realize that there are indeed people who make a living at playing poker and blackjack. I am not slandering gamblers, but they should at least know that they are gambling.
My opinion, as I have stated in other forums, is that pure daytrading as an outsider paying commissions, never holding overnight, is gambling. The fact that some people make a living at daytrading does NOT contradict that statement. After all, you have to realize that there are indeed people who make a living at playing poker and blackjack. I am not slandering gamblers, but they should at least know that they are gambling.
Do you react randomly to the market? Either to put on a trade or close one? No?..... didn't think so - if you don't react randomly, do you think anyone else does?
Just because it may look like it's random, doen't mean it is....people are buying and selling based on each person's judgement - right, wrong, crazy, bored, stupid, arrogant, short term, long term judgement though it may be, you name it.
ps just because throwing a dart at a list of stocks may make you a better stock picker than most 'analysts' doesn't mean it's random either.
wish i was consistently profitable though ........
coops
Just because it may look like it's random, doen't mean it is....people are buying and selling based on each person's judgement - right, wrong, crazy, bored, stupid, arrogant, short term, long term judgement though it may be, you name it.
ps just because throwing a dart at a list of stocks may make you a better stock picker than most 'analysts' doesn't mean it's random either.
wish i was consistently profitable though ........
coops
define 'short term.' 60 min, 30, 10, 50, 1, tick? I have done studies that have shown that the shorter the time frame, the less 'trendy,' the more random, price action can be. But it's relative, in a sense. How much less trendy is a 10 year chart from a 5 year, a five from a 1, a 1 from a weekly, etc. etc. etc. Trends happen. In all time frames.
if you're the specialist, you can predict short term prices pretty well.
As someone posted, it really doesn't matter whether it's random or not. Just cut your losses and you'll be OK. Believe me, your enemy isn't randomness, it's the HOUSE and human nature (i.e. undisciplined will), including your own.
Having said all this, I have noticed certain days, and time periods within days, are more random. During these times I just back off. Dealing with randomness is just that easy.