The good news is it isn't necessary to "completely figure it out". What we can do is develop an edge and the discipline, focus, patience and courage to play that edge.
Is Daytrading difficult or impossible ?
- Thread starter speedo
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I've done both. Long term trading and daytrading. I will take daytrading any day (pun intended) over long term. Why?
1) my capital is only at risk when actually in the markets. With daytrading its' exposure to the markets is usually only minutes, or hours, at most. I am usually flat every day i trade by session end.
2) with short term I have the opportunity to compound my recent profits over and over. Many times. Not so with longterm; that is, the compounding sequence is alot less.
3) the potential for exponential profits exist in short-term trading as each major move has many rallies and declines. Each is therefore an opportunity for more profit as opposed to just getting in on the big move and then exiting it when the move ends. Hurst describes the concept in more detail in his book.
The trick is developing and discovering and executing good strategies for short-term or the market can empty your billfold rather quickly in short-term trading.
Finally, in short-term daytrading you know exactly how you stand at the end of every trading day. You are win, lose, or draw. Thus you can sleep good at night and awaken for a fresh start with new beginnings tomm. Waiting for those monster moves day after day can become taxing emotionally and frustrating as one rides up and down the myriad of rallies and declines waiting for the monster move to culminate.
1) my capital is only at risk when actually in the markets. With daytrading its' exposure to the markets is usually only minutes, or hours, at most. I am usually flat every day i trade by session end.
2) with short term I have the opportunity to compound my recent profits over and over. Many times. Not so with longterm; that is, the compounding sequence is alot less.
3) the potential for exponential profits exist in short-term trading as each major move has many rallies and declines. Each is therefore an opportunity for more profit as opposed to just getting in on the big move and then exiting it when the move ends. Hurst describes the concept in more detail in his book.
The trick is developing and discovering and executing good strategies for short-term or the market can empty your billfold rather quickly in short-term trading.
Finally, in short-term daytrading you know exactly how you stand at the end of every trading day. You are win, lose, or draw. Thus you can sleep good at night and awaken for a fresh start with new beginnings tomm. Waiting for those monster moves day after day can become taxing emotionally and frustrating as one rides up and down the myriad of rallies and declines waiting for the monster move to culminate.
I started off on the shortest time frame possible, we were rebate traders, pushing massive volume on shit that didnt move back then like SUNW, or JDSU, the whole purpose was just to scratch every trade, if you put through 100k shares of something like JDSU that had a 1 tick range at the time, and scratched it but got rebates on both sides it was 400 bucks. I would regularly be gross negative but net positive. Unfortunately this slowed down the learning curve a bit cause i developed the habit of not even wanting to hold trades 1 tick off side, id just cut a position the second i took it if it went offside.
Went from that to raping dark books till they caught on, but that was the easiest money in history.
Then tried some systems trading
now full discretionary trading.
Slowly but surely my time frame in terms of how long i hold positions has lengthened, these days the sweet spot is about a day and a half, buy or sell something in the morning hold for one full day then sell the pop the next morning if you get it.
Ive found that the shorter the time frame/shorter the range you are trading on the harder it is to gain an edge, the algos are better at it than you, and faster your never going to beat them anymore if your time frame is 10 minutes looking to flip from the bid to the ask for 10 cents. The longer your time frame is, the less the amount your going to get skimmed for by bots matters.
Went from that to raping dark books till they caught on, but that was the easiest money in history.
Then tried some systems trading
now full discretionary trading.
Slowly but surely my time frame in terms of how long i hold positions has lengthened, these days the sweet spot is about a day and a half, buy or sell something in the morning hold for one full day then sell the pop the next morning if you get it.
Ive found that the shorter the time frame/shorter the range you are trading on the harder it is to gain an edge, the algos are better at it than you, and faster your never going to beat them anymore if your time frame is 10 minutes looking to flip from the bid to the ask for 10 cents. The longer your time frame is, the less the amount your going to get skimmed for by bots matters.
The process is most difficult by far, as really no clear and concise book on how. Sure people can give out signals, exits, breakevens, trailing, but there is so much more and you CAN NOT learn from someone in weekend or a month. When I mentored in past, I had to give two years with them, can be one system or ten systems we go over, but all pretty much have same entries, exits whatever, but some people get it right from get go and other take much longer as they just don't get it, and signals alone are not entire pie, you have over dozen patterns of when not to take good signals based on to the left of now, there are literally over 100 rules you have to memorize and many would think it is absurd and that is cause they don't realize they have already memorized them. There is risk and not the risk of the trade, but risk before the trade and ongoing risk of what to do when price hits a target and you don't get filled-need rules for this, and yes, there are ways to cheat in day trading-you study anything long enough and keep an open mind, you will find the few that are in an area few think about.
Say you get good enough and your losing percentages keep dropping, this is where it gets interesting as you can average down at some point, the cardinal sin in trading.
Albert Einstein said it best "Great spirits have always encountered violent opposition from mediocre minds."
@volpri I understand and yet I know better about risk of day trading and long term, day trading is THE most risky endeavor cause of what you average on each trade and what you risking on each trade is for me always inverse than on long term trades. Now I know it wrong compared to the masses who day trade and scalp, risking over 4 points tying to make 1-2 points in ES, but all my work is based on swing/wave averages and trading is all about probabilities, more data you test, better the back tests. But when I compare to stocks, risk is hedged and I can't hedge easily in day trading and still come out with profit to make it profitable enough. Few times a year I have staggering loses, and I know based on stats of recovery time, based on month to month the stats hardly change with the exception of August as very light volume in Indexes and most markets. Thankfully, now I have automation for my accounts, main system I have a goal of 17% of risk in 20 trades, so with each added trade to get this "goal" the percentages go down, and all the testing shows with this system, max thus far has been 122 trades to net goal, so basically risking incredible sums to make this goal, sums I would never hit in long term trading stocks and commodities. And yes, have an Uncle point of when to stop trading, 2 full loses.
Since being on this forum, I have only found two day traders who can successfully risk relatively low and make three times plus more consistently for day trading
Day trading is not hard, but learning the process is extremely difficult to get started as even profitable traders don't always have a clear idea yet.
These are MHO and not written in stone, and never average down unless you understand risk and risk of ruin well.
Say you get good enough and your losing percentages keep dropping, this is where it gets interesting as you can average down at some point, the cardinal sin in trading.
Albert Einstein said it best "Great spirits have always encountered violent opposition from mediocre minds."
@volpri I understand and yet I know better about risk of day trading and long term, day trading is THE most risky endeavor cause of what you average on each trade and what you risking on each trade is for me always inverse than on long term trades. Now I know it wrong compared to the masses who day trade and scalp, risking over 4 points tying to make 1-2 points in ES, but all my work is based on swing/wave averages and trading is all about probabilities, more data you test, better the back tests. But when I compare to stocks, risk is hedged and I can't hedge easily in day trading and still come out with profit to make it profitable enough. Few times a year I have staggering loses, and I know based on stats of recovery time, based on month to month the stats hardly change with the exception of August as very light volume in Indexes and most markets. Thankfully, now I have automation for my accounts, main system I have a goal of 17% of risk in 20 trades, so with each added trade to get this "goal" the percentages go down, and all the testing shows with this system, max thus far has been 122 trades to net goal, so basically risking incredible sums to make this goal, sums I would never hit in long term trading stocks and commodities. And yes, have an Uncle point of when to stop trading, 2 full loses.
Since being on this forum, I have only found two day traders who can successfully risk relatively low and make three times plus more consistently for day trading
Day trading is not hard, but learning the process is extremely difficult to get started as even profitable traders don't always have a clear idea yet.
These are MHO and not written in stone, and never average down unless you understand risk and risk of ruin well.
AZN was a perfect example of why my optimal hold time is a day and a half, whenever i treat a trade as a day trade i find myself exiting at short term highs, and im pretty good at getting price action right, but i sell a high at 11:00 or something, and then it looks real good at the time, but if i just would have held till end of day id be way further ahead, plus there is usually a decent push the next morning. So i have to take myself out of the mindset that a trade is a day trade so i dont go looking to closely at the chart.
I absolutely nailed the price action on AZN today, but it cost me money in the end if i just would have held, only made like 700 bucks trading the stock absolutely perfectly. If i had just held for 1 more day and told myself it was a multi day trade i could probably sell at 35 on monday doubling the profit.
This is where knowing yourself and your tendencies is so crucial, i beat my head against the wall for so long trying to figure out how to find the exact high every day, then i realised if i just held on too trades that were working for an extra day it was more profitable.
Its almost embarassing for me to hit my entries and exits as good as i did on AZN and only end up with 700 bucks, went too light right off the bat cause it was pre market, but it was an obvious trade so should have been in heavy, then didnt add enough once it proved itself on the open, then micromanaged it cause i had other trade going bad at the time, so i wanted to make sure i still ended up profitable. I literally traded my PNL, lol..........its going to frustrate me all weekend, should have just taken a longer term view instead of watching tick for tick looking for the perfect spots to enter/exit.
The biggest struggle you will go through as a trader is this mental battle every day, it is absolutely crucial you know yourself, and trade in a way that will work for YOUR personality, its easy to find good entry and exit points, the hard part is the mental battle that takes your trading to the next level once you nail it.
I absolutely nailed the price action on AZN today, but it cost me money in the end if i just would have held, only made like 700 bucks trading the stock absolutely perfectly. If i had just held for 1 more day and told myself it was a multi day trade i could probably sell at 35 on monday doubling the profit.
This is where knowing yourself and your tendencies is so crucial, i beat my head against the wall for so long trying to figure out how to find the exact high every day, then i realised if i just held on too trades that were working for an extra day it was more profitable.
Its almost embarassing for me to hit my entries and exits as good as i did on AZN and only end up with 700 bucks, went too light right off the bat cause it was pre market, but it was an obvious trade so should have been in heavy, then didnt add enough once it proved itself on the open, then micromanaged it cause i had other trade going bad at the time, so i wanted to make sure i still ended up profitable. I literally traded my PNL, lol..........its going to frustrate me all weekend, should have just taken a longer term view instead of watching tick for tick looking for the perfect spots to enter/exit.
The biggest struggle you will go through as a trader is this mental battle every day, it is absolutely crucial you know yourself, and trade in a way that will work for YOUR personality, its easy to find good entry and exit points, the hard part is the mental battle that takes your trading to the next level once you nail it.
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I would have exited at first red down arrow on entire position, speed of price making half of a "Tepee" and reduction on volume is no brainer, I be waiting for the retracement back to 33.41, what was once resistance is now support, always going to miss a couple as won't retrace this pretty, but hey, you make a profit on a "FRIDAY" you doing awesome.
Could have used trend lines on bottoms to add on retracements risking next to nada.
Really nice trade, don't beat yourself up on it, accept.
Yeah hindsight trading is always 20/20 but realistically, knowing myself i should have taken it all off at 34 it got stuffed on volume there, and once i committed to selling some of it, i was always going to end up selling out on the next roll over, again its one of those mental traps where i commit to finding the top for my exit i watch it soooo close, where as i could have just said this is a multi day hold, and took my eyes off it. The algos are fucking brilliant at shaking you out of a position if you pay to close attention on a 2 minute chart. If you watch a stock closely, they will often present you with a half a dozen reasons to sell mid day, right before it blows the top off.
AZN was phase three trials on a cancer drug, going to be lots of people just getting the news this weekend i think so a pop to 35 on monday seems almost guaranteed.
Im not beating myself up over it, was pretty stoked about the places i bought and sold, its just that it wasnt perfect so im always thinking how i could have done better, the perpetual struggle as a trader, lol, wanted to list this to show how much of an impact the mental side of trading has on you every day, and just how difficult that struggle is. Even when you win and hit something just right, it still feels like a loss if you dont nail it, and quite frankly if you want to aggressively grow an account, its not good enough to just say you got your entries and exits perfect, but didnt cash in. In order to make big money you have to crush the 3-5 opportunities a month that stand out, this is one of those trades, where it should have been easy and big, but instead i played it like a dickless coward, fine with making a few hundred bucks.
AZN was phase three trials on a cancer drug, going to be lots of people just getting the news this weekend i think so a pop to 35 on monday seems almost guaranteed.
Im not beating myself up over it, was pretty stoked about the places i bought and sold, its just that it wasnt perfect so im always thinking how i could have done better, the perpetual struggle as a trader, lol, wanted to list this to show how much of an impact the mental side of trading has on you every day, and just how difficult that struggle is. Even when you win and hit something just right, it still feels like a loss if you dont nail it, and quite frankly if you want to aggressively grow an account, its not good enough to just say you got your entries and exits perfect, but didnt cash in. In order to make big money you have to crush the 3-5 opportunities a month that stand out, this is one of those trades, where it should have been easy and big, but instead i played it like a dickless coward, fine with making a few hundred bucks.
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Day trading is much more difficult as the reaction time is short and there is no luxury of after market research.
Day trading is also much more draining to energy levels of both mind and body.
A new breed of trading rooms have come up where they only trade couple of hours in the morning and finish up for the day. Makes sense!!
Day trading is also much more draining to energy levels of both mind and body.
A new breed of trading rooms have come up where they only trade couple of hours in the morning and finish up for the day. Makes sense!!