Is the retail daytrader an endangered species?
- Thread starter Darshan
- Start date
Several recommendations to day trade index futures in this thread but the quote above speaks the truth. The leverage pendulum swings both ways and if you're holding a position when the Fed makes a surprise rate cut, or some potentially market-moving report gets released, you can quickly take a substantial hit when the tide of money goes whooshing against you.
A safer alternative to the E-mini S&P 500 futures are the SSO and the SDS ETFs, which move approx. 2x the S&P 500 cash index and are bull and bear funds, respectively. I'd try trading those first. Both have substantial volume and can be day, swing, or position traded. Trade 100 or 200 share lots until you show consistent profits. Then up the size. At least you won't get wiped out trading those vehicles when the market takes an unexpected turn. And if you can't trade those ETFs profitably then I don't see how trading e-minis is going to be any easier.
What exactly is "end of day swing trading of stocks"?
Is that when you buy at the end of the day and sell on open the next day or within the week? Or is it when you buy in the last hour/30 minutes and sell on close?
I believe he means using daily charts (also referred to as "end-of-day") to trade swing trade (short term trades 2 - 10 days in duration). i.e., Time Frame: Daily bars; Trading Style: Swing trades.
I'd still like to know if anyone agrees with me that trading ETFs such as SSO and SDS would be a safe alternative to trading the E-mini S&P 500 contract. (see my post on page 7.)
I'd still like to know if anyone agrees with me that trading ETFs such as SSO and SDS would be a safe alternative to trading the E-mini S&P 500 contract. (see my post on page 7.)
What is the exact correlation with the S&P 500 index ?
Why not the SPY ?
hydroblunt , Aka waterlogged
You are way off the mark. In one sentence you say daytraders provide no liquidty and then you go on to say they are only useful to provide commissions and PROFITS for the big boys.
Oxymoron
Almost time for F1 qualifying in Spain, REAL men driving REAL machines, not glorified grocery carts running in circles chasing their tails like Smashcar.
Ok, lets try this for a pic of BIG HOG, the other one was a jpeg and did not work. If this works, review hogs playpen HEROS http://members.tripod.com/~ArloG/vf-17pictures-3.html
Ok, that worked, time for race, have good weekend all. Next week is slicing bacon again.
http://members.tripod.com/~ArloG/index-2.html
You are way off the mark. In one sentence you say daytraders provide no liquidty and then you go on to say they are only useful to provide commissions and PROFITS for the big boys.
Oxymoron
Almost time for F1 qualifying in Spain, REAL men driving REAL machines, not glorified grocery carts running in circles chasing their tails like Smashcar.
Ok, lets try this for a pic of BIG HOG, the other one was a jpeg and did not work. If this works, review hogs playpen HEROS http://members.tripod.com/~ArloG/vf-17pictures-3.html
Ok, that worked, time for race, have good weekend all. Next week is slicing bacon again.
http://members.tripod.com/~ArloG/index-2.html
<i>"I'd still like to know if anyone agrees with me that trading ETFs such as SSO and SDS would be a safe alternative to trading the E-mini S&P 500 contract. (see my post on page 7.)"</i>
A skilled trader with solid approach can work any of those markets successfully. A trader without developed skills and/or solid approach will fail at both. It's not the market... it is never the market.
For the OP to say he "tried" a few different things has nothing to do with committed to learning and success. Anyone can say they dabbled at something, it didn't work, therefore no one can succeed.
As for leverage? Each trader adjusts that according to account size and trade size. A $2,000 account balance trading one ES contract, a $20,000 account balance trading one ES contract and a $200,000 account balance trading one ES contract are working the exact-same symbol with its exact-same leverage versus the underlying. However, the leverage exerted on each account is a different story by factors of 10s.
Simple as that. The whole "futures are leverage = dangerous" is simply ignorant crap. Yes they are levered derivatives of their underlying... so what? The only thing that matters is how you, me and anyone else adjusts our own leverage in our account. That comes strictly from $$ risked per trade on balance, regardless of what widget we choose to trade.
A skilled trader with solid approach can work any of those markets successfully. A trader without developed skills and/or solid approach will fail at both. It's not the market... it is never the market.
For the OP to say he "tried" a few different things has nothing to do with committed to learning and success. Anyone can say they dabbled at something, it didn't work, therefore no one can succeed.
As for leverage? Each trader adjusts that according to account size and trade size. A $2,000 account balance trading one ES contract, a $20,000 account balance trading one ES contract and a $200,000 account balance trading one ES contract are working the exact-same symbol with its exact-same leverage versus the underlying. However, the leverage exerted on each account is a different story by factors of 10s.
Simple as that. The whole "futures are leverage = dangerous" is simply ignorant crap. Yes they are levered derivatives of their underlying... so what? The only thing that matters is how you, me and anyone else adjusts our own leverage in our account. That comes strictly from $$ risked per trade on balance, regardless of what widget we choose to trade.
It means doing after hours analysis of the daily charts and putting in orders to be executed the next day... you do not need to be in front of your monitors during market hours...
If one can position trade then that same person can be a daytrader because it is the same game just with a different time frame.
Many fail at daytrading and maybe are better position traders because they can handle risk taking better. Daytrading is nothing different than position trading but in a compressed time frame which requires many more decisions and extremly solid discipline.
Some handle stress better than others, some thrive when challenged, some seek fear in the game they play.
So the question about is the daytrader dead can not be answered in general. The "Q" that you as an individual must answer for yourself is do you have what it takes to be a daytrader? I believe you answered that "Q" in the first post.
38 cylinders, 2,000 horsepower Tom Blackburrn said: I need high performance men to fly this high performance bird. Tom saw the new bird and its long snout that housed the massive round engine and it reminded him of the hogs at home, thus he called his new bird BIG HOG. He took down japs in the Pacific. I take some bacon.
Imagine yourself going on a mission and you run into a few jap zeros and make it home, sweaty and maybe puked up your guts from fear but you won the day and a couple jap zeros are at bottom of the pacific. http://hk.youtube.com/watch?v=cQgrISASIC0&feature=related
Sound of power http://hk.youtube.com/watch?v=O2rpXkb40X0&feature=related
Many fail at daytrading and maybe are better position traders because they can handle risk taking better. Daytrading is nothing different than position trading but in a compressed time frame which requires many more decisions and extremly solid discipline.
Some handle stress better than others, some thrive when challenged, some seek fear in the game they play.
So the question about is the daytrader dead can not be answered in general. The "Q" that you as an individual must answer for yourself is do you have what it takes to be a daytrader? I believe you answered that "Q" in the first post.
38 cylinders, 2,000 horsepower Tom Blackburrn said: I need high performance men to fly this high performance bird. Tom saw the new bird and its long snout that housed the massive round engine and it reminded him of the hogs at home, thus he called his new bird BIG HOG. He took down japs in the Pacific. I take some bacon.
Imagine yourself going on a mission and you run into a few jap zeros and make it home, sweaty and maybe puked up your guts from fear but you won the day and a couple jap zeros are at bottom of the pacific. http://hk.youtube.com/watch?v=cQgrISASIC0&feature=relatedSound of power http://hk.youtube.com/watch?v=O2rpXkb40X0&feature=related
All true... but I would add -- from personal experience -- that in terms of "returns to time commitment", the swing trading of equities is by far superior...
I do not trade during market hours... all my analysis, trading and trade management is done after the market closes... 1 hour a day is all it takes on average (some days will take no more than 10 minutes, some days may take 2 hours)...
Contrast that to daytrading, lets say for 5 hours a day...
I would anticipate returning around 50% from my swing trading accounts this year (with profits swept out every quarter)...
A good daytrader with a small account (under $300,000, with profits swept out every month to live off) should be getting 80% (more in bubble times, less during times of choppiness / volatility contractions)...
But in terms of returns to time commitment for someone who actually makes a living from trading...
Assume 250 trading days, 1 hour/day for swinging, 5 hours/day for daytrading...
Swing trading: 50% per year for 250 hours work: there is NO stress with taking one's time over decisions after hours...
Daytrading: 80% per year for 1250 hours work, plus all the stress that goes with daytrading...
As I stated in a previous post, for me the end of day swing trading of stocks wins hand down every time...
I have only recently returned back to trading, now that my poker business is up and running... the additional time freed up for online poker more than offsets the lower returns from swing trading...