It is better not to be a full time trader, less is more in trading...

[HolyGrailSeeker]

Full time trader needs a lot more than just making trades. Number of trades don’t matter much. The market will tell you what to do and when...

Rest of the time, you ought to be spending time in critical and analytical thinking, correlating and following a strict discipline...

Every style of trading comes with its own pros and cons...

I can tell you all the critical and analytical thinking is useless once you know what works. The more you think the more you will want to change something that is already working fine. Trading is incredibly easy once you understand it.

The hardest part in trading is finding a mechanical system that works. Try to break the system by giving it the worse possible scenarios that could happen. If it survives it will be profitable.

The second hardest part is doing nothing else and just trading it in and out. People want "fun" and like to do things different from the system.

 

[deaddog]

That's correct.

However the million $ question is: how do the returns of the two do compared to each other.

Maybe the swing trader has more free time but much less money...

Just my own experience; a sample of one; my returns are about the same now as when I swing traded. The difference has not been significant.

Day trading does miss the big overnight moves but in bull markets they lean towards the upside. Wider stops also help. I make enough to keep me happy.

 

[SimpleMeLike]

I can tell you all the critical and analytical thinking is useless once you know what works. The more you think the more you will want to change something that is already working fine. Trading is incredibly easy once you understand it.

The hardest part in trading is finding a mechanical system that works. Try to break the system by giving it the worse possible scenarios that could happen. If it survives it will be profitable.

The second hardest part is doing nothing else and just trading it in and out. People want "fun" and like to do things different from the system.

Hello HolyGrailSeeker,

You are 100% right. I do not care what anyone says, once you find something that makes money, everything else should and needs to be easy.

hard part is finding something that makes money.

 

[SimpleMeLike]

If you need staff to run the algo's, you don't have an algo as an algo should run without any interference of anybody according to you. If not you are again staring at the screen.
A lot of traders have no algo at all.

I sit all day in front of my screen. And I make substancially more money then working at Walmart. You cannot discuss this without comparing the returns. I make more money on an average month then I made per year when I was working. If I trade 1 mnth I can take 11 months holidya, compared to going to work. I don't mind having to watch the screen.


For many people an algo can be something like 1+1=2. What's the definition of an algo? Many people use the word "algo" just to impress people.

This is very true. Preach on sir.

Question for you:

For you to sit in front of the screen all day, I assume you already know and validated what your trading edge is, correct?

Thank you,

 

[Vtechno]

One benefit of babysitting trades and watching the screen is if your stop loss gets hit then goes the direction you were anticipating, you are present to re-enter. And you might even get in at a lower price if you are going long.

 

[Tradex]

The less you trade the more profitable you are at the end of the day.

On the contrary, if you have a good day trading system your best bet is to trade more often, on multiple markets.

At the end of the day, taxi drivers (for example) make more money with short trips (in the $5 to $15 range) than with supposedly more "profitable" $50 trips (from downtown to the airport for instance).

Same thing with day-trading, when your target is reached close the position and initiate another trade in another market, if you have a valid trading signal.

 

[virtusa]

Just my own experience; a sample of one; my returns are about the same now as when I swing traded. The difference has not been significant.

Day trading does miss the big overnight moves but in bull markets they lean towards the upside. Wider stops also help. I make enough to keep me happy.

A few remarks:

• If I would trade intraday with a margin of $5,00 per contract ES, you would need $12,100 to go overnight for the same position. So if you go overnight, you have to make 2.42 times more points to make the return as me. If I make 5 points you have to make 12.1 points. I will make more easily my 5 points then you making 12.1 points.
  
• If you have a good intraday trading system you will always beat swingtraders. The difference in margin is the "secret". Stops are much closer too, so smaller losses.
  
• I do not miss the overnight session as I watch the market from 01:00 till 15:00 (I live in Europe and 01:00 is in my country 08:00 AM). As I have 2-3 signals a day, about half of 14 hours I am not sitting in front of my screen. I can take a break watching at the sea from my terrace, walk thru my garden, or jump in the swimming pool.
• I can try to catch the optimal signals. A swingtrader can try to catch the optimal signals, but he will miss many of them as he is sleeping roughly 8 hours every night. I don't miss the 01:00 till 8:30 session which is many times very profitable. Swingtraders have no control at all about what happens with their position in this first session or they have to stay up at night. They can only see in the morning what happened at night and hope everything went well.

I agree with you that at a certain point you are happy with what you make and don't want to live for trading, but trade for living.

 

[virtusa]

On the contrary, if you have a good day trading system your best bet is to trade more often, on multiple markets.

At the end of the day, taxi drivers (for example) make more money with short trips (in the $5 to $15 range) than with supposedly more "profitable" $50 trips (from downtown to the airport for instance).

Same thing with day-trading, when your target is reached close the position and initiate another trade in another market, if you have a valid trading signal.

He probably has a system with a negative expectancy. In that case it is indeed better to trade as less as possible.

 

[Tradex]

He probably has a system with a negative expectancy. In that case it is indeed better to trade as less as possible.

Well virtusa , if your trading system has a negative expectancy then the only winning move is NOT to play!

Ring a bell?

However, if a trading system really stinks, then trading the exact opposite signal is the right move.

A famous trader once said : "Give me a really, REALLY bad trading system and I will make a fortune!"

 

[countryBoy641]

A real life example is BTU coal miner or Sears. Someone who held it will have lost almost everything
Survivorship bias is everywhere

You'd have to be crazy to go long stocks like BTU and forget about it.

Back then, I had stuff like that, including 10K shares of Massey Energy (MEE).
When the main Massey mine exploded (2010 ?), I was looking at the stock pre-market. It opened at 7:00am, I had all the shares sold by 7:20am. A very OK price.
I think they went bankrupt. Same with BTU.
Owning a stock is just a date with a hot babe, nothing more.