Popular daytrading account size

[KCalhoun]

Not really... T+n (usually n = 2) would greatly impair ones ability to make consecutive trades, unless trading very small positions of very low priced (nominally speaking) stocks. Commissions may even be the deciding factor for placing such (day)trades.

Understood, right re commisshes except recently free unlimited commissions for USA traders using fidelity Ameritrade IB etc

Trading using margin is one of the worst things non profitable or new traders can do. Imho the right progression is:

Paper trade only, or tiny under 10 share trades at most, until one is consistently breakeven.... most will never reach that

Swingtrading initially then gradually test daytrading.

The worst so-called trading instructors peddle get rich quick images, claiming to make thousands of dollars daytrading sub-$10 notoriously difficult momentum pop and drop bs stocks.

Also useless are the legions of bullshit poser YouTube fake trader educators with zero blotters, no proof they even trade.

 

[deaddog]

Were talking trades here not longer term holds . Actually to be honest i'd recommend few people ever short outside a few min to hr scalp . Actually any trader with years of trading what his biggest loss is and its from shorting 95% of the time . I'm basically a very very short term trader so shorting is ok for me but like you said people have trouble taking loses and if you can't in shorts you'll not be a trader long .

That is why I would recommend that you start trading with shorts. If you start with a long it is easy to justify turning it into a longer term trade. Turning a trade into an investment rather than take a loss.

 

[hafez50]

Re PDT 25k rule that's for margin accounts, true. But traders can daytrade much smaller cash accounts. Trading in a sep IRA greatly simplifies taxes, too.... though no shorting.

Agree with hafez re shorting is risky, I don't short, though I go long inverses which is short bias.

A reasonable expectation re trading is you will lose all money and blow up several accounts.

The learning is curve is a fucking bear. I'm a UCLA grad plus former statistician for Ford with 164 IQ and it took years before my first profitable year as a trader. And I still trade chickenshit size, and make more from teaching than trading.

Whenever I speak at Moneyshow events I caution folks that most won't even get to be breakeven til at least 5 years and even that is unlikely. Faces of newbies fall, while veterans nod in agreement.

Imho traders should not trade live capital til they are consistently profitable on sim trading.

My friend worked for a day trading firm 12 or more yrs ago. They flew a new person in every 2 weeks for him to teach at his house . They paid him $2k a week and he could sill trade. It was sad . People in wheelchairs, people with oxygen tanks, single mothers with 4 kids. The total course for everything for like 4 weeks of total training was like $20k. These people had dreams of riches . They Put the charges on their credit cards . I bet not a one made it . Actually the firm was shut down and sued .I caution all very very few make it. There's iron glad rules you live by every single day or you parish. What kep me motivated early on was one thought. If i lose all my money i have to get a job driving 1 hr to and from work . Thats were i learned the only thing you control is your loses . The rest is meaningless if you can't breath that rule . This gig is not about finding your next big trade. Its a marathon finding consistency and living by rules that keep you in the game . Embrace your loses . It means your free and can hunt your next winner .

 

[deaddog]

A reasonable expectation re trading is you will lose all money and blow up several accounts.

Why is that?

Does being undercapitalized and having inflated expectations have anything to do with it?

 

[KCalhoun]

My friend worked for a day trading firm 12 or more yrs ago. They flew a new person in every 2 weeks for him to teach at his house . They paid him $2k a week and he could sill trade. It was sad . People in wheelchairs, people with oxygen tanks, single mothers with 4 kids. The total course for everything for like 4 weeks of total training was like $20k. These people had dreams of riches . They Put the charges on their credit cards . I bet not a one made it . Actually the firm was shut down and sued .I caution all very very few make it. There's iron glad rules you live by every single day or you parish. What kep me motivated early on was one thought. If i lose all my money i have to get a job driving 1 hr to and from work . Thats were i learned the only thin you control is your loses . The rest is meaningless if you can't breath that rode . This gig is not about finding your next big trade. Its a marathon finding consistency and living by rules that keep you in the game . Embrace your loses . It means your free and can hunt your next winner .

Fkg brilliant..... totally agree, all you control is your losses, you can tell a good trader by how much they obsess over risk mgmt and stops. Great entries are much less important than great exits, but few "get it"

Right too re concern about alternative re driving to 9to5 keeps us focused on trading smart

 

[Turveyd]

Why is that?

Does being undercapitalized and having inflated expectations have anything to do with it?

I know a mate who blew £120K 17years back, bought telewest in and out a few times for a small profit, with entire account then it basically went to Zero and he held it all the way down.

More capital = more loss, they try to force more capital via PDT, but it's not for you, it's so you go hard, lose it all then walk away, it's the small players that chip away then take out profits, millions of us add up, then want 100K 1 time losers.

 

[hafez50]

Why is that?

Does being undercapitalized and having inflated expectations have anything to do with it?

Learning curve is brutal. Me and spooz top have talked about it many times . I bet i have 10-20k hrs in front of screen . Anything said on here is meaningless till you experience it yourself. Till you feel the sting of a huge lose over and over and over again and submit to the pain and never want to feel it again . Its along process . My first encounter of real pain was 1990. The guy war first started in Aug 1990. I had just entered the mkt very part time maybe 10 months before . The mkt was weak and had fallen 20% i believe . Everything was going great. I was buying and shorting 5k shares at a time with Fidelity spartan( Paying $100 a trade which was cheap) back then. I was up $150k , Many was on my way to $1 mil i thought that year (never extrapolate out ). Then into Dec i started shorting heavy and holding . The war was near and huge profits were assured . I'll never forget . I was at blockbuster and over the speaker it said the gulf war had started .I believe it was Jan 16th 1991. I said in my mind i'm going to kill
it .I went home and a funny thing started happening . At about 11 pm the Japan mkt started rising . I was confused . Why? The war started we should be crashing . Well the futures and Japan mkt rose all the way till the am huge . Airline stocks which i had a ton of shorts gapped up huge . All of a sudden i went for up $40k to down $70 k . Well of course i couldn't take those huge loses . So in the end about a week later i threw in the towel down $140k. I was crying it hurt so bad . That big lose stuck in my head till this very day. I never wanted to feel that pain again . But how could i assure i'd never feel that again? I knew i'd have many many loses in the future . Only 2 ways . Never hold that kind of size overnight without it being hedged and learn to take your loses fast .

 

[hafez50]

Fkg brilliant..... totally agree, all you control is your losses, you can tell a good trader by how much they obsess over risk mgmt and stops. Great entries are much less important than great exits, but few "get it"

Right too re concern about alternative re driving to 9to5 keeps us focused on trading smart

Triple Bingo Ken . Another rule to live by . We all guess on our entry's but we can't guess on our exits .

 

[Real Money]

Every new trader needs to watch that video . He has 2 incredible tips why he failed . #1 reading zero hedge which is 100% negative and skews your thought process . #2 shorting stocks destroyed him. The mkt goes up 70% of the time so odds stacked against you shorting . I'd advise no new trader shorts till he learns to win long . Just my opinion . I always like to say when i short i have eyes in the back of my head .

Hefez50 is the real deal. Agree with this. Shorting index futs intraday is for the pros.

The guys who are shorting ES aggressively are the smartest and most serious traders in the world. These are also the guys trading interest rates and the basis spreads.

They have the best intel, infrastructure, funding, access, and technology.

These are the guys I watch when trading. I have secret (quant!) models and custom software built for this. It's too complicated to explain. It uses the PREM, which you can learn about on your own.

Most of the 'regular' traders/prop who short indexes with leverage are usually buying a correlated index at the same time. In other words, they will short the index but are hedging their bets by buying a related index.

This allows them to make money on short index positions even while they are going up!

Ex: Sell NQ buy YM, sell RTY buy YM --- index spread trading (index differentials).
(AKA correlation trading indexes)

 

[deaddog]

That big lose stuck in my head till this very day. I never wanted to feel that pain again . But how could i assure i'd never feel that again? I knew i'd have many many loses in the future . Only 2 ways . Never hold that kind of size overnight without it being hedged and learn to take your loses fast .

Sound like the other reason traders fail. Not having a trading plan or not following the plan.