profitable daytrading is possible, but probably not worth the effort

[Daxtrader]

So how does one find this so called edge? Do you sit around looking at charts until you get an "AHA!" moment? I just don't get it anymore. Can a successful day trader confirm that trading is mostly managing your risk/reward correctly? Is it mostly about taking a small string of losses and then hitting a home run?

I think a lot of members here post about being profitable but probably don't even trade.

 

[hughbr]

Champion and ADX Trader make great points.

I agree that # 1&2 prevent 3&4, but even successful traders who follow hard and fast rules (systems) will experience a string of losses. It's the nature of the beast. To prevent the strings of losses, but have lots of strings of winners, the approach is rules based, but tempered with experience. That's why I believe focusing on one market is so key.

Trading sucess for me came when I realized that the market is engineered to have the most people wrong at turning points.

Many big moves up come from too many shorts, the same for longs on moves down. On each move, a trader has to determine is it real or a shake out. The right answer delivers in spades.

 

[sunggong]

Quote from Daxtrader:

So how does one find this so called edge? Do you sit around looking at charts until you get an "AHA!" moment? I just don't get it anymore. Can a successful day trader confirm that trading is mostly managing your risk/reward correctly? Is it mostly about taking a small string of losses and then hitting a home run?

I think a lot of members here post about being profitable but probably don't even trade.

In my opinion, EDGE is nothing more than understanding yourself and developing mental toughness to control your two primary emotions, fear and greed, which plague so many traders.

That and risk management.

One can make money consistently if these factors are successfully addressed...even without the best trading method.

Of course, most people flame out because they can't "control" themselves.... Very hard thing to do for most....

 

[hughbr]

I assure you I trade every day. It's a passion for me.

Beginning traders come into the market thinking trading is easy. If they happen to hit a winner or two in the process, this belief becomes stronger. EventuallY they wipe out and either leave or refund the account. I have been there many times, so I know the drill. The pros count on a fresh string of newbies to donate their money and they are never ending.

I donated a lot of money before I bacame successful. I can tell you trading stocks is not the way to learn. It requires a lot of money and many stocks have different DNA and act differently, so what works in one may not work in another.

I recommend opening a small futures account and trading one contract (having stops so you don't get killed) and focusing on one market. It will take you some time and you willl become frustrated before hopefully becoming successful. If you are committed, eventually, it will begin to make sense.

I firmly believe it was my belief I would be successful and the commitment to refund and try again. I recognize not everyone can do that, but you have a better chance at futures than stocks.

As one market guru says: TRADING IS SIMPLE, BUT IT'S NOT EASY.

 

[ProfitTakgFool]

Quote from dozu888:

Based on my observations and experience, profitable daytrading is achieveable, but it takes a lot of effort.

1) must spend hundreds if not thousands of hours of screen time to get to a point where one is technically proficient------->>> Absolutely true!

2) must spend another hundreds if not thousands of hours to practise psychological fitness------>>> Absolutely true!

3) market is mostly random.. it can be predicted to a very small extent. this determines that long strings of losers are inevitable and it takes incredible psychie to be able to trade thru such losing streaks.---->>> The market is mostly random but that makes it more predictable, not less. Most people just will not accept this fact and believe technical analysis is the answer. It's not. You are just analyzing random movements with the wrong tools. That's not to suggest technical analysis has no value because it does, but you have to realize you are analyzing randomness and have another set of tools for that purpose. A large string of losers is NOT inevitable if you open your mind to the fact the markets ARE random and wait for extreme price movements that travel great distances from the mean and fall in the tails of a distribution curve.

4) considering the above, daytrading is probably below average on the scale of reward/effor ratio among all the professions. True, to be a good doctor/lawyer/professional, one needs to put in just as much effort, if not more.... but at least the reward is more predictable.--------->>>> Absolutely true! However, if you can actually make it in this business you will make more money than doctors, lawyers, and other professional, Combined!

therefore, HATS OFF to those who can do it consistently. ------->>> Thank you!

 

[ProfitTakgFool]

There's nothing like throwing real money into the market to find out what you are worth but trading on a simulator let's you know that you at least, "have a chance."

I traded SIM for 2 months. Did 100% the first month, lost all of it the next month. That's when I knew I was ready.

Give me $5,000 on January 1 and I will give you back $50,000 on Dec 31st. The reward in this business is well worth all the sacrifices that have to be made -- and there are many sacrifices!

Quote from mgabriel01:

As you probably know from my other posts - Im a novice (I promoted my self from newbie this week)

My own 2 cents - and thats all it is:
I have spent the better part of 4 months analysing, testing and mainly reading --- and started trading with real $ YM intraday in January. Mainly working on one setup that has proven profitable.

I will continue to trade that one setup and work on the psychology of trading (since the setup is only a setup) while I look around for the next setup that makes sense to me


I learned more about discipline and following my own rules in the market volatility last wed than I believe I would have in 3 months of paper trading - even under the same volatility

So, like most things--- some folks may benefit from paper trading --- some may not


and yes, I am expecting my first string of losses as inevitable to temper novice enthusiasm

cheers!

 

[ProfitTakgFool]

If you want to make money trading then you have to wait until its YOUR turn. --------->>> Well Said!

Quote from Pita:

mgabriel,

you are on the right way. Stay with what is working, have a few reliable set ups that you can recognize and specialise there. You will not run after the market therewith but it will come to you. If you dont get enough trades or risk/reward is not good enough then either change the time frame or look in other markets. Most people here seemingly think that there is only one market and one needs to master it perfectly which is an impossible task. If you want to make money trading then you have to wait until its YOUR turn.

 

[ProfitTakgFool]

Dax, an edge can come in the form of many different things. You can either have a psychological edge or a technical one, or both. It just means you have some sort of advantage over other traders. It can be something as simple as your interpretation of price movement. Part of the reason most traders fail is because they look for affirmation. They need to be a "part" of something and look for others to support their views. They do this by following a trend. By the time you realize there is a trend it is probably too late to profit from it. Take a step backwards and believe there is another way. You don't need a trend, you don't need patterns, you just have to have access to a window to the market that few people choose to look through. No, you don't need a trend to develop an edge. Simple price movement can be enough:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=112126

Quote from Daxtrader:

So how does one find this so called edge? Do you sit around looking at charts until you get an "AHA!" moment? I just don't get it anymore. Can a successful day trader confirm that trading is mostly managing your risk/reward correctly? Is it mostly about taking a small string of losses and then hitting a home run?

I think a lot of members here post about being profitable but probably don't even trade.

 

[CaptainObvious]

This thread is sure to bring out the pretenders. I personally know two people that make their living day trading and neither have ever heard of Elite Trader, nor do they want to. They're too busy trading. Must be a correlation there somewhere. :eek:

 

[Vienna]

Quote from dozu888:

Based on my observations and experience, profitable daytrading is achieveable, but it takes a lot of effort.

***1) must spend hundreds if not thousands of hours of screen time to get to a point where one is technically proficient

- True

***2) must spend another hundreds if not thousands of hours to practise psychological fitness

- Perhaps, but if you have 1) covered, 2) is so much easier

***3) market is mostly random.. it can be predicted to a very small extent. this determines that long strings of losers are inevitable .......

- Completely wrong!

***4) considering the above, daytrading is probably below average on the scale of reward/effor ratio among all the professions. True, to be a good doctor/lawyer/professional, one needs to put in just as much effort, if not more.... but at least the reward is more predictable.

- Wrong too


therefore, HATS OFF to those who can do it consistently.