In all due respect Handle, I often wonder about it myself. It is a damn challenging intellectual exercise to try figure things out.
Short term trading is a negative sum game (zero sum to the counter parties - commissions and slippage) so we cannot all be profitable. Also, short term the market is "almost random". If the market is completely random, then it is like gambling, no day traders can consistently make money. But there are some non random components there and so there are a few, like yourself who figured it out and can consistently make money. But not all of the traders can make money trading, even if it were the same players day in and day out, like a poker tournament.
The following chart tells the story:
View attachment 169014
The green histogram is a random distribution of the 1 day price distribution whereas the small red histogram depicts the actual SPY histogram that is different from complete randomness. The SPY behavior is not completely random but the differences are awfully small and I for one am not smart enough to figure out how to exploit it and find a consistent winning day trading strategy.
I welcome your comments.
Best wishes.
I often think chaos and randomness are same, early on I understood I am intelligent in some things and trading was not one of them, but growing up I was able to see patterns well and why charts made sense to me, I could define a pattern then test it, I could define patterns and study them in relationship to price, so if price made one direction, indicator should make same pattern and when they were divergent, THEN I often had found something that few might not have discovered. Very long lonely life and being happy to research patterns. I spent years not understanding much of day trading, nothing worked, cause I didn't understand how price worked. I understand the huge PAIN people go through to learn how to trade, it is like counting cells in a pool of water, small gains that are like nothing in that pool. You struggle through your fears of never overcoming....In my case, I learned last of why price moves as it does and learned first how to slowly get better, am still learning.
I grew up where quitting was not an option and to lose was failure, so painfully I developed methods where I simple needed ways where I didn't feel like shit as losses mentally fucked me up and think of profits second. I still feel the distain on my Father's face when I brought home a B+ as that is not an "A". All the psycho babble will never work on what happened in early child development, so you either find methods you can live or you keep working. Maybe that is what is needed to become more than most, I don't know, but it is a life of working for that "A".
I understand about random distribution but there are ways to put percentages on your side, as the graph you display s based on whole day or one minute bar? ahhh and each bar is different to one bar ago regarding highs/lows, open/close and volume/indicators, each has a past of history that will sway on one side of 50/50 to other side, edge all seem to believe in.
You get to some point where exchange and broker making more than you, then rent a seat so fees are smaller. Net $80 a day and build up lots to fifty.
We can discuss randomness all day like TA, all semantics, to me Scalping is no harder or easier than making systems where you go for homerun swings, but I only know 2 guys on this forum who very consistently make them. But what we have is a "bell" curve of profitability, those are at the ends are good at the game and those in middle are trying to get to the end for day trading. Trading stocks longer term is so much easier, there is natural direction of going up.
Ever wonder why exchanges make it so easier for a anyone with few thousand to open an account? THEY KNOW most going to be short lived and will lose to experienced and exchanges need money to, brokers are bookies only better, they get a piece on each side regardless if you make/lose. People no good at betting red/black.
