Retail traders can outperform hedge funds just not at scale

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benben245

The primary reason money managers say day trading is impossible, sans the obvious moral hazard, is due to economies of scale against daily floats. Retail traders have an enormous advantage managing accounts up to 5-10 million in trading relative to the viable churn of equities and their respective daily volume. If your managing 100 million, at scale, you have to hold longer and are more susceptible to market conditions and overall index performance. With less money you can invariably move within moving averages, price action and volatility more easily.
 
I fear I cannot answer this question without indicting myself with a priapism of snobbery and detachment from the gentry. Will you gentlemen afford me latitude and character protections should I explain?
 
benben245 said:
I fear I cannot answer this question without indicting myself with a priapism of snobbery and detachment from the gentry. Will you gentlemen afford me latitude and character protections should I explain?
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Of course, good Sir! Explain away! :D
 
Well to put it bluntly, I wish I began trading with less monies. I used to play no limit holdem quite regularly online and when it was banned in the U.S. I was forced to filth with the decay of western society ala brick and mortar casinos. Derelicts and destitute aside I made great friendships and I tip my hat at those that can regularly beat 10/25 NLHE and above surrounded by such depressive tapestries for I could not. I have found that there is a definitive line to achieve a standard of living in the upper five to low six figures after taxes in trading that at a minimum requires 100-250k, this includes margin. To maintain adequate position sizing( penny stocks do not apply) while affording fees, 4.95 per trade, tax implications and losses while protecting yourself against trades above 15-20 percent of your proverbial 'roll' I feel most active weekly traders must have the aforementioned. Now throw in act 20 and act 22 via Puerto Rico this changes. It also changes in foreign markets say for example Asian equity markets that can move faster than forex.
 
Robert Morse said:
I would not describe an account over$1mm as retail. I guess we all have our own definition.
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$1m was a huge amount 20-30 years ago. With decades of inflation, $1m is an achievable sum by upper-income individuals who have good financial habits with >15 years of work experience. I would still classify $1m AUM as retail investor.
 
benben245 said:
The primary reason money managers say day trading is impossible, sans the obvious moral hazard, is due to economies of scale against daily floats. Retail traders have an enormous advantage managing accounts up to 5-10 million in trading relative to the viable churn of equities and their respective daily volume. If your managing 100 million, at scale, you have to hold longer and are more susceptible to market conditions and overall index performance. With less money you can invariably move within moving averages, price action and volatility more easily.
More...


S&P emini can handle 1000 lot like a champ during 90% of rth so what's the excuse now on trading 100 mil notational ?
 
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