Serious question: What makes a successful daytrader? Is it consistent daily wins, or more wins?

Steven, if you are up 11K in a week and then lose it all you are not in control of your trading as you are risking way too much (unless your account is in the 100Ks range) you are using too much leverage and you are making too much.

I think you need to slow down and focus on keeping the (lesser) money you make instead of trying to make more. CONSISTENCY is a key indicator to tell you if you are in control of your trading and if you are managing the risk properly.

Anyone can make money trading it is super easy, the difficult part is keeping the money you make!!!
 
A succesful daytrader:

- Has a clear proven plan
- One he follows with tremendous discipline
- Exploits no cost leverage while keeping risk at bay at all times
- Has positive expectancy and does not let losing days or losing trades affect him
- is very much aware of mathematical probability and knows extended losing streaks are possible and will happen, therefore he or she is extremely prudent with his position size in relation to his capital
- knows he never really knows the outcome of any trade
- takes all valid signals

Those things come to mind.
 
I agree with what people are saying here about consistency vs gambling. If you are trying to have one hit and be done, that is gambling. If you want to trade for a living you have to be consistent on a larger timeframe.

I think there are only two options for this:

- small losses, outsized gains - net profit
- higher win rate, smaller gains - net profit

I strongly believe in the first, as it indicates you know what you are doing. You know what a good trade is for you that is likely to be successful and you are large size on it and you skip the rest. If you’re wrong, you’re out right away.

To the OP I would suggest a giveback rule. If you’re up X on the day and give back 25%, shut it off and lock in the profit. And same for weekly.

Yes this cuts off potentially infinite upside gains but is worth it because it creates consistency. Once you are consistent you can size up your positions and make more, and then you are trading properly.
 
tommo said:
Its about consistency.
More...

Its about the discipline..., patience..., and routine - of the trader - which creates the consistency

Trader must bring these qualities to bear every day..., every trade - no exceptions

The mkt otoh..., starts out each day in who the hell knows what mood..., then progresses though that session exactly as it sees fit



Steven W said:
What makes a successful daytrader? Is it consistent daily wins, or more wins than losses at the end of the month? When is it time to call it quits?
I was up 11k this week, only to lose it all and then some shorting today. My year to date profit chart looks like a heart rate chart, some days I'll be up 2k, then lose it the next day. It is rarely consistent wins (I'll say I will be green 50% of the days, coin flip really), but usually, I'll end the month up, but only by like $300 or so. Then there are days like today, where I was up 11k this week by winning 4 days in a row, only to lose all my profits and my own cash today. It's been like this for 2 years, haven't blown up my account yet, but it feels stagnant like I cannot control my outcome. What is frustrating for me is not losing money, but the realization that my dream career may be out of my grasp. That is what hit me the hardest.
More...


So obviously your approach / methodology makes money - good

You.., the trader..., are having issues holding onto the money / consistently applying your approach / methodology - not good

=====================

I posted this in a friends journal awhile back:

A person can live their entire life (literally birth to death) - and never need to call upon the discipline..., patience..., sameness (routine) it takes to trade successfully

Not once..., not repeatedly..., not ever
More...




First stage of trading is mechanical - if one is to ever to progress past the boom then bust stage (sound familiar OP)

One must absolutely get this stage down cold

===============

There also this little ditty about risk and uncertainty - and that if one truly embraced these - would mandate one manage each trade..., and keep each loss small

But hell..., what do I know anyway

==============================

Just a little something to ponder Sir

or not

As it tis truly..., and always - a choice

RN
 
Absolutely agree w/ Redneck...mechanically follow rules...your rules, not mine.
We all know what works and what doesn't for each of us. So do I follow my rules? If I don't, usually a loss. So very important to nail this point into the brain.

Na zdrowie,
Tim
 
i was told Consistency is important [although that's not my particular style]

i've also read that,
there's more than one way to make money in the markets
[which could mean find your own particular niche]

i learned a few things trading along side other full time professionals

marc
:cool:
 
Steven W said:
What makes a successful daytrader? Is it consistent daily wins, or more wins than losses at the end of the month? When is it time to call it quits?
I was up 11k this week, only to lose it all and then some shorting today. My year to date profit chart looks like a heart rate chart, some days I'll be up 2k, then lose it the next day. It is rarely consistent wins (I'll say I will be green 50% of the days, coin flip really), but usually, I'll end the month up, but only by like $300 or so. Then there are days like today, where I was up 11k this week by winning 4 days in a row, only to lose all my profits and my own cash today. It's been like this for 2 years, haven't blown up my account yet, but it feels stagnant like I cannot control my outcome. What is frustrating for me is not losing money, but the realization that my dream career may be out of my grasp. That is what hit me the hardest.
More...

Use Simple Trading Rules and your success will change. Here are a few of mine.

Have a good risk to reward ratio, risking 1 point and making at least 1 with a potential to make 3. Trades that make less than the 1:1 are not going to be profitable in the long run.

Trade stocks that have a high probability of directional bias for whatever time frame you plan to be in. If Day Trading 5 min charts tell the story but not the whole story.

Analyze larger time frames but enter and exit off the short time frames. (1 min & 5min)

Personally I limit my losses using a Stop so I never have high risk on any one trade. I never risk more than 10 points on a trade. If I've entered to early or the trade went against me, I'm out with a small loss. I can get back if the trade still looks good without a lot of risk. Once I'm in the money with 15 to 20 points, I move my stop to break even and keep moving it incrementally or use a traling stop to lock in profits.
 
ETcallhome said:
just because I am up 11k on THU doesn't mean I may not lose it all or more on Fri. That's what it is there for. To trade. If you don't want to trade, just take an 11k profit and quit trading for the week? Then what?
More...
reassess whether you were lucky or skillful. it is not uncommon to give back a substantial portion because of overconfidence i.e. violation of ones trading rules etc.
 
Last edited:
TraderDave said:
Personally I limit my losses using a Stop so I never have high risk on any one trade. I never risk more than 10 points on a trade. If I've entered to early or the trade went against me, I'm out with a small loss. I can get back if the trade still looks good without a lot of risk. Once I'm in the money with 15 to 20 points, I move my stop to break even and keep moving it incrementally or use a traling stop to lock in profits.
More...
If you placed a stop order, you would have to cancel it first if you want to close your position, right? What are 10 points exactly? 10 cents? 10%?

I find this thread very interesting, hope my beginner questions don't highjack it, sorry.
 
You must log in or register to reply here.
Back
Top