Study says Daytrading for a living is virtually impossible.

El OchoCinco said:
Using a limited sample survey of new retail day traders in Brazil (who do not make up a representative sample of all daytraders to begin with) to determine day trading is impossible.

I said this several times. the study hypes how detailed it looked at the data but every study falls under the garbage in/garbage out model. Does not matter how closely you look at the data, if your conclusion is arbitrary and based on limited subsets then any general conclusion reached on the entire population is flawed.
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LOL.
Need to give up arguing with those who have no basic logic.
 
lentus said:
1. Almost every study is limited sample. And it's a nice, big, statistically significant sample here.

2. You have a point about retail vs non-retail but do you think Citadel will let researchers study their shit? If you want you can change the conclusion to "retail daytrading impossible". That's fine.

3. It's not impossible according to the study. 3% won but meager amounts. Impossible is the word used by those discussing the study to make sound more entertaining.
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No shit every study is a limited sample, so the conclusions need to be limited to those derived from the limited samples. Otherwise there is no statistical significance to link the data to the conclusion. Have you ever taken econometrics?

What were the returns of the traders in Year 2, 3, 4, and 5? Right...was not included.

Why were only NEW retail traders included and NOT all those engaged in day trading? Right...because it did not fit the conclusion bias of the study.

Why did the study not quantify gains v. account size to determine more realistic account performance of day traders? Because would require too much work to do and go against conclusion bias.

Why did the study not break down the new retail day traders into groups based on whether they were COMPLETE Newbies to trading all together or were also long-term traders or swing traders moving into day trading? Makes a big difference. Any complete newbie to something with Zero prior background in anything related to the topic is going to fail initially. A 3rd grader could deduct that. Right because that would be too intelligent for classifying the groups in the sample set.

I could go on and on.

The conclusions reached were based on a flawed sampling and lack of thorough analysis of the population studied. A statistics 101 student could identify numerous flaws.

Non-retail v. retail - I am not the one that conducted the study so why not question the mentally challenged Ph.d students who decided to limit this to NEW RETAIL TRADERS to make a general conclusion? I don't need to change the conclusion, I did not write the @#$%ing report? Seriously? You go around changing the conclusions of reports to correct them? Nice to have that amount of time rather than simply find all the flaws that are glaring.
 
Brilliantly written El OchoCinco re conclusion bias/sampling; you're right. I'm surprised the thread is still active.

The only valid inference that could be made is sample-dependent; eg "most new brazilian futures daytraders fail". Which may be depressing to all 3 of them on the forum lol. Has limited/no applicability to other markets, whose charts are Totally different, like NASDAQ/NYSE stocks.

Look at a brazilian futures chart vs ES or MU/AMD/SQQQ/FRAN/AAPL etc. Apples vs tamales.

Isn't that obvious to any smart person?

The title of this dumb af thread Should be "
Study says Daytrading Brazilian Futures for a living is virtually impossible with inexperienced newbies.

(-mic drop-) I walk offstage lol
 
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I don't know why the authors of this article had the chance to work on better data and preferred to not do that. Most successful retail traders do not play with mini-ibovespa (0.2BRL per point), they mostly work on mini-dollar (that's 10BRL per point) or on the normal dollar contract (50BRL per point).

Also, in the first edition of this study, they made the same math on the same sample for the mini-dollar contracts and the results were a bit different: 17% of those who continued trading - for more than 300 days - didn't lose out.
 
I don't dispute the statistics (although I have known Economics Professors who were as likely to interpret statistics as incorrectly as the Psychology research field has recently been shown to have done).

My issue is two things:

- descomprimindo asked, "who makes consistent money on minis?" and this one is worth about 5c US per point so its probably the wrong group within which to look for winners

- its an interesting but unsurprising result on which to get ones degree (most new people trading penny a point eminis can't overcome slippage & commission) but the real question for traders is probably, "what proportion of people profitable in one year are profitable in following years (and it probably needs to move to the contract such Brazilians actually trade)?"
 
Why is everyone getting so upset about this daytrade paper? If you've been day trading for years and are profitable, you can keep stumm and rest assured you belong to the lucky few who made it. If you're on the outset of giving day trading a chance, you got something to really think about and it could save you a money and heartache. So, it's a win-win in my eyes.
 
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