Study says Daytrading for a living is virtually impossible.

lovethetrade said:
Not sure what's more annoying; sceptics that don't know how to day trade or how it works claiming something can't be done or the fact that these discussions lead to nowhere because no one is willing to prove the opposing party wrong.

If you can't do it and you're not fully informed on the subject, why hold an opinion on it? Just say, I couldn't do it and I'm sceptical because it seems awfully difficult to me. People that can't do it would be better served by inquiring from others that have successfully done it rather than playing this futile game that leads to nowhere.

Furthermore, anyone with a basic understanding of stats should know that this study has no credibility and most studies on this subject are meaningless. They are good at adding fuel to the fire for academics and sceptics but not for people that understand the reality of the market; the fact that very few can do it because it requires a combination of factors that are difficult to possess and acquire and the improbability of success is not due to the competitive nature and inherent limitations of the market.
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How about you settle it big guy? Are you a successful retail daytrader? :D
 
I agree with the stats in the report. remember "emg" who said "they just lose!"? I also believe there are those who stick with it and could become part of the tiny % that actually can make a living wage from daytrading. Just that they're usually not public much less selling a trading course or educational product. Kind of like a competitive individual sport like tennis where the top few thousand can make a living at doing it with at least healthy satellite or challenger tour performance, but only a few will ever make it or continue to sustain it for a full time (paying) career to some degree.
 
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As a broker who observed/ observes many clients over the years, I can share that traders who try to combine diff. strategies do better overall than those who are strictly day-traders.

Examples maybe day traders who also use weekly options or swing traders who add diff. option strategies etc.
 
Cannon_Trading said:
As a broker who observed/ observes many clients over the years, I can share that traders who try to combine diff. strategies do better overall than those who are strictly day-traders.

Examples maybe day traders who also use weekly options or swing traders who add diff. option strategies etc.
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Hi Ilan,

if I may ask, and this is by no means targeted at your firm, but the retail brokerage biz in general, is the say average holding period a significant (or not) contributing element to retail profitability? How prevalent is spread trading compared to outright amongst retail clients? Again, only interested in the general retail sector, not your firm. Thanks,
 
bd10 said:
Hi Ilan,

if I may ask, and this is by no means targeted at your firm, but the retail brokerage biz in general, is the say average holding period a significant (or not) contributing element to retail profitability? How prevalent is spread trading compared to outright amongst retail clients? Again, only interested in the general retail sector, not your firm. Thanks,
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Excellent pointers!

Not much spread trading if at all among the retail part for us, over 60% of what i consider pro traders do use spread trading with us.

Also from the retail part not many will do HFT "properly" and use too much discretionary trading where one can easily decide to break one own rules....

So yes - your question/ comment is excellent because just for example the two factors you mentioned can help separate the success rate.....

Obviously there is more to it like the tools you use, who enforces the rules you need to follow, trading costs....
 
That's interesting! Based on what I have seen first hand in the softs trade, merchant houses are by definition basis/spread players. This is the bread and butter, the very core of the business. Buy physical sell forward, and views are taken on relative value, ye olde basis trade. There were some trade houses/exporters that were punting outright and took huge bets which went sour eventually. So I personally think, trading spreads can be very attractive and looking at the margining structure at the Merc, they can be incredibly capital efficient and by extension low volatility plays.
 
Cannon_Trading said:
As a broker who observed/ observes many clients over the years, I can share that traders who try to combine diff. strategies do better overall than those who are strictly day-traders.

Examples maybe day traders who also use weekly options or swing traders who add diff. option strategies etc.
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what if I'm using a proprietary ALGO SHMALGO thingie at your firm? Do I do better? :D
 
bbpp said:
The worst retail traders are a lot worse than the worst pro traders.
The best retail traders are a lot better than the best pro traders.
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Where did you get that statistics from? Can you share your finding with us?

Thanks.
 
Cannon_Trading said:
As a broker who observed/ observes many clients over the years, I can share that traders who try to combine diff. strategies do better overall than those who are strictly day-traders.

Examples maybe day traders who also use weekly options or swing traders who add diff. option strategies etc.
More...
Do you have statistics within your company on how profitable were your company's clients who day traded?

Thank you for your answer in advance.
 
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