swing trading versus day trading

Quote from Rabbitone:

Trading is a Zero sum game?
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You tell me, where do your profits come from if not from the accounts of other traders?

Other than investing in stocks long term, any trading based on counterparty agreements (futures, FX, options, etc.) is a zero-sum game in principle, negative sum-game if other costs are factored in, like commissions, opportunity, etc.

Of course, futures trading may have a positve (or negative) impact on the economy and turn economic activity as a whole into a positve (or negative) sum-game but that is not just trading any longer. I talked about trading only.
 
Nod,

Assume every new trade placed and filled is a weak handed trade. Especially in futures compared to stocks. In stocks even weak hands can hang with a loser for years because they must pay the "full monty" up front. (many investments in stocks are trades gone wrong). Futures always have a midnight for Cinderella. In stocks their midnight is usually bankrupt court.

Weak hands are underfunded accounts, scared money, nervous Nellie types, etc, etc. Weak hands are like doggie biscuits for the big dogs, the big dogs can smell out the STOPS and gobble them up.

If SHORT and using a mental STOP LOSS place the stop BEFORE a round number where you assume more stops will be at. You will want OUT before that round number because common sense tells you it will at least go a few ticks further as the stops are hit. You want out before that happens.

If SHORT and want to get out on a winning trade you might want to try to join in on the gunning of stops be placing your stop BELOW the round number where you assume others ( longs)have placed their stops. You might get a few extra ticks by joining the fray. With that tactic you run a risk of price just missing a previous low and then backs off. But, that is really useful information because the mkt is telling you maybe price has found a value spot and no more sellers are willing to attempt to push it lower. Might just want to go "MKT" at that time and bail out.

Thats part of the fun of daytrading, it is fun, it is challenging. I have known many a person that retired rather early and most of them admire us daytraders because we have something to keep the mind working and not bored to death chasing a stupid ball. There is no time to pretend you are a whiz kid and can just place swing trades and go play golf. I love that when i see posters doing that...........dreamers, the lot of them. :D

No one answered my KEY question. Brendan will look at his puter later maybe he will tell what the difference was between 2 bad KEYS and 2 good ones last friday in ES.
 
Quote from l2tradr:

Sorry Brendan, the thread got a little long. Could you point me to the trading records you posted? I am curious.

Thanks!
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I was dragging my feet whether to post actual income. Here is a copy and paste from my prop reports. When I originally pasted it, the forum said too long / keep it under 10000 characters. Please do not mind the formating.

As you can see, I am not a big trader. I make consistent money, which is what our trading model focuses on.

Totals By Date for NWTEPIPH10
Starting Cash: 97,835.55 + Unrealized: 0.00 = 97,835.55

From 12/01/2009 to 12/31/2009
Group(s) Epiphany Trading, LLC
Export to Excel

12/01/2009
Symbol Fills Qty Gross Realized Comm Ecn Other Net Realized Unrealized Δ Total Δ Unrealized
AAPL 43 6,200 (201.80) 22.700 15.810 16.9106 (257.22) 0.00 (257.22) 0.00
AIG 133 27,400 121.49 84.940 54.095 12.7666 (30.31) 0.00 (30.31) 0.00
GS 29 3,820 19.40 13.200 9.036 8.6633 (11.50) 0.00 (11.50) 0.00
GSIT 12 6,400 111.00 20.000 21.120 0.8648 69.02 0.00 69.02 0.00
JCG 4 600 (39.00) 2.000 1.980 0.396 (43.38) 0.00 (43.38) 0.00
KMP 11 5,000 (25.00) 15.000 15.240 3.903 (59.14) 0.00 (59.14) 0.00
NLST 62 22,600 (251.60) 67.800 66.810 3.1058 (389.32) 0.00 (389.32) 0.00
OVTI 25 6,000 192.90 18.000 19.800 1.396 153.70 0.00 153.70 0.00
PLX 12 5,000 315.00 15.000 4.530 0.776 294.69 0.00 294.69 0.00
RIMM 14 4,000 191.00 12.000 0.450 3.421 175.13 0.00 175.13 0.00
SNTS 4 2,800 (88.00) 8.400 9.020 0.410 (105.83) 0.00 (105.83) 0.00
WPO 3 200 24.00 2.000 0.660 1.087 20.25 0.00 20.25 0.00
WX 12 2,544 118.92 7.632 6.8952 0.7098 103.68 0.00 103.68 0.00
Adjustments 0.00
Day Total: 364 92,564 488.31 288.672 225.446 54.410 (80.22) 0.00 (80.22) 0.00
Cash: 97,755.33 + Unrealized: 0.00 = 97,755.33
12/02/2009
Symbol Fills Qty Gross Realized Comm Ecn Other Net Realized Unrealized Δ Total Δ Unrealized
AAPL 66 9,800 456.41 32.700 19.590 26.362 377.76 0.00 377.76 0.00
AIG 23 5,800 173.50 18.150 13.020 2.657 139.67 0.00 139.67 0.00
AONE 15 2,200 15.00 8.400 6.330 0.917 (0.65) 0.00 (0.65) 0.00
ARO 2 600 45.00 2.000 1.980 0.258 40.76 0.00 40.76 0.00
BAC 41 13,000 239.00 39.400 21.990 3.1973 174.41 0.00 174.41 0.00
BIOF 3 600 (21.00) 2.000 0.450 0.135 (23.59) 0.00 (23.59) 0.00
CAGC 14 2,800 231.39 9.400 8.146 1.2234 212.62 0.00 212.62 0.00
DYAX 25 12,400 13.00 37.200 26.580 1.5126 (52.29) 0.00 (52.29) 0.00
GAME 7 3,000 (120.00) 9.000 6.090 0.593 (135.68) 0.00 (135.68) 0.00
GLD 18 2,400 16.50 7.400 4.860 3.9892 0.25 0.00 0.25 0.00
GS 13 2,000 29.00 6.500 1.680 4.403 16.42 0.00 16.42 0.00
MOS 6 800 8.00 3.200 2.640 0.694 1.47 0.00 1.47 0.00
PLX 31 7,000 425.16 21.000 23.100 1.2121 379.85 0.00 379.85 0.00
SNDA 4 400 26.00 4.000 0.878 0.432 20.69 0.00 20.69 0.00
SNTS 16 6,000 61.00 18.000 16.230 0.750 26.02 0.00 26.02 0.00
TSL 2 600 30.00 2.000 0.450 0.398 27.15 0.00 27.15 0.00
TSTC 12 3,000 102.00 9.100 9.900 0.851 82.15 0.00 82.15 0.00
XOM 8 1,400 (35.00) 4.200 1.050 1.484 (41.73) 0.00 (41.73) 0.00
Adjustments 0.00
Day Total: 306 73,800 1,694.96 233.650 164.964 51.069 1,245.28 0.00 1,245.28 0.00
Cash: 99,000.61 + Unrealized: 0.00 = 99,000.61

Forum accepts only 10,000 characters. However you get the point.

Fills Qty Gross Realized Comm Ecn Other Net Realized Unrealized Δ Total Δ Unrealized
Total: 6,222 1,476,976 16,807.26 4,612.63 3,706.25 1,117.43 7,370.95 0.00 7,370.95 0.00
Cash: 105,206.50 + Unrealized: 0.00 = 105,206.498

Total: 16,807.26

If you need more than this or would like to see me trade, send me a message privately.
 
The 5' bars following the "bad keys" had big overlap with the key.

The good keys had inmediate gratification, near zero overlap on the next bar.

Is that it?
 
".... and I think ( as bighog has mentioned) one must put in the “screen time” (5000 hours+) in order to have a chance."

I think that gets to the crux of it all.....way too many people think trading (especially daytrading) is learning a system that usually works, then emotionlessly executing that system time after time....

I've been trading for about a year at a prom firm, and starting to do pretty good. The fact is, of all the succesful traders I know (in the dozens) only one has what would be described as a "system" that works...the rest use a mixture of: experience, discipline, and their gut (for lack of a better term)

Now, I know that for many, when someone talks about "gut" or "feel" when trading, they assume it implies lack of discipline, and amateurism...IMO nothing can be furthur from the truth....I read a very interesting article about a psycologist study not long ago...if I can find it again, I'll post it....

But the summary is this: The psycologist and his staff rearranged all the letters of the alphabet and created totally new grammar rules (i.e. instead of " 'i' before 'e' except after 'c' they had'x' always come after'f'...just random stuff).....the point was this.....there were many grammar "rules" (just like there is with our language) however THEY knew the rules, but the people in the study did not......the scientists would spend hours flashing cards withvariations of these random letters (for example, they would show a card that read" XRTU PLOE JHD") and would ask the respondent if that grammar was correct, or not....if the grammar WAS correct, according to the arbitrary rules the doctors assigned, the subjects were told so. If they were wrong, they were also told.....but they were NOT told why they were wrong, or why they were right.....

Within a few months, and over hundreds of hours, something very intersting started to happen: The subjects started getting them right, until eventually, the succes rate was somewhere around 90%. What is interesting to note here is that the subjects did NOT know the rules, and even when they started getting them right, could not explain them. THey merely had a gut feeling after so many hours of looking at the cards.

THe moral is this: The human brain is far more powerful then any copmuter out there.....even if we can not consciously pick up the patterns, if we are shown the data enough times, and there IS indeed a pattern, your brain WILL pick it up. Since the amrkets are essentially the product of mass behavior and psycology, and because humans have an inherant need to create patterns, however discrete, in everything they do, it stands to reason that patterns happen in the stock markets.

THIS is why many of the best traders I know, if they're being totally honest, will say something along the lines of "I honestly don't know how I do it...I'll look at a chart and just feel that something is going to happen" and it's as simple as that.

Certainly, these traders also have parameters that need to be met before they would think about trading...they also incorporate great discipline....they are also not always right....but they are right enough so that we can logically surmise that it is not "luck"

I believe this may seem unattractive for many because it implies many hours of hard work....there is no (that I know of) magical holy grail system that if one could just learn, they could be rich beyond there wildest dreams.....

Trading, is a skill...and like all skills, the only way you can become the best is by hours and hours and hours of practice.

However this can also be good news....if you are a trader who is not doing well, don't be discouraged.....perhaps you just haven't put in enough hours ( and I am tlaking thousands of hours here) staring at charts so that your brain can subconciously detect the patterns that are most definitely there. Give yourself enough time to do so.

As I said, I've been trading for a year, and I am FAR from being at these guys level.....but I have started to notice what these guys are taling about....sometimes, a trade will just "feel" right....and while it doesn't always work out, I'm starting to see muc imporved succes rates.

I should point out that, IMO, there is no easy way to get this intutive trading skill....the only way is trading, trading, and more trading. If someone new to trading think they have this "feel" naturally, then I can asure you, you are wrong.

Certainly, there is a natural skillset that is advantageous to being a good trader: discipline, ability to control your emotions, ability to work well under stress, passion for the job etc.

But these will just give you an advantage....if you do not put in the very hard work necessairy to realize your full potential, then all that advantage will be useless.
 
Quote from robbie25:

THIS is why many of the best traders I know, if they're being totally honest, will say something along the lines of "I honestly don't know how I do it...I'll look at a chart and just feel that something is going to happen" and it's as simple as that.

As I said, I've been trading for a year, and I am FAR from being at these guys level.....but I have started to notice what these guys are taling about....sometimes, a trade will just "feel" right....and while it doesn't always work out, I'm starting to see muc imporved succes rates.
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I've been day trading for just a year and a half and haven't put in the number of hours required to really have this stuff ingrained, but my journal still contains frequent notes like this:

"Shorted DRI again @ 27.74 and covered quickly @ 27.69 for a $25 gain because I didn’t like the action. The Level II got that look to it that said “watch out” and sure enough it rallied to 28.30 just seconds after I covered."

"My initial stop was 93.00, but I exited @ 92.85 for a $170 loss, because the L2 action got “that look” to it."

"It sat there for a while and got “that look”, but I left my 56.00 stop in place to give it a chance. Then it actually dipped to 55.71 and I thought it would fall, but it rallied again, then struggled mightily for quite some time and finally took me out @ 56 for a $100 loss."

Each time the trade gets "that look", it soon moves against me. Can I tell you in precise words what "that look" is? No.
 
Exactly my point.....it's one of those things where, even though you may be frustrated and think that you're truly not getting anywhere, you are in fact learning.....

You're brain is already starting to recognize the patterns, even though you may not realize it.

I did not even realize myself until I came across the article I mentioned above, about the study of pattern recognition.....once I started thinking about it like that, I started to realize times such as you say where I just "felt" something, and it turned out to be right.

In a very similar vein, I also play guitar.....I spend about an hour or two on it every day, as I find it relaxes me and I enjoy it. I have never actually "seen" imporvement in my guitar playing...I've never picked up my guitar and say "wow, this just seems so much easier then yesterday" or "I'm a lot better then last week"......but when I watch a video my wife made of me playing a few years ago, the difference is unbelivable.

I never 'felt' like I was getting better, and I certainly never saw the gains.....but the cumulative effect of hundreds of hours of playing have indeed, made me a much better guitat player.

I suspect the same is true for yourself.....even if feels like after a year, you haven't made any gains, I am confident that were you able to go back in time and stand behind yourself trading a year ago, you would probably notice a very big difference.

Trading is no different from any other desirable skill......it is very learnable, but yes, it must be learned.
 
Quote from tradeshark:

I do better day trading/scalping, it fits my personality which is key. Overnighting stocks vs. flat at each close are different business models.
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Feel free to ask me about anything that you might have difficulty with.

Brendan P. Byrne
Trader
 
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