"the daytrader is dead" - AMTD CEO

gaj · Dec 30, 2003

thus spoke joe moglia, ceo of ameritrade, who was on cnbc this morning.

said:
1) the avg ameritrade customer does 14 trades a year.
2) he believes 95% of the people who daytraded in 99/00 blew themselves out.

he said "daytraders make 200-300 trades *a day*".

i can't think of one daytrader who'd be on ameritrade to daytrade. maybe the company they bought (datek), but definitely NOT ameritrade. i don't make anywhere near 200 trades a day, am definitely a daytrader, and would never, *ever* consider ameritrade as my broker.

Cheese · Dec 30, 2003

Perhaps Joe should stay CEO of Ameritrade since he doesn't know what daytrading is.

Its not the number of trades; its that you always close all your positions, whether one or many, by the close of business each day .. nothing carried overnight. Thats daytrading.

abogdan · Dec 30, 2003

This industry is still full of dinosaurs that have lost their touch with current technology, trading models and even definitions. I have met one of the executives of Charles Schwab personally and was amazed by his stupidity. But for us, traders it is just another obstacle - to deal with all of these morons! Just for reference I have been day trading since 1993. I have started when Trade Station was a nightmare and people like Ken Robbins were teaching us the "art".
Yes, I have lost money at the beginning! I've lost more than I could afford. It took me three years to get back and pay my debts.
I paid well for my lessons. But, on the end, it was worth it.
In my opinion, true day traders are alive and kicking and who ever is left us is fly-by-night - get-rich-quick kind of scam any way!

Copernicus · Dec 30, 2003

its theses mooks from ameritrade schwab etc that give this profession a bad name.

DT-waw · Dec 30, 2003

Quote from abogdan:

This industry is still full of dinosaurs that have lost their touch with current technology, trading models and even definitions. I have met one of the executives of Charles Schwab personally and was amazed by his stupidity. But for us, traders it is just another obstacle - to deal with all of these morons!

True, true, true... same situation in Poland.

daliddleguy · Dec 30, 2003

Don't be too hard on him, in the global sense, the species (daytraders) is much closer to extinction than at any time in the last ten years.

I remember in 2000 my chiropractor begged me to tell him how to daytrade, ditto for my dentist, barber, gardener, a carpenter I hired, my brother-in-law, a guy who works in natural gas, a guy I met at the gym etc etc etc.

Now if I mention I am a daytrader people react like I have a Sexually Transmitted Disease.

There will always be diehards like us, but "daytrader" as we knew him in 1999 and 2000, before pattern daytrading rules and all that: that sub-species that ran around in that frenzy... is dead.

Davo · Dec 31, 2003

gaj,

I'm new relatively new to daytrading and I have my account with Ameritrade. They seem to be OK but I don't know what to compare them to (?).

What is the advantage of switching to a direct access broker for daytrading stocks?? I would certainly appreciate any advice from anyone out there.

Thanks!

Andy62279 · Dec 31, 2003

Quote from Davo:

gaj,

I'm new relatively new to daytrading and I have my account with Ameritrade. They seem to be OK but I don't know what to compare them to (?).

What is the advantage of switching to a direct access broker for daytrading stocks?? I would certainly appreciate any advice from anyone out there.

Thanks!

speed and transaction costs

harrytrader · Dec 31, 2003

You think you have learned your lessons ... that's the great error because you shouldn't have learned all lessons notably about some very rare events you only encounter in 10 or 20 years of a carreer

. The number of daytraders just follow market's cycle: when market is up their number is up. Those who have more experience and have learned the lessons will eat the newbies that are constantly arriving and risk to be eaten themselves much later by the bigger and more experienced ones ... when they think they have learned ALL the lessons

. Newbies (especially with "superabundant gullibility") are necessary for bubbles :

http://www.elitetrader.com/vb/showthread.php?s=&threadid=26426

"Market's Buble, interest rate and population's rate growth studies by economists
From the book "Financial market and modelisation of stock market's return" - a doctorate thesis only in french - it is said that two researchers have shown that on markets where the number of unlimited life agents is finished rational bubble can only appear if there are entries of new agents. An another researcher has built upon more realistic basis an imbricated generation model with finite horizons and has obtained the interesting result that the condition for a bubble to appear is that the rate growth of population must be superior to the long term real interest rate.

This explains the well known fact that stock market follows demography fondamentally (at long term). Also this could explain why futures industry and stock market in general need ... a great number of newbies pigeons - all the more so that real interest rate is high which shows that the interest rate is not neutral in the intensity of the phenomena."

Quote from abogdan:

Yes, I have lost money at the beginning! I've lost more than I could afford. It took me three years to get back and pay my debts.
I paid well for my lessons. But, on the end, it was worth it.
In my opinion, true day traders are alive and kicking and who ever is left us is fly-by-night - get-rich-quick kind of scam any way!

North Pesos · Dec 31, 2003

Quote from harrytrader:

... interesting result that the condition for a bubble to appear is that the rate growth of population must be superior to the long term real interest rate....

I have some doubt about that, the occidental rate growth are well below the interest rate since many years (decades) and we have seen some bubbles.