Two Questions For Practicing Day Traders

I

ironchef

Early this year, I decided to give day trading another look, first picked trend following, backtested, next paper traded and finally went live two weeks ago with scaled down sizes. It is too early to tell if the method has positive expectancy.

I have a couple of questions for practicing day traders on ET:

1. How many trades a day do you make on average?

I know the answer depends on your style. I appreciate it if you guys can give me, a wannabe trend trader, some guidance.

2. What is your profit expectation?

My three months paper trades showed 1.2% profit a day, on average. That is 300% a year without compounding! What is a realistic annual return?

As a frame of reference, for the last decade, my stock portfolio only achieved several percentages in CAGR above SP500 and my options only a few percentages CAGR above my portfolio.

Thank you in advance.
 
You should be able to correlate the "correct number" of trades per day to the system you are using. If you cannot, then you are not on a good footing to do anymore trading, live or otherwise with that system.

It is OK for someone super experienced to have some variability based on the more macro (i.e. daily time frame) state of the market, e.g. the 200 MA bounce like today (dead cat or otherwise).

But they will deviate from a norm. You do not know the norm, so that is a red flag. Find the norm, BASED ON A SYSTEM not on your inexperienced intuition or gut feel, is my council.

Feel free to ignore, and go macho, head strong into it. IMO, eventually, it will cause problems and then you will reset, and then follow the advice. Save yourself, one blow up or near blow up, or most likely, a "all prior profits vaporize" cycle and establish what constitutes a proper set of rules.

BTW: Two weeks is enough to get a general feel for how many trades should be put on. More time will not yield an answer if system is plagued with randomness.
 
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Bad_Badness said:
You should be able to correlate the "correct number" of trades per day to the system you are using. If you cannot, then you are not on a good footing to do anymore trading, live or otherwise with that system.

It is OK for someone super experienced to have some variability based on the more macro (i.e. daily time frame) state of the market, e.g. the 200 MA bounce like today (dead cat or otherwise).

But they will deviate from a norm. You do not know the norm, so that is a red flag. Find the norm, BASED ON A SYSTEM not on your inexperienced intuition or gut feel, is my council.

Feel free to ignore, and go macho, head strong into it. IMO, eventually, it will cause problems and then you will reset, and then follow the advice. Save yourself, one blow up or near blow up, or most likely, a "all prior profits vaporize" cycle and establish what constitutes a proper set of rules.
More...
Thank you for your counsel. Very insightful sir.

In live trades, I averaged about 25 per day whereas in paper, about 15. You are right about a general feel and your judgement is spot on.

The reason for over trade was like fishing, a desire to "catch the big one". Often ended up catching a bunch of losses instead.

Bad_Badness said:
BTW: Two weeks is enough to get a general feel for how many trades should be put on. More time will not yield an answer if system is plagued with randomness.
More...

Thanks. I appreciate your insights.

In the last two days, I already cut my daily trades to < 10 and did the rest on paper as practicing trades. Didn't catch any "big one" live but also didn't incur big losses and were profitable.
 
1. How many trades a day do you make on average?
2. What is your profit expectation?
More...

Not sure how another traders daily avg trades/profit expectation
will help you personally make progress.

Asking another climber for a pair of ice skates might
not help you climb Mt Everest.

Since you stated you're trying to follow trends.
I'll recommend a book that's been important in
my development when dealing with Trends.

You might find it helpful.

Screenshot_12.png
 
mikeriley said:
Not sure how another traders daily avg trades/profit expectation
will help you personally make progress.

Asking another climber for a pair of ice skates might
not help you climb Mt Everest.

Since you stated you're trying to follow trends.
I'll recommend a book that's been important in
my development when dealing with Trends.

You might find it helpful.

View attachment 324619
More...
Thanks.
 
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