I find the Daily charts respect price levels more often than intraday. The only way I will day trade is if I am momentum scalping order-flow with footprint charts and automated entry execution. To do this I'd probably want to trade 10+ contracts to make it worthwhile for such short-term holding periods.
Why market wizards are not day traders?
- Thread starter mr_byte31
- Start date
The Market Wizards series did feature some intra-day traders & hybrids. I believe they all worked for prop shops or ran their own hedge funds.
Here is an excerpt from an interview Zero Hedge did with Jack Schwagger on retail day trading.
ET: What about timeframes? It seems longer is better for the smaller investor.
JS: Not necessarily. That depends on the individual methodology of each trader. However, if you are thinking in terms of conventional things like trend following, then you are correct.
I think I had in the original edition of the book, but is certainly there in the current edition, the concept that longer trends are more reliable. In other words, longer term crossovers perform better than shorter term ones. And there’s a very good reason for that: they are very difficult to trade. Markets tend to punish traders who employ easier approaches and reward those willing to suffer some pain.
The idea is that yes, when you use a long term approach it is true that you are getting in much later on a trend and you also surrender a much larger portion of open profits when you are right - and not many people are willing to go there since both are painful things. However, it is also true that shorter term systems give you so many back and forth whipsaws – and you can test this empirically over time like I did – that on balance you are worse off. Those whipsaws more than offset the larger gains from getting in earlier and the smaller surrender of profits from getting out earlier.
In that sense trading over a longer horizon has more efficacy, but emotionally it is a very difficult thing to do.
end ...
My own observation/opinion is that most pro traders that had long track records of profits for many years as intra-day traders lost their edge when HFTs burst onto the scene around 2005. The majority of them that continued to trade intra-day adapted to a lower trading frequency with a longer holding time. A rare few with very deep pockets became HFTs themselves.
Here is an excerpt from an interview Zero Hedge did with Jack Schwagger on retail day trading.
ET: What about timeframes? It seems longer is better for the smaller investor.
JS: Not necessarily. That depends on the individual methodology of each trader. However, if you are thinking in terms of conventional things like trend following, then you are correct.
I think I had in the original edition of the book, but is certainly there in the current edition, the concept that longer trends are more reliable. In other words, longer term crossovers perform better than shorter term ones. And there’s a very good reason for that: they are very difficult to trade. Markets tend to punish traders who employ easier approaches and reward those willing to suffer some pain.
The idea is that yes, when you use a long term approach it is true that you are getting in much later on a trend and you also surrender a much larger portion of open profits when you are right - and not many people are willing to go there since both are painful things. However, it is also true that shorter term systems give you so many back and forth whipsaws – and you can test this empirically over time like I did – that on balance you are worse off. Those whipsaws more than offset the larger gains from getting in earlier and the smaller surrender of profits from getting out earlier.
In that sense trading over a longer horizon has more efficacy, but emotionally it is a very difficult thing to do.
end ...
My own observation/opinion is that most pro traders that had long track records of profits for many years as intra-day traders lost their edge when HFTs burst onto the scene around 2005. The majority of them that continued to trade intra-day adapted to a lower trading frequency with a longer holding time. A rare few with very deep pockets became HFTs themselves.
IMHO, the shorter the timeframe, the harder it is to be profitable. I believe there are more successful swing traders than daytraders. Trends need time to develop. I'm not saying that are not successful daytraders, just that I think it's more difficult.
Exactly, that's why I always tell that daytrading is NOT simple.
In august my average net profit per winning trade was 8.23 points, and I never have a position overnight. For me that proofs that there are intraday trends too that have huge potential. Problem is how to catch them. That's why only few traders are succesful intraday. But if you succeed, the rewards are much higher then any other type of trading.
I want to be able to act when the signal is there. While I am sleeping I cannot act. So letting mature overnight might result in giving away all the profits from the previous day.
Trends can persist, trends can reverse.
It is about risk management and a good light sleep, not lack of funds.
overnight hold = uncontrollable risk, way outside intraday's parameters
Its increased risk, not uncontrolled unless people wish to not control it. I'm sure all the daytraders who went broke in the last 12 months thought they were doing the right thing by avoiding the risk of overnight holding.
Seriously, I have to bet that most new traders think the only form of trading worth trying is daytrading. And 90% of all new traders go broke inside their first year. Maybe, maybe there's some connection?.........
one can not control overnight risk. period
it can be accepted, but nothing one can do if position will half overnight
this will not happen during the day