Daytrading expectations

Millionaire
Registered: Mar 2009
Posts: 306

 

05-18-11 07:19 PM

Day trading is still viable if you know what you are doing.

Failed traders are either under capitalised, have unrealistic expectations, or have no market edge, or no understanding of the draw downs that may occur even with a good system..

Day traders should be looking to make annual returns in the 20% to 100% range, instead most day traders are looking to make between 200% and 1000%.

This also makes the game 10 times mentally harder than it should be, ie you will be more likely to lose discipline.

As a day trader, risk at most 0.5% of your account on each trade. You can lose 10 times in a row and still be only down less than 5% in total.

And make sure your average winner is bigger than your average loss, don't eat like a bird and shit like an elephant. And make sure you have a long term positive expectation trading method.

 

 

PhiliC
Registered: Jun 2007
Posts: 53

 

05-19-11 10:01 PM

Interesting thread. Hood makes a lot of good points. I agree w/ him for the most part. Day trading stocks is brutal..Its pure speculation and when those algo machines get a hold of a stock forget it. Most so called day traders are indeed fooling themselves because it is gambling. I've been in the markets 25 years -- made every mistake imaginable. I'm an attorney and RIA so Im no dummy., rookie, or guy who doesn't get it. I also floor traded futures in my younger days.

I do day trade futures (I don't touch the EM so that tells you something). I warn you -- it's a grind. You wont find it in the books. Its not in there. The key is how you handle the futures platform and what to look for. You're saying -- another guru chat room joker. I don't aspire to be like that Jellies guy who is after innocents' $. This is why. I paid my dues where those chat room guys didn't. that's their problem. They don't know what they are doing - trust me.

Of those who are taught -- some will get hammered I expect. This isn't the holy grail. I despise unscrupulous promoters. Students will be expected to sign disclosure forms and file applications for acceptance. Will also be interviewed by me. All applicants will not be accepted. Also I'm going to stay with the students for 3mos on line where they watch me execute and we trade together. Trading comes down to two categories. I. Learning how to make money. II, Learning how to Keep it. The second part is the toughest. The first class will cost around 3K until I can gauge how it works. Get the kinks out, etc... The first group will be my test subjects one might say. Why am I charging? I'll be in my fifties and I believe I earned that right from a lifetime of this shi*. Plus I like making risk free money. The older you get the less romantic is the idea of risk.

As far as I can tell, my techniques are unique.. developed by trial and error. The trip wasn't a pretty one I can tell you. And No -- day trading is not a business like running a law practice or grocery store. The element of "what will happen in the future" is the bogie man over hanging the trader. Unfortunately for us the future is unknowable. In a real business the outcome of the future isn't hanging over your head minute by minute, hour by hour. That's why its highly speculative.

Sorry to stray, but been thinking of this idea for a while. I'm just throwing this out there -- don't bombard me w/ questions. I'm not ready to stat the program now.


Problem w/ stock Day traders:

1. they are the sleimels of the industry. Most of em don't understand any theory, how to read a balance sheet, etc..

2. They don't understand that the real money is made in the big swing. Why in the world anyone would want to jump in and out everyday is idiotic and makes no sense. To me anyway. If someone can do that over a long period of time -- power to ya.

3. They are un-credentialed. Hardly any day traders have passed the series 65 or 7. Day traders can't have client's on the side as an investment advisor because they don't know how to invest. Investment doesn't seem to compute w/ these guys. Plus they aren't taken seriously except by their own community.

4. Why don't you guys set up as investment advisors and earn fees on the side. No brainer, Right.

5. The term day-trader is demeaning. It reminds people of Cramer for the most part even though even he isn't stupid enough to day trade.

6. You may find a contradiction that I day trade futures but find the term demeaning. True so do I. I call myself an investment advisor, because I am one. Plus it is much more respectful in the professional world.

7. Avoided the minor trend like the plague.

8. Im sorry for being so harsh. But just like Hood it may make some of you think hard about your beliefs. I don't mean to be but just making a few points and thinking about some guys I know who call themselves day traders. These guys are real nit wits. I won't associate with them. They don't understand Dow theory, Value investing, capital markets, interest rates. They know almost nothing.

Hood sounds like he didn't have the proper training or knowledge. A gamblers mentality with no comprehension of position sizing. Had my rant for a-while.

 

 

People do what they like to do, and if not, theyґre just someone else slaves (boss, society, wife, etc), because all their life they will be just doing things that OTHER people wants them to do. They will always do what people think is "correct" or "respectable" , and NEVER EVER will be free from that.

 

 

 

James
Registered: Nov 2008
Posts: 22

 

07-26-11 05:56 AM

I think NYCHood had a gambling problem and didn't understand risk management.

To new traders...this could of course happen to you. And I recommend NOT quitting your job to be a daytrader (or whatever). My advice is:

1) Find a system that gives you an edge...this isn't as difficult as it seems (there are many things out there) and isn't the most important.
2) Don't feel mortified if you lose sometimes (treat trading almost like a lottery--who gets depressed and discouraged if they don't win the lottery?)
3) Your system doesn't PREDICT anything it just increases your chances.
4)MOST IMPORTANT: Size your trades to levels that does not make your heart pound with every tick. Put a trade on with a clear defined set up (like where do I get out?) and just let it go. If 1000 shares of something makes you nervous and you will get upset about losing your stop's worth, then lower it to 500 or 100 shares...yes you won't make as much but you will be more effective. Also if futures are too risky for you then go to forex or stocks (least risky).

You want to be an EFFECTIVE and CONSISTENT trader. You don't want to strike it rich. The latter will lead to ruin and is for INVESTING. To be effective/consistent you need an edge and you need to have a clear head with clear defined entry and exit points. If this means that you have to trade only 100 dollars then so be it...