I am not a Daytrader but i guess without winners there is no daytrading.

But do you need Daytrading, maybee normal trading and investing is enough .

Its more complicate to reach high goals than to reach low goals.

I would say 10% / year is doable, 1% / day hard too unpossible.

Thank you. I am.

Ok now that you are smart, I hope that you can stay out of my threads in future dont need trolls in them.

Is there a realtime simulator? Do you have a link?

Well it`s like realmoney/playmoney poker, you can focus a lot better with money on the line. It`s also because it feels like u somehow "waste" your time, it´s ofc not because you get better but well you understand I think. I will try to put in a bit of time in the sim everyday.

Bought some books now, will see if I like it.

For real investing I would need a bigger bankroll I think? What other kinds of trading are there? Links?

Thank you, guys.

You cannot get a day trading account with < 25k. The advantage of a DT account are many. Not waiting for 3 day settlements, intraday 4x leverage, etc.

Sim trading is NOTHING like play money poker. In sim trading you are making decisions in the real market not against a bunch of maniacs with nothing on the line like in play money poker.

If you can profit on the simulator in trading (over a reasonable amount of time and conditions) you have a real chance. If you can win in play money poker it doesn't mean a damn thing.

In fact approaching the simulator as "play money" is the exact wrong way to do it.

From my experience sim trading is great for testing out new methods or strategies, however its really a poor indicator if you are going to be successful trading those strategies. When people have money on the line you can be pretty sure they will violate most if not all the rules they have set up while trading on sim. I've done it, and hundreds of other traders I've spoken to have told me the same thing.

Before you begin trading set up your money management rules, then start trading small really really small. I said in this thread there is no holy grail to trading, well if anything comes close it would be money management.
Keep a journal of all your entries and exits and you'll pin point your mistakes a lot faster. I also recommend joining a prop firm to get around the PDT rule. I would not put up 25k and begin trading as a novice.

I'm not being a troll. I'm stating a fact. Good luck to you sir if you think you can beat the market. Here is a nice little article for you to enjoy.

http://www.tradejuice.com/TFB/odds-n-edge-sh.htm

Hopefully your greed doesn't make you broke.

Dude I don`t really care.


To be honest, I feel sorry for you if you approach all things in your life like that.


If one person can do it, I can do it. If you believe you are going to fail, you will fail.


edit:

LOL. I did read the article now, you realize that you are in a pokerforum and that a lot of people make a living poker(Including me)?

This is why you have to treat the simulator as real. You have to develop the right habits on the sim and transfer them to real. You have to get the mechanics down cold. You can't hesitate or frontrun. You can't have a play money attitude about it. You have to be a disciplined machine once your trigger/setup appears and react instinctively to it by practice practice practice on the simulator. If once you go live you start breaking the rules that worked on the simulator you have no chance at success.

The whole key is the process and not the result. If you get all bogged down by the results when trading live you discard the process. The sim will give you the confidence to trust the process.

If a million monkeys type randomly on typewriters and one produces a Shakespearean sonnet, his belief had nothing to do with it. And one fluke doesn't mean any other monkey has the ability to do it.

If a thousand day traders with zero real edge traded for 3 years, 999 went bust, and 1 made money, his belief in himself also had nothing to do with it. And if you take advice and coaching from him, it won't make you successful either.

The theory of poker defines EV, and how to recognize how it is calculated, which establishes how poker can be a profitable activity. If you understand how to make EV decisions better than your opponents to create an edge large enough to overcome transaction costs (i.e. rake), you'll make a profit. You might have to fade variance for long periods, but you always can analyze your and your opponents mistakes, to maintain your confidence whether you have a big enough edge.

The problem with day trading is that there is no "theory of poker" for it. It's impossible to identify mistakes your opponents are making, stocks are bought and sold at the very same time at the very same prices for good and bad reasons you are never privy to. Day traders never clearly describe what their edge is, either because they have developed something proprietary and valuable, or because they simply don't have one.

I've heard some daytraders say stuff like, I buy XYZ early in the morning because it always rises late in the day, and I have a "feel" for it's patterns. Anyone who is trading "patterns" are deluding themselves that repeating patterns not only exist, are significant enough to be tradable and profitable, but also that they can beat a thousand wall street computerized algorithms to finding them and trading them without the pattern quickly being traded out of existence.

My recommendation to you is if you want to daytrade, develop some sort of proprietary information and insight and establish a clear logical reason why it gives you an edge over a market full of thousands of participants with different motivations, and some with proprietary information of their own.

And remember, brokers don't push trading because they believe it's a profitable activity for the participants. Brokers love trading because brokers make more money the more people trade, and that's why they love daytraders best of all. DayTraders are cash cows ringing up huge transaction costs, so brokers want clients to think daytrading is more profitable than it is.

Buy and holders? Meh, unlike daytraders, the vast majority of buy and holders make money, but their commissions aren't keeping broker's doors open.

I don't disagree with most of what you wrote here, but bold reeks of EMH BS.

I am honestly shocked at some of the really low-hanging fruit that is out there, even in 2010. Like, blatantly obvious low-hanging fruit, in large-cap US stocks.

As soon as it stops working (which should be any day now but then again I have thought that for months), I will share a particular trade I have been doing in a widely-traded NYSE-listed stock and explain why it works (there is a very concrete reason it works - it's not voodoo). What I will never be able to explain is why it has worked for this long without it being traded out of existence.

Also, it is my opinion that "Wall Street algorithms" get way too much credit. Plenty of them hemorrhage money, and liquidity rebates are the only reason any of them make money. If the exchanges stopped doing liquidity rebates, 99% of computer algorithms would be gone tomorrow. And the algorithms' "edge" is usually miniscule and based on factors like latency and capturing the (very tiny) spread, not some ultra-clever quant analysis that captures decent-sized moves. The computers' edge isn't that they're smarter (they can't exercise judgment - they're computers!), it's that they are faster and more precise.

It can be profitable with a relatively large BR, alot of knowledge, and a ton of practice on a demo.

It takes alot of hard work and passion, but it can be done.

I like this attitude, its how I felt when I got started and its worked out for me so far. There is enough information out there that I think its reasonable for a laymen to determine that day trading with reasonably profitable metrics is possible and from that point I think for people who have reached this point of the discussion its a matter of commitment. I dont know what % will make it or not Im not trying to give anyone false hope, but if you can honestly say to yourself Im going to be a trader or die trying well I like your chances. Thats the level of commitment I think you need for a high chance of success IMO.

Bills, I look forward to your posting about your trade when it's done. My mind isn't closed on the subject.

Your only real opponent in daytrading is yourself and your own psychology. Learning to manage your own emotions is the real key to success.

When I first went into the pits way back when and saw that the other side of every trade I made was Merrill Lynch, Goldman Sachs, Soloman Bros., Soros etc. I quickly realized that my goal was not to outsmart them as their reasons for making whatever trade they were making was not the same as my reason for taking the other side.

Can you logically demonstrate a specific trade is +EV, even if it fails and loses money? to me that's an important and necessary element (but not the only one) to making trading a rational +EV endeavor, like Sklansky's TOP did for poker. I've never been able to find a mental framework for trading that had logical underpinnings I could understand/accept, which is what has restricted me to being only an investor.

This is what bothers me as well. There has to be some underlying theory/assumptions which to some extent are taken on faith and I suppose it depends on how reasonable these are. From what I can gather:

main one used is backtesting. Some method has worked in the past so its +ev now. whilst backtesting profitably is usually necessary its not sufficient and seems to be over-relied on (even when done well).

other main assumption is that the market is somewhat efficient so if you can find mispricings then you can bet on them to correct reasonably quickly.

Then there's loads of price-action stuff that I struggle with although I can see why it would work if enough were playing the same game.

This assumption is false.

Either that, or I just run good.

For what it is worth, I year trade instead of day trade. I average one trade per month, but those trades are clustered around downturns in the market, so it is something like 24 buys in one month and then wait, wait, wait. 24 sells in a future month, then wait, wait, wait for the next cheap market.

In poker terms, it is like a big blind special vs. open raising with crap in EP.

Daytrading is dead. High frequency trading shops with million dollar computers have the short term trading game conquered. Your best bet is to focus on swing trading or focus on volatility plays instead of directional plays.

You just run good.

Seriously, "somewhat efficient" covers a great deal of ground. There are multiple flavors of EMT, and almost no one believes the super strong one any more where the market incorporates every scrap of information almost immediately, and there aren't any opportunities to earn excess returns.

There is a lot of evidence that markets are struggles between conflicting forces disagreeing over the value of future cash flows, and there is a wide range of skill at work in fundamental research and company evaluations. There are too many outlier funds/investors to be explained away by just variance. But there is compelling evidence that backtested patterns don't persist, that technical indicators alone aren't meaningful, and that a much looser form of EMT actually makes sense.

It would make no sense to trade by buying in a cheap market if you didn't believe the market was somewhat efficient. It would make sense if by cheap you mean you got a premium dividend return, but you would have no reason to expect the shares to rise in price which is what we normally mean by trading.

An outragous example of taking advantage of mispricings in a somewhat efficient market apparantly occured during the dot-com boom when 3com owned shares in Arm but 3coms share price valued it at less than its shares of Arm were worth. Not certain this is exactly true but it would be hard to argue there's not a +ev trading opportunity which relied on a somewhat efficient market to provide a handsome return.

fwiw I don't day trade either. Working on short-term stuff but I can't understand why I should care about being closed at the end of the day (even if I'm awake)

There are infinite approaches to daytrading and there is no "holy grail". This does not mean there are no +EV ways to go about it.

Daytrading is part art and part science but at it's core it is the reading of order flow, price action, sentiment and market psychology. I trade primarily support and resistance. It's all about determining the likelyhood whether support or resistance will hold or breakdown based on current market conditions and action. Experience is a big factor but once you can read these situations you can make low risk/high reward bets on the outcome. It's just a numbers game like betting on a flush draw when the pot odds are there. I often trade 100's of times day if the price action dictates it.

I like volatility and markets that move a lot so I am more interested in things like energies, metals and grains rather than say interest rates or the stock market which don't have the same action levels. When the markets are in price discovery mode is when they offer the most opportunity (for me) and the more volatile markets are often in a constant state of price discovery. Economic news and numbers and events are the best opportunities for me.

People who have no experience, interest or knowledge of daytrading love to explain it can't be profitable because there is a high failure rate. The failure rate is high for a variety of reasons but mostly a poor mental approach and an inability to really learn the ins and outs before risking capital. It's certainly not for everyone but there are plenty of successful, professional daytraders.

Here's an extinct trade that was +EV as an example for you. The ER2 Russell 2000 futures used to trade at CME on Globex. I used to trade them and I noticed a strange behavior right at the closing bell everyday.

As you probably know, index futures trade 15 minutes past the NYSE close before shutting down for their maintenance period. What was happening was at exactly 4pm, when the stock market was closing, tons of short term traders were either :

A) liquidating once the stock market closed
B) (more likely) auto-liquidated by their broker due to the fact that the overnight margin was higher than their intra-day margin.

This caused a unique event to occur every day. ER2 was not very liquid at the time, usually a couple ticks wide with maybe only 5-10 contracts on the inside. What would happen is at about 3:59:50 - 4:00:10 the entire order book would be swept on BOTH SIDES.

Meaning, traders were hitting all the offers, with market orders, usually eating up to TEN levels deep (remember it was illiquid), at the SAME TIME traders were hitting all the bids ten levels deep too.

So I cashed in on this opportunity by making a market. I entered a bid for 50 contracts and an offer for 50 contracts about 5 ticks out on either side and just watched them get smacked for fills everyday like clockwork. Frequently I would only be left with 10-20 net exposure and would just wait a few seconds for the market to stabilize and just dump them.

This worked great until ER2 became more popular and the depth of market started getting thicker. Sometimes there would be 100+ contracts on the inside and the opportunity just fizzled out.

Big funds and huge buffet-size investors couldn't care less about this trade, because the most size you really could get off was <50 contracts or so, which is pennies to them. But I could make 5-10 ticks a day x 50 contracts so it was worth a couple grand a day. Just this trade alone would make over six figures a year.

Great post. These kinds of trades are still out there, even today.

This makes total sense to me as a +EV trade to take advantage of specific and proprietary actionable information. I've actually used forced liquidations to my advantage as an investor before, the hard part is finding and identifying them.

This doesn't make sense to me. I enter illiquid markets several times a day where I am the biggest participant, and if I'm in a hurry I may nuke the support level and all resistance at my whim, or trade slowly and opportunistically if I'm not, and may stop any time my wife asks me to do a chore or an errand. How can that be predictable or tradable, and how can a bigger market with 1000 people like me make it any more so?

If it is a trade where the trader has no proprietary information and simply requires a special "feel" that can't be explained, it seems like coin flipping to me.