Is it really possible?

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Old Feb 27, 2009, 3:25pm   #1
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Is it really possible?

I'm wondering if it is actually possible to consistently make good money Day-trading. And hope some people can be honest and share their approximate results. I believe it is possible to make money over a long time period, because you can find the right trends, and the intra-day noise doesn't affect you if you have a wide stop and are happy to wait days, weeks or months. You will lose sometimes, but eventually I believe you can win this way (especially if you make good entries) and some hedge funds do seem to win over the long term.

Day trading has a lot of noise though, and possibly a lot of trading (=commission costs), and you can be right about the overall move, but get killed on any given day. Do people really make money here? Also the reason I ask if people can make GOOD money is not because I'm concerned with how much you make, but realistically if 10,000 people all bet on a bunch of random coin tosses, some will make money. But they won't make enough that is convincing enough that it must be beyond chance. So in order to claim that it can successfully be done, then you should be able to make quite substantial gains as a % of your capital.

How many people here actually make good money by day-trading? Please share. Many people say it is just not possible. I know you read on here and from experienced traders that you will lose for 6 months to a year before you learn and become consistently profitable, but perhaps they just want newbs to trade and lose their money. Fresh meat for the brokerages, and fresh meat for those that hang on to long term moves.

Another reason why I have doubts, is that many Banks are just clearing out their prop desks. Meaning, they are not profitable enough to run any more (if they ever were indeed profitable beyond chance). So if even these guys with all the best equipment, analysts, years of experience and data are not making money, how can a normal trader be expected to. Furthermore, those trading desks that do still exist, are not filled with old experienced guys who took years to learn and now can make crap loads of money.They are filled with youngsters who could just be existing based on chance again, survival bias. This echoes a lot of what people like Nassim Taleb have written about. I have not experienced day-trading long enough to know if it is doable. I have tried it a little, and I win some, lose some as epxected but overall can only break even. So I am hoping more experienced people here can shed some light. I am quite happy to put the time into it to study the charts and learn it. But I want to know if it is just a fools errand before I spend that time learning.

Some honest opinions and results please. And where are the old guys of trading? Why don't you find them on the trading floors of the big banks day-trading? How many day-traders do banks actually employ? These things are important, because if they are employing quite a large number, then it is because the accounts show it is profitable for them to. If they're not employing them, then that is because it is not profitable.

Last edited by Calinor; Feb 27, 2009 at 3:34pm.
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Old Feb 27, 2009, 3:37pm   #2
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call your broker and ask him how many traders, especially retail traders are making money on their books. he/she might tell you 90% lose everything within 3 months..
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Old Feb 27, 2009, 3:42pm   #3
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Calinor started this thread I knwo the 90% figure. I think that doesn't really reveal much though. Because there are two ways you can read that. That 90% could be mostly people that lose early on and give up within 6 months, when in fact it is possible for most to make money if they stick at it. Or it could be that the 10% are only profitable from luck and those 10% will eventually join the other 90% when they have a run of bad luck, and a new group of lucky people will take their place as the new 10% of 'successful day traders'. So really you could read that either way. Also maybe 80% of people don't get a first in their exams at university. But that doesn't mean that it can't be done or that it is luck. They achieve the first class degree by a mixture of hard work, intelligence and natural aptitude for the subject (despite the 80% or whatever that don't achieve it). Is the same true of day trading or not?

I'm interested in people's personal experiences and also whether banks employ people to do it, and why not?

Last edited by Calinor; Feb 27, 2009 at 4:05pm.
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Old Feb 27, 2009, 3:46pm   #4
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Originally Posted by Calinor View Post
I knwo the 90% figure. I think that doesn't really reveal much though. Because there are two ways you can read that. That 90% could be mostly people that lose early on and give up within 6 months, when in fact it is possible for most to make money if they stick at it. Or it could be that the 10% are only profitable from luck and those 10% will eventually join the other 90% when they have a run of bad luck, and a new group of lucky people will take their place as the new 10% of 'successful day traders'. So really you could read that either way. Also maybe 80% of people don't get a first in their exams at university. But that doesn't mean that it can't be done or that it is luck.

I'm interested in people's personal experiences and also whether banks employ people to do it, and why not?
do u mind tell us here what markets you intended to trade?
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Old Feb 27, 2009, 6:19pm   #5
 
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Originally Posted by Calinor View Post
I'm wondering if it is actually possible to consistently make good money Day-trading. And hope some people can be honest and share their approximate results. I believe it is possible to make money over a long time period, because you can find the right trends, and the intra-day noise doesn't affect you if you have a wide stop and are happy to wait days, weeks or months. You will lose sometimes, but eventually I believe you can win this way (especially if you make good entries) and some hedge funds do seem to win over the long term.
What is your definition of consistent , making money every day, week, or month, or year?

And is 20% a year enough, or must a consistent day trader make 200+% a year?

Atleast 50% every year is consistent in my book. And that is easily possible, year in, year out.

I aim to make around 100% a year, and i know in a good year i might make more than that but in a below average year i might make only 50%, and once every 20 years or so i might make even make less than 50%.

But if you want to make 20% a week, or even 20% every month then this is not consistently possible over a long period.

But the future is always uncertain, the financial system is at risk of collapse, and you never know what might happen. Perhaps liquidity will dry up in a lot of markets making day trading much more difficult..

Last edited by donaldduke; Feb 27, 2009 at 6:32pm.
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Old Feb 27, 2009, 7:16pm   #6
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the truth of the matter is cunningly encoded in the title of this book....

Day Trading For Dummies:Book Information - For Dummies

...to unravel the code, insert the letters "s" and "i"
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Old Feb 27, 2009, 10:49pm   #7
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Calinor started this thread Well for a day trader, obviously they will lose some days, and some weeks, but I was thinking that consistently profitable would mean that out of 12 months of trading, a day trader should be in profit for 9-10 of those 12 months at least (and of course overall profit).

But yeah 50% would be pretty profitable Donald. And if that can genuinely be achieved (no offence meant, I don't mean to doubt your word, it is just hedge funds would be delighted with 15-20% a year) I'd be impressed. You say that is easily possible year in year out. So you have made more than 50% each year over the past several years? Can you give an estimate of your % gains over the past 5 years say? Perhaps you can teach me

everyonerich, well I'm just wondering if it is even possible on any major market. Personally, I prefer to trade indices: FTSE, YM or I occasionally dabble with currencies (with less success)

Last edited by Calinor; Feb 27, 2009 at 10:59pm.
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Old Feb 28, 2009, 2:20am   #8
 
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Originally Posted by Calinor View Post

But yeah 50% would be pretty profitable Donald. And if that can genuinely be achieved (no offence meant, I don't mean to doubt your word, it is just hedge funds would be delighted with 15-20% a year) I'd be impressed. You say that is easily possible year in year out. So you have made more than 50% each year over the past several years? Can you give an estimate of your % gains over the past 5 years say? Perhaps you can teach me
Its good to see that you are realistic is in your expecations.

I have averaged much more than 50% over the last four years. My systems are profitable about 80% of months.

As for teaching you, there really is no incentive for me to do that.But nearly everything i know about trading can be learnt from books. The rest you must learn yourself by actually trading and losing real money.

I am prepared to trade systems that only win 40% of the time, i am prepared to have 10 losing trades in a row. Sometimes (but thankfully not often) i only get 2 winning tades out of 20.
Most traders are not prepared to trade that way and are not prepared to take 30%+ drawdown like i am prepared to do. Most people lose discipline after 3 losing trades.

Im not saying this is the only way to trade. Some people claim to be profitable with systems than win over 60% of the time, even 80 or 90% of the time. I have never been able to develop such day trading systems (atleast not ones that remain robust for long periods) but perhaps they do exist.

Anyway a high win rate is not required to make money as a trader as i am sure you know already.

People fear losing money. My biggest fear is missing a valid trade. I also have a level of comitment to trading that most people would not be able to match.
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Old Feb 28, 2009, 8:10am   #9
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In a nutshell, yes.

I'm not prepared to put my details on here, you'll just have to take my word for it, but I have not had a losing day this week, for example, and losing weeks are rare.

It has not, always, been like that. I've been trading for thirty years. The first thing that I had to come to grips with was "the get rich quick" attitude that I had. Now, I'm no spring chicken, and I have a much different outlook. Without doubt, the first years are the most dangerous for a new trader, because most of us are all the same in that we try to fight the market.

If, as you say, and I have heard the same, 90% fail it is because you are asking the wrong question. I would suggest that a large proportion of beginners are, by nature, gamblers. Once they have disappeared, the serious traders are left. How many traders, who have been trading, regularly, for over ten years, are failures?

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Old Feb 28, 2009, 12:59pm   #10
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you'll just have to take my word for it, but I have not had a losing day this week,
Is that because you didn't do any trading this week ?


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