Why do we do this?

[Salty Gibbon]

I day trade Nasdaq stocks only using IB as broker.

I use Money.Net for live charts and QT which is free.

Money.Net is not the best and leaves something to be desired at times but they have cheap exchange fees. I was using Level II but dropped it to conduct an experiment to see what would happen if I didn't use it. Quite frankly it didn't make much of a difference probably because I wasn't using it properly anyway. So I no longer subscribe to that.

Go visit Money.Net website for pricing.

Very cheap for Level I only.

I will probably graduate to a more expensive package one of these days but for the time being I'm just doing fine at a very low cost to me.

I think that £1,700 referred to by twalker must have included office space at the Ritz.

 

[Salty Gibbon]

I finally settled on applying real discipline to day-trading and haven't looked back.

Precisely Peterpr. This was my experience too.

Discipline is all that it takes but you need to possess the intellect to realise that and apply it faultlessly and consistently in practice.

 

[DESKPRO]

For me longer term trading (holding positions on average 3-5 days) is proving to be more profitable than day trading.

1. My stops are no longer too close to entry positions like when day trading. Stops are now at places where if correct shouldnt be hit.
2. Less stressfull - dont have to try and take a position every day.
3. Dont have to watch the screen consistently- have actually found that I am actually more successful during days/weeks when I dont watch the screen. As several books have mentioned traders (medium to long term) who dont use online trading are more successful than those who do.
4. Now trade in direction of trend. Dont panic if there is a retracement but stay with the trend.
5. Have diversified into different currency pairs. Only used to day trade EUR/$ now trade up to 6 currency pairs.

Just giving you my own recent experiences...and have been successful in the past month using longer term trading strategy .. hope it continues

 

[Splitlink]

Sorry, it's the 'Fosters'?

At that time of day, it may well have been- or some similar brew. I think that we have lost each other, which is a pity.

Split

 

[donaldduke]

All types of trading are profitable, but perhaps not for you.

I make one or two trades a day. And maybe i could swing trade with a holding period of a few days.

But i couldnt scalp even if my life depended on it, and i couldnt do long term position trading either.

Even with my style of intra day trading i might only breakeven after three months or i might double
my account in four. Thats just the way this business is, uncertainty and the feast/famine lifestyle.

This is why trading is so hard, you do everything right for weeks or months on end and still not make
money. Then your system takes off and the game looks so easy. Until you hit the next dry period....


However i would agree that intra day spread betting is a mugs game unless you know that
the price being quoted by the SB company is incorrect/out of line.

 

[Roberto]

I actually don't find daytrading stressful at all

Neither do I.

However, the thought of holding positions overnight / long term does stress me out. So thats my perspective right now. Anyone else?

Yes ... me too.

Day trading, I have no doubt at all , provides the best returns for account equity.

Of course. I wouldn't imagine that anyone who's profitable could question that for a moment.

I spend £1700 per month for my setup

Do you _really_ need a platinum-plated screen to lend that authentic touch to the commodities trading?

I am a Chartered Accountant

Then for God's sake help me out next time someone ridicules me for stating that spread-betting profits are exempt from CGT!

I finally settled on applying real discipline to day-trading and haven't looked back.

Likewise.

This was my experience too. Discipline is all that it takes but you need to possess the intellect to realise that and apply it faultlessly and consistently in practice.

Indeed. And nice to see someone say so rather than dressing it up with the usual "psychobabble". You need a genuine edge and the intellect to apply it; that's all.

 

[Splitlink]

For me longer term trading (holding positions on average 3-5 days) is proving to be more profitable than day trading.

I agree with you 100%.

Split

 

[Salty Gibbon]

But how do you personally handle the situation when a stock gaps down massively ?

eg. BIIB a short time ago

How do you pyschologically handle the prospect of this happening ?

Quite frankly I am very nervous of holding Nasdaq stocks overnight for this reason.

 

[Salty Gibbon]

Then for God's sake help me out next time someone ridicules me for stating that spread-betting profits are exempt from CGT!

Sorry, don't know a thing about UK tax. Spent most of my time overseas and besides I am retired from that boring pursuit now.

 

[Splitlink]

But how do you personally handle the situation when a stock gaps down massively ?

eg. BIIB a short time ago

How do you pyschologically handle the prospect of this happening ?

Quite frankly I am very nervous of holding Nasdaq stocks overnight for this reason.

I must say that I am quite a lightweight trader. I do not trade as heavily as an interday trader might because of this danger. I would, also, say that a really nasty gap against me has not happened yet. On a previous thread Dave put this point to me and I was worried enough to close out my trades every day afterwards (full credit to his skill of persuasion!) but I have gone back to overnight trading again as I believe that it is compatible with my character. That is not to say that it is for everyone and I am not trying to suggest that it is the better way. Neither am I an index or U.S. stocktrader.

Split

 

[the blades]

But how do you personally handle the situation when a stock gaps down massively ?
How do you pyschologically handle the prospect of this happening ?


.

I hold a varied portfolio of stocks chosen through differant systems. You don't avoid getting stopped out but you balance the pain with some good "baggers". Couple this with hedging your portfolio against its index (and receiving interest on your short) and the painful days aren't that frequent. But then again.......Sportingbet

UTB.

 

[timsk]

Overnight Gaps Against You

I'm with Salty 100% on this. It's the main reason (and probably the only reason) why I wouldn't consider swing or position trading. Certainly, it's one of the key points that Mr. Charts makes in favour of intra day trading. True to say that the indices are less likely to gap dramatically against you than individual stocks - especially Nasdaq stocks - but, even so, I wouldn't sleep well at night. Setting stops for a Nasdaq stock which might gap against you on overnight news by as much as $10.00 would be next to useless unless it's a guaranteed stop. I have no experience of these so, even then, it's possible that they may not protect you in such extreme circumstances. If there's a way around this problem, I'd love to know about it, but I've not come across one so far.
Tim.

 

[SOCRATES]

I'm with Salty 100% on this. It's the main reason (and probably the only reason) why I wouldn't consider swing or position trading. Certainly, it's one of the key points that Mr. Charts makes in favour of intra day trading. True to say that the indices are less likely to gap dramatically against you than individual stocks - especially Nasdaq stocks - but, even so, I wouldn't sleep well at night. Setting stops for a Nasdaq stock which might gap against you on overnight news by as much as $10.00 would be next to useless unless it's a guaranteed stop. I have no experience of these so, even then, it's possible that they may not protect you in such extreme circumstances. If there's a way around this problem, I'd love to know about it, but I've not come across one so far.
Tim.

How can you reconcile the idea of profit (or loss) without risk ?

If there is no risk, there is no chance of price movement.

If there is no price movement there is no possibility of gain, or loss for that matter.

This is because there is inexorable linkage between on the one hand risk and on the other profit or loss.

Simply put, you cannot have your cake and eat it, but you do have to confront, evaluate and decide according to your own level of tolerance to risk itself.

 

[Salty Gibbon]

Socrates

It is all about the degree of risk that each individual is willing to take, isn't it ?

High risk > High profit potential / High loss potential

Low risk is obviously the converse of this.

At the moment in my position on the learning curve, I am in the low risk category and willing ( and able ) to accumulate my profits slowly and gradually.

As the equity curve rises, so can the degree of risk to which you wish to expose yourself.

But everything should go gradually especially for a relative learner like myself.

That has given me a thought actually. In order to further impose rigid discipline on myself I am going to wear "L" plates every day when trading. This will make me remember that I aint no George Soros.

 

[the blades]

Simply put, you cannot have your cake and eat it, but you do have to confront, evaluate and decide according to your own level of tolerance to risk itself.

yes, I suppose it's all about this, isn't it.

UTB

 

[SOCRATES]

yes, I suppose it's all about this, isn't it.

UTB

Yes, precisely !

 

[neil]

The missing link

Precisely Peterpr. This was my experience too.

Discipline is all that it takes but you need to possess the intellect to realise that and apply it faultlessly and consistently in practice.

Damn !!

 

[Salty Gibbon]

Lol

 

[techst]

Down with Salty on the discipline thing. And realise that you the guy behind that system is the most important part of the process. I haven't seen a thread as good as this in a while. Also enjoying the one about having an edge it's question I've thought about a few times. I swing trade from few days to a few weeks and i'm lucky to find a style that suited me from the beginning. It took me 2 years to get consistent and I'm now managing small sums (only 5 figures) along with my system.I'm making the switch from part time to full time. I heard a comment from George Forman who always said that he was a full time preacher and moonlighted as a boxer. I feal this way about my job. Trading's a priorty and if you want it enough for the right reasons you find that place where the Holy Grail lives. Its in your head.

 

[mr_cassandra]

All time frames can be profitable

I think it boils down to which one you seem to do best at. I suspect there are successful traders out there who go by day, week, month, year etc.

My own forte has been trades that last weeks to months, based on a program I wrote which uses contrarian indicators like vix and put call ratio, amongst others.