>>1069039 So when you are trading your $40,000 account and you have a 4-bar 30 minute breakout of the opening range, you think, "OK, here we go..." and you go in the direction of the breakout. But........somewhere there are 48 hedge funds and/or large speculative trading entities who see the little volume spike of the small speculators. The big traders computers run 5 million calculations in less than a second and their probability analysis predicts that if they can get the market in play to reverse for 60 minutes with a massive move in the other directions they will make close to $400,000 for the day.
So you are sitting there waiting to make your little day trading profit on a thousand shares of something and a tsunami of opposite direction trades hits your screen and you shout "FUCK!" and spend 10 minutes looking for "news" to explain what is happening in front to of you and soon you're down $4,000 in your $40,000 account and and you get out (hopefully) and sulk. The next day the market goes lower, you jump in to make money back and it happens to you again.
Goldman Sachs day trades and makes $1,000,000 a day doing it. Get enough money and you can trade like them too.
>>1069049 who the fuck enters after a 4 bar 30 minute breakout, you're just asking to get fucked. And this is by far the most paranoid shit of all time. "big trader computers" spot when speculative trading entities show up as tiny blips, ok buddy, yeah they really give a fuck if you buy 30 shares of an etf
>>1069063 >Wow, this one unsubstantiated example has overturned the statistics of a large group. >>1069061 you sound like the typical anxiety riddled terrified beta cucks this place is infested with
yeah, supercomputers spot patterns constantly, but they are market makers, they create large movements so they can make big percentage jumps off group movement. But if you aren't completely braindead you can either spot a longer trend and its supports (if you aren't actively day trading)
Or you can tag along when you spot a stock hit a support in the middle of the day when things aren't as volatile. (if you are a little braver)
and then in the morning you can easily spot a premarket move and then set a limit order to take advantage of a dip after the open
there are a million ways to make money consistently day trading, you're just a paranoid loser who spends his time thinking about whats wrong with the world and now you're trying to infect others with your beta self defeating attitude.
Computers don't feel these things. I program computers.
No, I just understand enough mathematics and computer science to get it. Having said that, I accept my brain's limitations and can also use computers to do my bidding. Every time you get a can't miss trading strategy, a computer learns it (if they don't already know it). You can't beat computers at pattern recognition and numerical analysis.
btw, what's the name of that guy that made a billion dollars through day trading? Oh right, there are none.
>>1069080 >only 1 in 100 do it well enough to be described as "predictably profitable." Those are actually pretty good odds. Also it's to be expected since for one person to profit a lot, others have to lose.
>>1069109 >stocks are zero sum Learn to tie your own shoelaces before you delve into stocks
>>1069014 You dont have to beat a computer. That's like saying every shoe store has to beat Walmart to be profitable
>>1069049 You just plain don't seem to know what you're talking about
>>1069073 There are hundreds of books on nearly every sunject under the sun. I don't see what you're getting at.
>>1069079 Once again, explain why you have to beat computers to be profitable.
>>1069080 One academic paper written documenting a questionable study of daytraders in Taiwan >FTFY
>>1069120 No, YOU can't read charts. Many people do.
Of course intraday trading probably isnt the best stragtegy for your average individual. It takes an incredible amount of time, smarts and research to be succesful at. I would suggest a combination of swing trading and very long strategies for even someone with say, less than two hours to devote to trading a day, but that's just what's appropriate for me. If you have enough capital and tons of time, you can become very profitable. Thousands of prop traders make very profitable careers intraday trading
>>1069138 If your strategy consists of detecting patterns then computers will and have already exploited it to the point that it's unprofitable, then they go onto to exploit patterns our human brains can't even detect.
However, if your strategy is to invest in fundamentals long term and buy at a discount then you already beat computers. At the moment computers can't quite analyse stocks long term like that (but they provide some great tools for humans to fill in the gaps).
Suppose computers could perfectly pick undervalued companies, then they would bid them all up to their fair value, and sell them down to their fair value and we would be closer to an actual efficient market barring technical details and who-knows-whats.
>>1069118 the amount of money required to move price to take the money from the small fry outweighs the money they would make from the small fry. nor would the risk of tying up such capital warrant going after the small fry.
(you also have more than just one player who can move the market, so they are watching each other for when their capital is tied up to strike each other)
>>1069144 computers are more about risk management rather than profit machines. also, they are more so for automating trade transactions for human brokers because having 1k unique orders to fill at open is physically impossible unless it's algo'd.
>>1069148 What that poster should have said is that HFTs will wipe you out even if they're not trying to. HFTs do not give a shit about technical analysis -- they are about arbitrage and front-running.
If you are sitting there trying to run technical analysis on a stock that happens to be targeted by an HFT, prepare to see your earnings decimated (unless you happen to be going the same direction the algorithm happens to be going at the time)
>>1069162 That is the most wildly disingenuous way I have ever heard HFT described. Congratulations. You either work for one and have been schooled in how to make them sound harmless, or you have no clue what HFT actually does or what it is they do for brokers that makes them so successful.
The fact that you think this is a conversation about speculation rather than about the mechanisms by which HFT provides liquidity (which, as stated by me and others, will RAPE your technical "analysis" if you run into one), makes me think it's the latter.
>>1069159 Thats not what HFT is about. They don't move prices, they typically just collect fractions of pennies buy seeing an order and then buying slightly lower. Their only competition is other HFT firms who are trying to get there first
>>1069171 Day traders are just like poorfags who play the lottery. Always so hopeful.
>>1069172 No, what you did is quoted bullshit off wikipedia that you don't understand. There is a reason that HFTs are, you know, called market "makers". They will buy/sell any trade, and in doing so, they skim off the top which raises the price/lowers the price of the instrument every single time.
For people day trading, these movements will seem nonsensical. And they are. They are completely outside the scope of technical analysis, and there is nothing you can do to anticipate them. All you can do is lose your money, which most active traders BY FAR do.
ITT: technologically illiterate business school dropouts think they can recognize patterns and make trades faster than supercomputers that Wall Street spent millions of dollars on just to figure out the optimal place to host them for the shortest ping times
Is it possible to make money daytrading? Sure. Just like its possible to make money at a casino or playing the lottery. Its pure chance, no skill involved, and very low probability of coming out ahead over any meaningful period of time.
>how do propfirms exist if trading intraday is down to luck? that throws a spanner in the 'luck' argument >hurr durr >day trading exists so it MUST be profitable, right? >right? >right? >*crickets*
>>1069197 I'm sure they intend to make their trades. It's just that their decisions have very little effect on the outcome. At least this is true when looking at whether day trading outperforms benchmark investing strategy, such as indexing, on an after-cost basis.
The point is that there's no correlation between skill, intelligence, experience or resources, on the one hand, and making profitable daytrades, on the otherhand. Whether you do make profits above the benchmark is random, and therefore, its not inappropriate to call it luck if/when you land on the right side of the ledger.
>>1069220 Making a comparison to roulette is bad, but only because in roulette everyone has the same shitty odds, as opposed to the stock market where certain players have the ability to make trades at faster speeds and with greater access to information than you.
>>1069218 Well, 5% day traders do beat the index. So if there's 20 million day traders in the world then we'd expect to find a million profitable one. Seems reasonable. Also seems like really, really stupid way to manage your money.
Also, the 5% statistic only applies to beating the index. It's possible to be profitable but still underperform the index. That accounts for a lot of day traders. They don't necessarily lose money ... they just make a lot less than someone who adopts the better strategy.
Hope you understand it better now.
>>1069220 >with intention in trading, skill becomes apparent I'd love to see some evidence of that. It's an interesting statement, but it runs counter to every expert and every published study on trading that I've ever seen or heard. So any source would be appreciated (published articles please; no personal anecdotes or general observations).
>>1069241 >Are you suggesting any profit made from active trading is completely due to luck? No, I'm not aware of any evidence to support going that far. When referring to luck, I'm only talking about the 5% of day traders who outperform indexing.
There are 95% of day traders who fail to beat the index. That means they generate after-cost returns less than ~9-10% (based on historical index returns). So a day trader who averages 2% gains annually is still making a profit, but is obviously not deploying his money optimally. But to your question,I'm not aware of any studies that say his 2% gains are due to luck. They might be, or they might not be. I'm not sure we care because we do know, to a 100% degree of certainty, that he's trading sub-optimally. That tends to end the inquiry.
As for the 5% of day traders that do outperform the index, there are studies that show that active traders who beat the market benchmark do so only by luck, not by skill, knowledge, experience, intelligence or resources. This is tested by evaluating the ability of these same traders to repeat their successes. Since most active traders are unable to repeated outperform in successive, statistically-significant time periods, the researchers conclude that the successful time periods are due to luck and not some attribute of the trader. So yes, the 5% of day traders who beat the index do so only by luck.
>>1069255 First, I'm not "saying" anything. I'm telling you what the academic research shows. I'm not an researcher and I hold no PhD's. My opinion means as little as yours and everyone else's on this board. I'm just a guy who's smart enough to listen to people smarter than me when they study this stuff.
That's important, because most of the people who try to argue in favor of day trading, forex, active trading, commodities, gold, etc., do so through anecdotal comments, unsourced evidence, personal opinion, and isolated examples. These are terrible ways to find the truth, as I'm sure you realize.
Second, since we're talking about large sample groups here (there are millions of traders, after all), you would never word your inquiry using a phrase like "anyone who actively trades." Such a statement would be refuted by finding one single contra-example. That's that the goal here. We're not discovering universal laws of physics; we're discussing principles of sound investing strategy to a degree of scientific certainty.
In academia, what it means to draw a conclusion to a degree of scientific certainty depends on the nature of the inquiry. There are many different confidence levels that might meet the standard, depending on the circumstances.
Now I'm not a mind reader, so I can't really interpret your ambiguous question, Are you asking if the statement is a universal law, or are you asking if the statement is true to a reasonable degree of scientific certainty, and do you understand the difference?
If you have a strategy trading (i.e limit, stops, profit targets, recognizing intraday patterns on particular stocks), you can be successful at it. Most people don't do this and let emotions like greed and fear take over.
There are always easy setups to scalp if you have the discipline to implement rules into your strategy.
Managing your risk should be your #1 rule when trading.
>>1069294 >Here is an academic study documenting the benefits of smoking cigarettes: >http://europepmc.org/articles/PMC3151730
Do you have a point here? According to the article, nicotine has a positive effect on fine motor skills, alerting attention-accuracy and response time (RT), orienting attention-RT, short-term episodic memory-accuracy, and working memory-RT. I'm not an expert, but this doesn't sound surprising to me at all. Nicotine is a powerful drug, with many known positive effects.
Did you even read the study you posted?
Is this some misguided attempt to be clever? Because you clearly lack the intelligence to pull it off. It doesn't take much brainpower to understand that a drug can have both positive and negative effects, nor is it difficult to understand that a drug (nicotine) is not the same as its most common delivery vehicle (smoking).
Also, if you were trying to draw some analogy between nicotine and day trading, you've failed.
This may seem off topic, but if one could get a copy of an algorithm used by Goldman Sachs, would there be any way to make a counter algorithm, like one dedicated to exploit the weaknesses of the original algorithm?
>>1069304 He's posted a couple semi-related papers written by econ majors documenting studies of Taiwanese daytraders in some other threads. There is no such study in America, since there are thousands of daytraders employed at thousands of firms across the country that beat indexes every year. That would be enough evidence for most reasonable people, but he read What the Dog Saw and took that idiot Malcolm Gladwell seriously when he said Benjamin Graham "just got lucky a bunch"
>>1069313 No that's what Goldman Sach's algorithm is already doing. They take advantage of weaknesses in the market and buy up under priced equity. It's more or less a race to a big pot of gold, but they get the information on where the gold is first.
>>1069309 My point is that when you read an academic paper, you have to take it in context and then apply anecdotal and circumstancial evidence to reach a conclusion. Smoking might be beneficial in some aspects, but it's obviously bad for you for a number of reasons not stated in the study. Questionably trained day traders in Taiwan may not have done very well, but you have to look around and see that a lot of active traders in America do very well and apply that knowledgw to your conclusion.
(there's also a difference between day trading and investing, as noted in the very article you've cited) (also, don't use last century's data, please)
even then, it also states the only reason why the "heavy daytraders" lose is because of transaction fees.
the second article is confusing to read and needs to be cleaned up. (also using last century's data) then again, it's talking about the typical retail trader, you know, the average joe who doesn't spend every waking moment reading market news and whatnot.
third article, again, taiwan, states that while there are losers, there are consistent winners and even goes to show a little about how they go about winning.
fourth article is comparing the retail average joe to foreign fucking institutions... who do you think would win every time?
Everyone is building more sophisticated algorithms, and the more competition exists, the smaller the profits.
a brain operates. So-called "neural networks" and "genetic algorithms" have become common in higher-level computer science. Neural networks permit computers to create new rules and automatically change underlying assumptions by experimenting with thousands of random sequences and processes. Genetic algorithms encourage software to "evolve" by letting different rules compete, and combining the most successful outcomes.
Most software fails in pattern recognition because there aren't enough sequential rules in the world to teach a computer to discern between two faces, or to find almost imperceptible relationships between stock.
A machine that can generate complicated rules a person would never have thought of, and that can learn from past mistakes is a powerful tool
Traders have intuitive senses of how the world works. But with these systems you pour in a bunch of numbers, and something comes out the other end, and it's not always intuitive or clear why the black box latched onto certain data or relationships.
>>1069315 >written by econ majors Umm, the authors have credentials a little higher than "econ major" sparky. They're professors at academic institutions with multiple published articles on economics, including trading.
What are your qualifications again?
>studies of Taiwanese daytraders The authors of the studies in Taiwan (2 of 4 studies I posted, iirc) explain why those chose that market. They also explain why their findings are applicable to all other similar day-trading markets, including the U.S.
If you have a credible reason why these studies are inapplicable, by all means publish a critique.
What are your qualifications again?
>there are thousands of daytraders There are thousands of lottery players too. Doesn't make it a smart financial move.
>>1069329 >Questionably trained day traders in Taiwan Citation needed. The scope of the Yale study (1 of 4 that I posted) was "a comprehensive analysis of the profitability of ALL day trading in Taiwan over a five year period." (emphasis supplied).
It would seem you're making some unwarranted assumptions about a study you didn't even read. Hardly makes you a credible source for any purposes.
>>1069388 No, once again the point went over your head. The mere fact that there are millions of active traders that consistently beat index returns proves itself. You dont need academic studies to prove facts.
>>1069411 >The mere fact that there are millions of active traders that consistently beat index returns proves itself. see >>1069233 >Well, 5% day traders do beat the index. So if there's 20 million day traders in the world then we'd expect to find a million profitable one. Seems reasonable. Also seems like a really, really stupid way to manage your money.
Its pretty clear you don't understand much about math or statistics. Unfortunately, I'm not sure I can help you. It's a big topic area to cover. Perhaps you can use Google an start with the basics?
>>1069416 Never said anything about you, kid. I just laughed. Literally. I actually chuckled. Sorry you didn't get the joke.
Anyway, Mister Pro Gambler, please tell us more ways to wisely grow our wealth. We know you advocate poker and day trading. What else? Honest question.
>>1069425 Invest in businesses, create businesses, network with wealthy businessmen. That's what I use poker a vehicle for, other than using my natural born ROI to generate more money. I've gotten high with a cspan exec at a game before. Smart dude, though, really easy to read.
>>1069449 Krugman won the Nobel, too. He's just as full of shit
There's a word for people like you, who take everything academics say at face value, ignoring real world evidence: students. I give you 2 years out of college before you realize academic awards are as big a circle jerk as the Oscars
Here's an academic study in which 100 monkeys randomly picking stocks beat indexes. So if you get sick of beating the market day trading, you could just throw darts at a list of stocks and beat index funds
>>1069480 >Seriously, the trick behind the outperforming portfolios had nothing to do with monkeys or darts. It’s all about smaller company stocks and value stocks outperforming the market over the period. I hope you learned something today about why a good actively managed portfolio will always beat indexes
>>1069481 >Billion dollar firms pay individuals six figure incomes to gamble all day Yeah, they dont do that, familia
>>1069481 Daytrading requires patience and studying. I've been studying for over 2 years. Sometimes I wait for several hours before making an entry that suits my setup. Some days I don't take any trade at all! I work on increasing my size rather than making more trades.
>>1069405 HFT also get in front of big players when they detect that some player is making big executions or places a exceptionally large order. In my country we can see who and what players are trading, we can see, for example, Goldman Sachs placing a large buy order a few ticks under current price, so HFT bots look to buy ahead of it.
>>1069485 >the trick behind the outperforming portfolios had nothing to do with monkeys or darts. It’s all about smaller company stocks and value stocks outperforming the market over the period Small cap value index stocks have indeed outperformed broader market indices over statistically significant periods. There needs to be research into this, but it looks really promising.
None of this has anything to do with day trading.
>>1069491 >Daytrading requires patience and studying Citation required.
Please provide some credible evidence of a correlation between skill, intelligence, experience or resources, on the one hand, and making profitable daytrades, on the other hand.
>>1069528 Oh yeah, Im not denying that they have a clear upper hand. But that anon actually thinks they are just getting lucky and there is no correlation between skill, time invested, and the ability to outperform indexes
Daytrading is most likely a terrible choice for most people, but it is very profitable for many who do it right
>>1069524 >So you really do think that billion dollar firms are paying individuals millions of dollars to sit around "getting lucky" all day? I already explained above that its possible to make profits but still underperform the broader markets. I shouldn't have to repeat myself in the same thread. If you're going to participate in an intelligent discussion of the topic, it would help if you read all the posts, even the ones you didn't write.
The existence of the day trading industry does not mean that day trading is an economically optimal activity. The existence of lotteries does not mean that playing the lottery is an economically optimal activity. The existence of the casino trading industry does not mean that gambling is an economically optimal activity.
It's time to put this tired logical fallacy to bed. If you want to prove that day trading beats indexing on a risk adjusted basis, post some direct evidence. Thanks!
>>1069535 So you think that thousands of billion dollar firms continue to pay individuals millions of dollars to not outperform indexes when all evidence suggests they do indeed outperform indexes every single year
>>1069313 It's probably possible, but it'd have to exploit a serious structural weakness, like a pretty fundamental point about statistics or something, likely something that not many people know about yet.
Alternatively you could compete with raw computing power or some machine related way. Otherwise, what this guy said: >>1069340
>>1069411 There are lots of roulette wheels landing on 6 every day, too.
>>1069549 The fact that there are thousands of individuals being paid a base six figure salary plus many percentage points of commission on their profits and still beating indexes every year is enough evidence there is more to it than luck.
There is at least one prop trader who posts here now and then. Next time he does you should take the time to "lurk moar" and read what he says. It's very informative . But my guess is very soon you will spreg out like last time and start copy/pasting the same page of "hurr durr" 45 times in one thread
>>1069577 >You said "all evidence suggests they do indeed outperform indexes every single year." Where's that evidence? The fact that beating indexes is their job and they are still employed. People make very lucrative careers out of beating indexes.
>>1069558 Futures. Not American, I trade Dollar and Index futures. The technicals are the same, with some exceptions, but you should definitely focus on one stock or market. On exceptions: some news hit some markets more intensely than others.
>>1069580 >The fact that beating indexes is their job and they are still employed. People make very lucrative careers out of beating indexes. That's not evidence. That's a logical fallacy, as I've previously explained.
So I guess your statement was false? Color me shocked ... SHOCKED!
>>1069577 The fact that traders make 100k+ a year. It's true that some are being replaced by HFT bots, but HFT strategies are limited and no algos can outperform humans as far as low frequency trading goes. You should step inside an institutional trading desk and see how the sales and trading desks work together.
>>1069603 You keep saying the same thing over and over. The fact that daytrading exists does not mean its a strategy likely to beat indexing.
I'd love to see some evidence that these prop firms routinely beat the benchmarks through trading activity (and not other revenue generating strategies that they use). Honestly, it would be remarkable and earth-shattering.
But you don't seem to have it. Color me shocked ... SHOCKED!
>>1069612 >posts isolated example I honestly thought we were past this. 5% of daytraders beat the index. You just named one, assuming you're correct about their numbers (I don't know and I don't care). I assume there are hundreds or thousands of others in the same boat.
Doesn't change that fact that on a risk-adjusted basis, its a losing strategy. You don't know if you're in the 5% until after you trade. And even if you do fall in the 5%, you probably won't do it again in the next testing period. That's how statistics actually work.
>>1069627 >actual industry evidence Thousands of intraday traders being paid millions of dollars to beat indexes. What you're saying is, "prove being an NFL quarterback takes any skill and isn't just luck." Well, of course you can't prove it, but it's an absolutely ridiculous position that no reasonable person would take. If NFL quarterbacking was just luck, teams would hire Mexicans to do it for $10/hr, instead of pay Tom Brady millions. So, essentially, the fact that is a high paying job is all the evidence necessary.
>>1069627 >Doesn't change that fact that on a risk-adjusted basis, its a losing strategy. That's like saying being a football player is a losing strategy, because most people who try to become football players fail. It is just a hard to master skill, just like Engineering is to Social Studies.
First, we know that skill translates into performance in sports because we see it on the field every game. By contrast, 95% of day traders can't beat an index no matter how much experience, intelligence or resources they may have. Furthermore, there are academic studies showing that overperformance in stock trading are due to luck.
Lastly, and directly to your comment, we know that the highest paid advisors on Wall Street can't beat the indices. If effort, time, or research was a determinative factor in investment performance, then we would expect to find professional Wall Street trading firms regularly outperform index benchmarks. After all, these trading firms have top educated traders, massive research staff, and unlimited resources. Yet 90% of these firms can't even beat an index over time periods as short as 5 years.
>>1069661 >So, I'm still waiting for that contrary evidence. Because I've just proven that a professional trader having a "high paying job" does not mean that they will outperform the market. Why would a bank or institution hire them, then? That's job market 101.
>>1069660 >That's like saying being a football player is a losing strategy, because most people who try to become football players fail. Risk adjusted reward, son. The salaries of NFL quaterbacks justify the risk to those with enough potential to possibly make it.
If day trading paid 20-1 gains over indexing, then we'd have an interesting situation. But it doesn't.
So we're right back where we started. Anything else? Thanks!
>>1069661 We arent talking about mutual funds and 99.99% of all quarterbacks will never make the NFL. You're legit retarded if you think billion dollar firms would keep hiring people who dont regularly beat index benchmarks year over year
>ya just can't beat indexes i tell ya >ya can't >pure luck, literal dart throwing
The objective of trading/investing is more about how to neutralize your risk then seek out where you can maximize returns. The people at the top are more worried about what risk they'll face rather than what returns they may obtain.
>if you can't beat an index you might as well just kill yourself
>>1069681 Daytraders are paid a base salary in the six figures and then huge commissions. What kind of fees do you think they are generating? I'm curious as to your misconceptions of an entire industry
>>1069680 You make an interesting point, but I don't think many day traders are playing to hedge risk. Some, sure, I could see that. But I'd be surprised if that was prevalent.
The average investor, on the other hand, has to do serious risk management consistent with their life situation and goals. As such, the individual investor usually has to sacrifice gains for lower volatility.
It really highlights how bad day trading is. Even without the real-world limitations of the average investor, day trading can't compete with simple indexing.
daytrading produces lots of comission costs and costs thru spread that's the problem. prolly 4/5 would beat it easily without trading costs. trade stocks but i would not advice to day trade.
then again. when people talk about beating the index i dont even know if they are talking about the percentage against the indexes or currencies or the percentage after the leverage strategies allow you to use. so you might be getting worse return than sp500 but much better return as you are able to leverage your ass up.
hedge funds cant be comparable to small private investors in any way. it's a completely different game.
even warren buffet quoted the shit. and nobody thinks warren is a trader like cohen etc. he is just a investor.
“If I was running $1 million today, or $10 million for that matter, I’d be fully invested. Anyone who says that size does not hurt investment performance is selling. The highest rates of return I’ve ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It’s a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that.”
>>1069708 You're missing the point of Warren's quote. Warren is basically saying there are fewer opportunities to effectively deploy $50 million in capital versus opportunities to deploy $10 million. It has nothing to do with trading commissions.
Personally, I've never like that quote because it sounds like apologistic bullshit, but on the other hand, I've never managed a portfolio of more than $50 million.
>intraday prop firm trader sees reports of a hurricane in Argentina >the hurricane is set to pass over major cane fields >comes into work and buys sugar futures on leverage while shorting stocks in the state-owned cane company >hurricane annihilates cane fields and sugar futures soar >trader closes his position with a nice 4% gain, taking 1% commission >drives his $120,000 Tesla back to his million dollar mansion and bangs his supermodel wife
>somewhere, hundreds of miles away, in a trailer in Oklahmoa, anon wakes up at 1:30PM, wipes the cheetos off his acnecovered face, fills a bowl of Captain Crunchberries and cracks a mountain dew >anon logs onto /biz/ and proceeds to educate the world.. >PROP TRADERS ARE JUST LUCKY ITS SCIENTIFICALLY PROVEN THERES NO SKILL JUST CASINOS AND GAMBLING THE DENIAL IS REAL
>>1068801 it is for most people, especially the random amatures who try their luck at the various equities day trading shops across the US
on the other hand there are people out there consistently making money using intraday trading strategies - both independent guys and prop firms, hedge funds... mostly these are automated or semi-automated strategies
there is a guy in the other daytrading thread who is seemingly unaware of this and has now gotten quite butthurt to the point where he's resorted to repeatedly copying and pasting the same reply with a few scientific papers in order to argue that any intraday trading success is down to 'luck' - it is amusing
And that one was brilliant. The little pauses - the blank stares through the fourth wall - laughed all the way through it.
(Because I made the same fucking mistakes when I was starting out. In fact, I still make them today. They cost me a bit less and I don't make them as often, but I still fuck up, and for the same reasons, as the n00b does.)
there are daytraders in stocks in the US that are basically amateurs who've opened an account at a brokerage firm and pay a fee to sit in the office/rent a desk - these guys mostly lose money... and these are the people typically studied in the papers posted in the other thread by the poster who sounded like a stuck record
on the other hand there are propfirms in chicago employing futures and options traders to trade the firm's own capital, they'll get sacked quite quickly if they're not good and they will indeed get a salary and bonus
in Amsterdam there are a few options marketmaking firms that have been consistently profitable in intraday trading for years now
in London there are prop firms that both back traders to trade their own capital and will rent desks/clear trades for small prop firms, start up hedge funds and individuals... though the individuals who rent desks tend to be ex prop traders rather than amatures and there are far fewer of them these days - HFT has taken over... you need to be developing/running an automated strategy for the most part, using colocated servers.. though there are a small number still manually trading
>>1069014 >because there are automatized systems that do this and there is no way a human can beat a computer. What a load of steming crap! Because these systems (be it a trading system or a flight sim) are using MODELS of reality.
Let's say that a model for trading is like this:
A + B = C
If you know two of them, you can tell the third with total accuracy. And the model has worked so many times that people assume that it's an accurate description of reality.
But if A = 10302 and B = 14890 then the model is like this
A + B = C + 1
And if enough people are using the model with the small flaw, then the model will eventually collapse.
I got no dog in this fight but I will say that people who are truly successful at this tend to shut the fuck up, unless they're narcissists. That might skew whatever sample size people are using to argue the merits of day trading. I notice that the better I get at it, the more I tend to tune out pissing contests, not that this conversation is one, but you know the type of conversations I mean. They just end up becoming more noise to filter out.
>>1070414 Day traders do better than gamblers, statistically speaking, because there is a built-in positive (long) bias in the markets due to external influences. Since any trader can (and most do) play the long side of the market, the odds are always slightly in your favor. That why making profits as a day trader isn't remarkable or unusual. (What's remarkable and unusual is making profits in excess of the index benchmarks, for all the reasons previously discussed in the thread.)
By contrast, the gambler never gets to play the house side of any wager. Even playing the "Don't Come" line in craps with full odds, the best odds any gambler can ever get is something like 49%,
Perhaps you've never heard of rhetoric, but to call day traders "gamblers" doesn't imply that they face identical odds as, say, casino players. It simply means that like casino players, they take chances that are statistically know to be suboptimal.
>>1070443 >By contrast, the gambler never gets to play the house side of any wager. Even playing the "Don't Come" line in craps with full odds, the best odds any gambler can ever get is something like 49%,
professional poker players, sports betters and black jack card counters do
I guess that is the difference they have an edge
similarly with daytrading, the average chump at a brokerage/daytrading shop who goes in and rents his desk will have no edge - he has to overcome his fixed costs, his commission costs and essentially he's just trading random noise. If you look at a large sample of these people you'll see a similar result to Casino gamblers, they'll mostly be losers and the few winners will mostly be lucky (not necessarily all though - there is always room for exceptions).
You've then got the established firms involved in high frequency trading, options marketmaking etc.. they've got an established edge, their strategies have been created through statistical analysis of terrabytes of price data - they've got hardware edges too - colocated servers, microwave links enabling them to arb small price differences between exchanges etc..
There are also various independent pros, people who've worked on these sorts of strategies but are now self funded, also using colocated servers, automating their strategies but without the resources of the larger firms - they'll typically not be the fastest so can't directly compete in straight arbs etc.. but there are other inefficiencies that aren't scalable.
Lastly there are ex locals(ex floor traders) - some may know a particular product intimately, have various connections in the marketplace and have an information advantage
bottom line is the need for an edge, by default the majority of amature day traders won't have one - some might survive for a short time by luck alone but in playing a negative expectation game your risk of ruin increases the more you trade...
>>1068801 Because skill is only relevant in long trading games? You can't build anything meaningful in a small time frame. You're literally just a compartmentalization of risk for a firm day trading. Most good day traders are only a bit better than lottery winners.
>>1070650 i think that daytrading in its normal context is completely separate from what the big banks do. i'm sure theres a dictionary definition that disagrees, but in most people it evicts the memory of people sitting in their basement playing stocks/futures
the prop and bucket shops are "sponsored" day trading, hedge funds can be close to it depending on the size (some are just bucket shops in disguise)
in this day and age most bank traders are "flow" traders due to volker and a number of other things. this means they'll execute clients orders on an agency basis or with a guaranteed benchmark. i think /biz/ is deluded into thinking working at a banks trading desk is the same thing as trading at home
>>1070659 depending on the asset theres a few ways it normally happens in liquid markets -- this is why sell side guys have been called flow monkeys in the past few years
1) client will call asking for the price on x, sales will contact trader and find out the market and quote is given back to the client. there may be some back and forth, then client either takes the price or goes elsewhere. if the order was large enough to warrant this probably its not in the traders inventory so he will try and hedge/cover on the open market. during all this happening another client may be interested in the other side and he can try and unload it there. this is essentially market making but not always termed that way. illiquid stuff trades this way a lot too
2) client will call asking for x on an agency basis, sales books ticket to trader and trader will execute it on the open market. trader and sales will collect commission. in some spaces the trader isn't even required here, sales can just fire it off in an execution algo or the like. this has become more frequent in the past 5 years with the 'salestrader' role. note that sales people cannot hold inventory, they can purely act as an agent
3) client will call asking for x at the eod price (or some other benchmark like vwap, etc.). sales contacts trader to see if they are interested and if so sales tickets it over to trading. the goal for the desk here is simply to pick up the product with a better average price than they are giving it to the client to at the end of the horizon. they can do this by filling it from inventory or other trading, at the end of day their profit (or loss) from this activity id the difference between their cost and the guaranteed price to the client.
>>1070639 >places like citadel may have an HFT arm but its not part of their hedge fund portfolio
there is good reason for that, HFT strategies, marketmaking only requires limited capital and provides quite large % returns - no point taking on client funds when you can run the whole operation with proprietary capital and keep all the pnl yourself
IMC, Optiver, Jane Street all make good returns simply from proprietary capital and pay out most of it to directors, employees etc.. as they've got no need to reinvest much
>>1069073 Because technical analysis is a fucking joke. So is FA. People in this thread and OP are huge faggots. Unless you're account is in the 500k+ range, trying to day trade is a complete waste of time. Go out and make some real money first you cucks
to the person who keeps pasting the same papers covering amateur daytraders and then extrapolating from that that therefore all intraday trading is down to luck (despite the existence of successful firms consistently trading huge volume intraday)
>Abstract: We examine the profitability of high frequency traders (HFTs). Using transaction level data with user identifications, we find that high frequency trading (HFT) is highly profitable: HFTs collectively earn over $23 million in trading profits in the E-mini S&P 500 futures contract during the month of August 2010. The profits of HFTs are mainly derived from Opportunistic traders, but also from Fundamental (institutional) traders, Small (retail) traders, and Non-HFT Market Makers. While HFTs bear some risk, they generate unusually high average Sharpe ratios with a median of 4.5 across firms in August 2010. Finally, HFTs profits are persistent, new entrants have a higher propensity to underperform and exit, and the fastest firms (in absolute and in relative terms) earn the highest profits.
as for HFT not being daytrading that depends on what you want to define as daytrading
at a wider level any positions not held overnight = daytrading
if you're merely referring to the amateurs who deposit some cash at various equity brokerages offering rented desks, leased lines etc.. in the US then most of them will lose and of the people who do win quite a large portion of them may only do so for a short period as a result of mostly luck
on the other hand - in the previous thread, there was a poster (presumably you) shitposting with the same pasted replies in response to the existence of firms like rentech, IMC, optiver etc..
there are various shades of gray here... from the likes of rentech with a clear edge in the markets through to the amateur punter - to dismiss all intraday trading is naive
>>1070978 >>1070966 Kek. So first you want to change the goal posts (day trading profitability = prop firm profitability) and now you want to change the definitions (day trading = all intra-day activity).
You're a walking encyclopedia of logical fallacies and bad argument techniques. Funny stuff kid.
>>1071035 >I've not change any goalposts Yes you have. Every time you get presented with irrefutable academic evidence about the futility of day trading, you change your argument. It's obvious and pathetic.
>propfirms Not that anon, but let's be very clear about prop firms since they generally engage in a variety of trading activity. To the extent that they engage in day trading, 95% of them fail to beat index benchmarks, after costs. This is established fact. You've been asked repeatedly to demonstrate otherwise, and have failed to do so. At this point, the argument is over. Day trading is a failed strategy.
In addition to day trading, many prop firms (the larger ones, and the ones that tend to survive) also engage in other activities such as market making, liquidity services, algorithmic trading including HFT, and front-running (both legal and illegal). These activities -- none of which are day trading -- do tend to generate profit.
So if you want to discuss prop firms like a broken record, you're going to have to be clear about which of their activities we're talking about. It's well established that their non-day-trading activities are profitable. Therefore unless you can demonstrate specifically that the day trading activities conducted at these prop firms are, themselves, profitable, then you have no argument at all.
>are you only referring to the amateurs There's no difference. Day trading is day trading. And day trading is not HFT, market making, algo trading, front-running, etc. Stop changing the definitions, and stop moving the goal posts.
Why do you think we've been asking you to post some proof -- any proof -- that day trading is more profitable than indexing?
And why is it that after more than 24 hours you've posted nothing at all?
where - point out where I've changed my argument - my post I highlighted to you ought to be self explanatory re: my position on this subject
>>1070530 >To the extent that they engage in day trading, 95% of them fail to beat index benchmarks, after costs. This is established fact. You've been asked repeatedly to demonstrate otherwise, and have failed to do so.
no I haven't I've given examples of successful prop firms and given you a paper you crave...
are you actually referring to prop firms - i.e. those firms engaging in proprietary trading or are you referring to brokerages that allow clients to deposit their own funds?
>There's no difference. Day trading is day trading. And day trading is not HFT, market making, algo trading, front-running, etc. Stop changing the definitions, and stop moving the goal posts.
no one is moving any goalposts here - my previous post I highlighted for you gave a clear explanation of my position on the matter - I've asked you a simple question - are you refering to the amatures in the various equities brokerages across the US renting desks when you refer to daytrading
I've already pointed out that daytrading can encompass any trades not held overnight and I've been completely clear with my views on the various agents involved in intraday trading
>>1071060 >Therefore unless you can demonstrate specifically that the day trading activities conducted at these prop firms are, themselves, profitable, then you have no argument at all.
first you need to clarify what you're refering to by daytrading - the fact that optiver, liquid capital, mako, IMC etc.. are profitable is public record... most of what they do is marketmaking, liquidity provision - quite a lot of if is highfrequency these days though not all for all of those firms...
I worked at one of those firms, I've actually got experience in this industry.
I think you're confusing cheap equtities brokerages that allow people to deposit funds with prop firms... they sometimes use that name but it is incorrect really - a 'proprietary trading firm' is one that uses its own capital
The physiological effects of watching your daytrade go down in value, in real time, are uniquely excruciating. You will start to shake, your heart rate will increase, you will start to sweat. You will feel itchy, have racing thoughts, paranoia, and the only remedy is either watching your position go up, or selling at a loss.
It is not worth it. I never made any money day trading. But I've made plenty of money investing.
>>1071091 >>1071094 Please stop serial posting for attention, kid. Gather your thoughts and put some effort into your posts.
If we need to set the definition of day trading in order to prevent you from changing it later, then let's go with the SEC's phrasing:
And yes, we do exclude market-making, algo trading (including HFT), and front-running because the profit generator in these forms of intra-day activities is separate from the trading decision itself. I don't know of any agency or reputable academic that defines "day trading" to include any of these activities.
So once again, the ball is in your court. Do you have any evidence that day trading is more profitable than indexing? It's a straight-forward question, kid. I'm not trying to trick you. Just answer it.
>>1071105 More definition games? Do you think you're fooling anyone?
You've lost the argument and retreated onto the low road. Quite sad for someone who claims to be a former day trader. You'd think you'd know the difference between day trading and HFT, for example. I guess these prop firms will hire anyone. LMFAO.
>>1071103 I'd also point out that on the subject of moving goalposts you were, in the previous thread, using your luck argument and copying and pasting the same reply in a childish manner in response to examples such as HFT hedge fund rentech and options marketmaking & HFT prop firm optiver etc..
now it seems you're accepting that HFT, market making etc.. can be profitable
>>1071117 >you're accepting that HFT, market making etc.. can be profitable I never claimed otherwise. If you have a quote you'd like to post to prove I'm a liar, please feel free.
My position remains the same that it always has been: day trading is less profitable than indexing.
See, that's called a simple, direct statement, which I've supported with scientific and academic evidence. Sure would be nice if you did the same. Instead, we get definition games, shifting arguments, and personal attacks.
So once again, the ball is in your court. Do you have any evidence that day trading is more profitable than indexing? It's a straight-forward question, kid. I'm not trying to trick you. Just answer it.
>>1071124 >Do you have any evidence that day trading is more profitable than indexing? It's a straight-forward question, kid. I'm not trying to trick you. Just answer it.
Depends what you mean by daytrading?
I'm not trying to trick you either - I want you to explain what you mean... I can't answer your question unless you clarify it... I've been quite clear on my opinion re: different intraday trading activities too
>>1071133 >point out where I've shifted my argument You've tried to call HFT day trading. You've tried to call market making day trading. You've tried to call algo trading day trading. You've tried to call front running day trading. You've tried to call all prop firm activity day trading. You've tried claiming all prop firms are profitable. You've tried every argument under the sun, EXCEPT the argument that day trading is more profitable than indexing.
You asked me to define "day trading" for you, and I did. Then you tried changing the definition and moving the goal posts. Now you just spam post claiming that you dindu nuffin.
This is pathetic. Using the definition that I gave you (>>1071098) AS YOU REQUESTED, do you have any evidence that day trading is more profitable than indexing?
>>1071153 >definition includes all of those activities you're trying to exclude No it doesn't. What part of "exclude market-making, algo trading (including HFT), and front-running" do you not understand?
Stop with the definition games. Stop with the dindu nuffin. Stop with the deflection. This is boring and pointless. I'll not give you the attention you so desperately crave unless the discussions gets back on an adult level.
You have the definition. You have the question. Now answer it.
>>1071176 well in that case no, I've not advocated for them and you're unlikely to find any scientific papers showing that amature punters involved in that game will likely beat any index... though I've said that they'll mostly lose from the start...
>>1071332 >Prove it without linking to a twenty year old study You're not very smart, huh? I already posted a 2012 study. Go read it. >with an incredibly small sample size You're not very smart, huh? I already posted a study that looked at 15 years of day-trading data and over 3.7 billion transactions. Go read it.
Kek. This thread is hilarious. Watching the day trading advocates shift and bob and dodge and duck and dive. Too fun.
>>1071212 This. My statistics methods were dogshit, because robust useful stats take teams of people to run. Basically follow the market makers. Easy enough when you observe the supply/demand style of trading they do.
>>1071366 You can't reason with index fags. They will hold onto their shitty funds come hell or high water. "The market always goes up in the long run" Ya Sven, that is if you have the discipline to hold for 50 years and make $20 a year in the meantime while the pro traders make $300 every 30 minutes.
>>1071332 he's probably right with respect to the guys pointing and clicking with a mouse...
the vast majority of them will lose and a large portion of the small % of winners will be lucky
you're unlikely to find any evidence that those guys have any sort of edge, I wouldn't rule out the possibility completely - there are various ways you can make money in the markets but largely it is correct
problem is the poster you're arguing with is more than a bit difficult, likes his grandstanding and refused to even clarify his position when asked...
>>1071369 Idiots like that fail to note that in ANY industry only a small portion of overall contenders "make it" In other words the trend in trading is virtually the same across all entrepreneurial lines. The reason people fail in trading is not knowing enough mathematics, relying too much on what they learned in school, and not being innovative enough. All imo senpai.
>>1071365 well answer the question then re: what exactly constitutes day trading in your opinion
the SEC definition you've cited to is broad and includes all intraday trading - it doesn't separate automated approaches or semi automated approaches from manual approaches... yet after repeatedly being asked you've refused to answer or clarify what you're asking
>>1071376 You had your chance, kid. You asked for the definition, and I gave it to you. You just didn't like it because I excluded HFT, market-making, and front-running ... none of which any reasonable person would consider day trading.
Now the morons have arrived to shit up the thread with their indexing memes and lies about profitability. Now its too late, and you failed to win the argument once again.
See you next thread, Mr. Former Prop Trader who doesn't even know how prop firms make their money. It was fun (again) taking you to the woodshed.
To summarize, in closing:
1 All existing evidence proves that day trading is a suboptimal strategy compared to indexing.
2. Day trading success, rare as it may be, is entirely due to luck.
3. Day trading returns do not justify the incremental risks associated with the strategy, making it a poor economic decision.
>>1071407 bit of both... he's been asked several times, all he needed to do was communicate clearly what he was including within 'daytrading' and I'd have been able to answer his question a while back... instead he just carried on with the ad hominems/silly pictures etc...
>>1071425 >>1071435 yea I was browsing biz 6 months ago and he was doing the same thing. Definitely same guy, posting style is too similar. I come back this month and he's still doing it. I can't imagine the time he must dedicate to this. Either severe autism or paid shill.
>>1071405 >1 All existing evidence proves that day trading is a suboptimal strategy compared to indexing. Keynes and Buffet disagree.
>Skilled investors can maximise their long-term return through deliberate selection of stocks. >Unskilled investors (this is you) can maximise their long-term return by adopting a deliberate policy of no selection. (They should invest in the whole market via a low cost index tracking fund.)
>>1069734 >>intraday prop firm trader sees reports of a hurricane in Argentina you do realize at this point the news would be immediately priced into the futures and the trader would have to act in nanoseconds to make a profit, right?
Anyway, i'm a swing trader and altough daytrading is objectively difficult, i've met people making a living scalping futures and fixed income off the book. There was one poster as well who used to come here, scalped DAX and FTSE if i remember correctly, holding time of no more than a few minutes. Cool guy, too bad he doesn't come here anymore, courtesy of your autismo rage. But i digress. Pricing doesn't exactly happen in a few "nanoseconds" but it takes quite some time, usually some hours, since the big orders from the institutional side can't be liquidated in a few seconds. This generates momentum, and this momentum can be usually seen on the order book, it's nothing fancy.
Now, about daytrading. It is true that daytrading can generate HUGE returns, percentage wise very quickly. But at the same time, these returns can't be compounded so you become a trillionaire in a few months. Why? Because the bigger your positions become, the harder it gets to find liquidity to fill your orders. To this, you must add the action of HFTs and smaller momentum traders who can use small positions to front run your order, so you get a worse price.
Hedge funds are unable to achieve similar returns because of the sheer size of their AUM. Which is why they must keep their orders small, or simply invest for the long run, where negative effects of executions get minimized (both cases, they usually submit smaller orders across multiple price levels).
I have seen far too many retards in this thread, no wonder skilled traders stay the fuck out of here. It would be a wise choice to speak if and if only you have anything valuable to add, not just when your autism compels you to post memes and hearsay
>>1072471 I actually made a thread a few months ago, wanted to hear about people who actually did this for a living on the retail side. Maybe being anonymous would have helped. I was looking for some honest ideas for shorter term trading (being a swing trader is very boring, when done correctly)
I had something like 45 replies in 6 hours. Not a single one displayed an ounce of trading experience, just memes, hearsay, shilling indexes and scamcoins and people coming out of the woodwork with 50 years old EMH papers. Tried to explain patiently that returns like 20% per month are not a wild fantasy, while dealing with small accounts and if you are willing to put up with some occasional big drawdown. Nothing. All of those 45 experts in HFT and value investing kept memeing until i deleted the thread.
>>1072463 Yeah this pretty much sums it up. I left a few months ago cause every time a good thread would come up with someone knowledgeable dropping tips, 5 posters would come in and tell him how the market works. I cant even count how many times i have seen that fucking mutual fund study posted out of context.
Im not talking down index funds at all because they are a useful vehicle for a lot of people, but we need a Boglehead containment board
>>1072477 It's agony, it really is. And other imageboards don't seem to be any better, and all other non-imageboard sites don't rely on anonymity, and therefore it skews opinions.
I tried having a discussion a while back about freelancing in general, nothing too dramatic, but all I got were some memes. It's as if no one actually reads anything and responds, simply jumps to their comfortable bias and spews it online.
The quality level really just drags down any hope for actual advice (leaving people to steer their decisions with horrendous tidbits of info), nothing we can do either, you try to bring in strict rules, people circumvent them and call mods nazis. You try to discuss X, and you'll just get out shitposted 10:1.
If you have a billion dollar fund you are managing you can't trade for under 5% gains because you influence the stock price. An individual can. But 5% isn't much when you factor in commissions and spread.
So this means for a 5% move in a stock to be meaningful you would need an account worth more than around $20,000.
Every fucking day-trading thread, we get the captains of finance declaring their expertise, experience, and huge returns.
Know what we never get? Proof.
All you fags who "left" /biz/ (but are obviously lying) only "left" because no one believes a fucking word you say, and you didn't get the attention that you crave. I'm sorry your Mother's were cold bitches, but pretending to be a successful trader on 4chan is not prescription for your mental ills.
So the 3 or 4 of you in this thread can enjoy your little role-playing fantasy. It's pretty telling that the only people who ever ask you for advice are penniless NEETs and people who speak no English. Meanwhile, indexing threads get hundreds of useful replies, adult discussion, and people actually take the advice to heart, to their betterment.
>>1072547 If you would shut up and listen you'd see that what usually happens in a daytrading thread is one anon with some expertise or industry knowledge posts evidence of his experiences and then answers questions of people who would like to learn something and we all discuss amongst ourselves. That's about 1 in 4 posts in the thread. The other 3 are idiots like you who cant shut your mouth long enough to learn anything useful.
I only came back here last week to discuss energy stocks and see this place is worse than when I left 3 months ago
>>1072116 >I'm looking for Fitbit to pop on earnings reports today You're going to be "looking" for another three weeks, as that's when they report. Maybe you can use some of that 347K to get a reliable news source, that's my stock tip of the day.
>>1072615 >>1072646 There hasn't been a single question posed that I haven't answered. Is this some new deflection technique that you've developed?
You guys, on the other hand ... kek. Straw men, ad hominems, changing definitions, moving goal posts, appeals to authority. Every single one of your posts is a catalog of logical fallacies wrapped in a shell of Dunning Kruger with a healthy sprinkling of denial on top.
Me? I don't need to avoid questions. That's what happens when you're on the right side of a one-sided argument. If you have something to ask, ask it. If you do so in a mature and respectful manner, I'll answer. I'm here to teach people, even you.
>>1072673 Listen up big boy, nobody gives a shit. For real. Your mastery in memes and internet arguments says a lot about the amount of time you put in shitposting on 4chan. Literally no idea why you're doing this, maybe you think there's going to be a huge pile of internet pussy, all lined up for you if you shitpost long enough. Who knows. But you have nothing to teach, your posts contain zero contents, and i'm indulging your autism merely to see where it will lead you.
Granted, people in this thread are fucking clueless and you'll never see me defending daytrading. And i already stated that although returns in percentage are big, it doesn't mean big money. In fact i'm pretty sure that value investors make much more with buy and hold. Ironically, i have a parallel portfolio with a good 30% of my savings in it. You can do both
Comparing trading and investing just goes to show how cluless you are. And for the record, i'm not selling a product, nor a service here, reason why you won't see me posting an audited statement to appease your shitposting spree.
Now please, go ahead and waste some more bandwith, choosing the biggest words you know for all up for all the internet pussy to see. You'll get laid in no time, champ
>meanwhile i'll try to keep this open, anybody who wants to get serious or at least has a vague idea of what he is doing, i'll try to share the little i know
>>1072694 As a first pass, I'll define day-trading as the intra-day purchase and sale (or short and cover) of securities by a (human) trader where the primary or exclusive expected profit generator from the transaction is the trader's real-time judgement as to the future price direction of the security.
HFT and other forms of algorithmic trading (or "automated strategies" to use your words) are excluded because trades are not executed by a human trader and/or trade decisions are not decide by the real-time judgement of a trader. Market making and liquidity services are excluded because they are value-added services where the profit generation is derived principally from the service. Front-Running is excluded because the expected price movement is a function of the associated trade, not the real-time judgement of the trader.
I've said all of this repeatedly in the thread, but I'm happy to distill it down for you again here.
Day-trading is not dependant on who is conducting the trade. The same definition applies to "amateurs" and "professionals". It makes no difference if you're day-trading whether in your mom's basement, a rented desk, or a prop firm
I've also said all of this repeatedly in the thread, but I'm happy to distill it down for you again here.
I think that re-answers all of the questions in your post. Hope that was helpful and that you now have a clearer understanding of topic.
>>1072895 >algorithmic trading (or "automated strategies" to use your words) are excluded because trades are not executed by a human trader and/or trade decisions are not decide by the real-time judgement of a trader
Because automatic algos that run without human supervision, making you $$$ while you masturbate to chinese cartoons are obviously a thing. Especially for the average home based retail.
>>1072903 >he thinks i'm going to post my statement >on 4chan But if you insist, you can check out on Darwinex or Myfxbook. Plenty of profitable traders there. Also tradingschools, it reviews a lot of traders offering education. They all have audited statements, at least the good ones.
And they all scalp from the book or spread trade on futures, as i suspected. Now you may stop
>>1072895 finally you answer the question after dodging it a bunch of times, yes I now have a clearer understanding of your pov
and in answer to your earlier question, no you're unlikely to find any papers providing evidence to support that sort of activity... in fact I'd already answered that when you were banning on about it earlier - instead you decided your silly pictures and ad hominens were more interesting
on the other hand when talking about human judgement in the context of intraday trading options marketmaking, though largely automated in some contexts is still reliant on human judgement in others... though direction doesn't matter much... tis gamma rather than delat that they're interested in
similarly intraday spread strategies can be executed in a semiautomated fashion - with eh algo used to just get in or out of the position but human discretion/judgement used with regards to market timing
none of this will likely be covered by any studies though
>>1072929 but yeah, as I've been clar on from the start... point and click trading... where some punter is taking short term directional bets on the direction of some instrument is going to result in the vast majoirty of people losing money, a small portion winning money and of those most will be from luck... there is the possibility of someone being successful in doing that based on skill - Navinder Sarao for example (though his approach was semi-automated in later years) but it is highly unlikely for most
>>1072919 >he posted 52 times since the beginning of the thred Now that's some dedication here, this guy will go places >>1072929 Stop indulging his autismo, he is clueless and just here to shitpost. You will never find unsupervised algos running the show (large tail losses), and daytrading nowadays is largely on semiauto (usually a few lines of code with a warning popping up when a trade is valid, you choose to take it or not). I repeat, the few traders i've seen trading with my own eyes were scalping from the book or using momentum models. Both cases, market profiling is a must if you want to do it. Again, zero experience in that dept
>>1072936 the other are to consider of course is having an information advantage - in relation to this:
>It makes no difference if you're day-trading whether in your mom's basement, a rented desk, or a prop firm
it does make a difference in some cases especially if you're talking about prop - if you're on the prop desk of a large commodities shop for example you can have an information advantage - insider dealing doesn't exist in these markets and you'll get the info about some accident shutting down a mine in chilie from your client and that information gets to the prop desk before reuters/bloomberg has it
ditto to prop desks at energy trading firms -especially if owned by a larger utility or oil company - they'll have a huge information advantage from which to make intraday trades
so I'll definitely disagree on the prop angle - there are prop traders out there making money from intraday trading
>>1072929 >finally you answer the question after dodging it a bunch of times, yes I now have a clearer understanding of your pov I added nothing new in my post that I hadn't already said before. But I guess you needed it in sound-bite format. Fine; I'm happy to help you learn however you need.
As for the rest of your post, I of course understand some trading can be a hybrid of autonomous systems and real-time human judgement. The problem with paying much attention to that in this context is that its impossible to study the relative efficacies unless you can somehow isolate the human and computer judgements.
That's why academic and scientific inquiries focus on day-trading as I've defined it. Its not only the most commonly used definition, but its capable of being isolated and studied because there are massive volumes of human trading data available to researchers.
Frankly, I think you were entirely disingenuous to pretend that you didn't know what I was talking about when citing day-trading studies. I think you were entirely disingenuous when you ignored the fact that prop firms engage in multiple forms of revenue generating activity apart from day-trading. Frankly, I think you were entirely disingenuous in manufacturing any disagreement with any conclusion I posted in this thread. You just wanted to argue for the sake of arguing, even though you well understood what was meant by "day trading." This being 4chan, I can't and won't hold it against you. But don't expect to win any praise for kind of sophistry. It's cheap pandering, and it certainly doesn't help anyone on this site make better financial decisions.
>>1072956 > tips fedora You literally wrote a wall of text without literally saying anything, beside big words to impress the guy you quotes. I rest my case, you have some severe and crippling form of autism and you should stop posting
Everyone else, this is the kind of guy you are taking financial advice from
>>1072967 Apparently you believe that disagreeing with you is equivalent to being disruptive. Despite the fact that I'm literally the only person in this providing actual evidence in furtherance of the discussion, and not personal opinions or anecdotal observations.
Every time I want to give you the benefit of the doubt, you prove me wrong. Lesson learned: you're just a stupid asshole too.
and no it isn't disagreement I'm citing as disruptive it is the unwillingness to engage in conversation/debate... I highlighted my views to you several times and they've been unchanged, I asked you to clarify yours several times and you dodged the questions for clarity entirely...
it is hardly just me holding this opinion on how you've acted in here, while I'm sure you think its all fine in your head the guy calling you an autismo is probably close to the truth
>>1072982 Nah, my win rate is barely above 30%. I have a simple trend following system, extensively back and forward tested. I use fundamentals to gauge trends. Trading a relatively small margin account while having a day job as an engineer working in the oil and gas industry
Your autstic fits of rage against people trying to have a mature discussion, and trying to share knowledge for free are really distasteful. You are not funny, you do not look brilliant, not knowledgeable. But probably since you are autistic, you failed to realize it. Again, i believe it is time for you to stop posting
I don't give a shit how much money any of you have. I already know that you're all poorfag NEETs (you are in a day trading thread, after all), but someone's wealth should be irrelevant to the discussion.
But then some autist shows up and says, "Here's the truth about day trading and you should believe me because I'm a successful day trader with tons of money and billions of successful trades" then he's made an appeal to authority. At this point, the veracity of their claims becomes entirely relevant to the discussion.
Now I understand that you're probably too stupid to understand any of this, and too lazy to even read the article that I linked. You're so dumb you can't even contribute to the discussion; you just jumped in to shitpost.
But I think it's hilarious to educate you chimps, even as you throw your own shit around. I die of laughter watching you try -- and fail -- to keep up with me on an intellectual level. So please keep it up. Comedy like this is priceless.
>>1073012 Case in point. Missing the joke this badly. I'm literally dying of laughter. Thanks, kid. Seriously. Great stuff.
>>1073207 >But you want proof of it, huh? Nope, I'd be happy with a proven track record of successful trades, regardless of the dollar amounts involved. That would would still mean he lied about 3 or 4 different things that he claimed, but I'm willing to overlook that if he could just prove his claim of being a successful day trader.
>>1072477 Although what I have hardly constitutes as proofs, I have been successfully day trading forex for almost a year now (25% return over 9 months with less than 10% drawdown). So far I have posted in threads telling my strategy, giving advice to noobies, etc. Every time somebody tells me that I'm shilling, to fuck off, or just frogposts. I even once posted a tutorial on how to copy other people's trades and earn 15% a month on average doing jack shit and the shilling screams were strong. I didn't use this system on my main account because I actually wanted to learn to trade for myself.
I closed out the account in December because I needed the money for school.
To you dumbasses who think no one goes after small traders (cumulative) well you're all full of shit.
Whales, the largest ocean mammals eat krill, some of the smallest creatures in the sea.
When JPM and RenTech and Goldman and BAML and Citi see your little shiity longs and shorts start piling up in the trade stack on their 6 flat screens you are going to get fucked bigtime. They will rip your face off and suck out your boogers in your floppy nostrils like little bitty oysters as they laugh about "the public" (that's what they call you) and the riches they provide the big traders.
>>1073411 You must have me confused with some of the other posters here. I'm not a day trader. I'm just one of those guys who hangs out in day trader threads and tells day traders that they're wasting their time.
>>1073469 >I'm definitely shouldering more than my share of the load. Doubtful. I have yet to see anyone here agree with your arguments. Then again, that probably doesn't matter to you anyway. Good luck in whatever you do for work!
>>1073481 >I have yet to see anyone here agree with your arguments. >Then again, that probably doesn't matter to you anyway. I don't come into day trading threads, explain the faults of day trading, and expect the day traders to see the light. You can't be involved with a trading strategy so universally disproven by academia without having depressingly high levels of self-denial. It's sad, but some people are just beyond help.
Me? I'm here to persuade the newcomers, the ignorant, and the gullible. Those who read this thread to "see what all the fuss is about." The promise of quick, easy money is quite seductive, as you know. People need to learn sound financial strategy early so they don't waste their prime early investing years.
>>1073615 >..said the guy posting once every 20 minutes for 3 days straight. Actually, there's no rule against being an active and engaged participant in a thread, especially since my posts actually relate to the topic, which itself is plainly business & finance.
On the other hand, you posting /pol/ memes (>>1073595) and threatening me with a ban (>>1073354), well that's another story....
I'm still willing to help with your portfolio, though, You seem to be in need a much help.
>>1073655 Again, you're not saying anything relevant to the thread, let alone business or finance generally. Perhaps you're confused and are posting on the wrong board?
So you certainly need some help with your investing, as evident from your posts. I recommend learning about the principles of the "Three Fund Portfolio" which I'm happy to summarize for you:
A three-fund portfolio is based on the fundamental asset classes, stocks and bonds. It is assumed that cash is not counted within the investment portfolio, so it is not included. On the other hand, it is assumed that every investor should hold both domestic and international stocks. The task, then, is to take these three basic non-cash assets — domestic stocks, international stocks, and bonds — decide how much of each to hold (your asset allocation); choose where to hold each of these asset classes, and finally choose a mutual fund to use for each asset class.
>>1073667 >this is the containment thread Correct! This is indeed the containment thread where we educate delusional day traders and role-playing NEETs who like to pretend that they have any knowledge about the markets or wealth. You're in the right place, kid!
Instead, what you all should be doing is focusing on your index allocations. Even if you are going to use a single Target Retirement fund, you should not take the shortcut implied by the use of a retirement year in the name; you need to decide for yourself what percentage of your portfolio you want to invest in stocks, and choose the fund that matches it. Even if you are going to use a single LifeStrategy fund, you need to decide which of them to use, based on the percentage of stocks each one holds.
One traditional rough rule-of-thumb is "age in bonds," or percentage of stocks = 100 - age. This is a conservative rule, and leads to smaller percentages of stocks than Vanguard chooses for its Target Retirement series.
The second decision is what percentage of your stock allocation should be U.S. (domestic) and what should be international. This is a much less critical decision because U.S. and international stocks have similar risk profiles and have similar long-term returns. In 2010, Vanguard increased the international allocation of its Target Retirement and LifeStrategy funds from 20% of the stock allocation to 30%, and increased it again to 40% in 2015.
>>1073671 Personally, I come to online forums and boards to glean first hand insight and knowledge from industry guys and experienced investors, not read copy/pasted Investopedia pages. I'd imagine thats why no one has take you seriously over the last 3 days
>>1073690 Don't believe anything I told you, if you don't want to. That's fine, and would probably be the smartest thing you've done your whole pathetic life, kid.
But you have no basis to dispute the peer-reviewed academic studies posted by actual experts in >>1069192. And since neither you nor anyone else in this thread has provided any contrary evidence of equal authority, only a fool would reach a contrary conclusion.
>>1073696 >can't engage in intelligent debate >instead, piss on the whole the field of study I'm sorry you're too stupid to understand the articles. Unfortunately, there's no coloring-book version for retards like you.
On the other hand, not everyone is meant to become wealthy. Darwinism applies in social sciences too, and you demonstrate with every post.
>>1073481 >Doubtful. >I have yet to see anyone here agree with your arguments.
Yup, that is the problem. He's claiming 'superior intelligence' and thinks he's 'educating' people but even people who'd agree with some of his views are put off by him. I know a few people have called him autistic and it is a bit cliched on 4chan but he's definitely lacking in EQ a bit... when an entire thread, including newcomers and people who don't daytrade, think he is a dick.
>>1073913 >but even people who'd agree with some of his views are put off by him He seems angry. Maybe he lost his savings on some shitty stock, and never got over it. Please anons, don't do what I did!
>>1073913 >>1074031 I've educated everyone who came into the thread with an open mind and who possessed a shred of intelligence. Notice how there's virtually no posts from young investors in this thread saying, "This sounds great! I'm going to try day trading!" They see through the bullshit.
But I'm not a miracle worker. I can't save all of you from your own inadequacies. Nor would I want to. The world needs poor people too, and you fill that role nicely.
>>1074190 Well bud, I'll tell you the problem with your argument, although I don't expect you to accept it. You're not controlling for suitability. The vast majority of people who attempt day trading lack either sufficient funds, free time, or most likely, both. That means 90+% of these people have less than $50-75K spendable and liquid, and/or must work another job. They're lost before they start, but you're going to insist on including them for the purposes of your argument.
If you were honest about it, you could admit that all you've proven is that the vast majority of those who attempt day trading fail (something no one here doubts), but this is largely because so few are qualified to begin with, not because of it being a "loser's game". Coincidentally, you also attribute the gains of the few who profit to "luck".
>>1074226 This has been everyones consensus. Daytrading is not right for almost everyone, but of course there are a few dedicated professionals who profit greatly from it. >but, muh Taiwanese studies!!!
>>1074226 I'd be inclined to consider your argument IF there were any evidence that greater capital reserves or additional effort had any correlative effect on investor returns. However, the available evidence proves exactly the contrary.
Let's be clear about that: the evidence isn't ambiguous or open to interpretation. The evidence directly goes against your statement.
This is why its hilarious when you morons try to insult me in an effort to sustain your edifice of denial: I'm not the one making these statements. These are the most respected financial academics in the world making these statements.
So when you throw your tantrums and scream that they're wrong, you don't even realize how foolish that makes you look. You're like cultists locked into a crazy belief system that denies science, academia, and the rational world. And you just can;t admit the possibility of being wrong, because then the whole thing comes crashing down.
Why else would you, after 3 days of this discussion, come back to a thread on page 5 of /biz/ and post about .... me. Not about day trading. Not about the strategy. About me. You're obsessed with me because you think that by insulting me, you'll protect your bubble of deniability.
Look, I don't have any intention of dragging you morons into the real world. I'm not a cult deprogrammer and I don't want the responsibility for breaking you down that way. It's not worth it to me. Your families aren't paying me to save you from your own financial stupidity, so you're on your own.
But I've done my job here. I've ensured that rationale thought stays at the forefront of the discussion, so that those otherwise vulnerable to being deceived aren't taken in by your lies. And I've ensured that your lot are contained to the containment thread. I can't stop your lunacy, but I can make sure you're not running the asylum.
>>1074269 >any evidence that greater capital reserves or additional effort had any correlative effect on investor returns I take it back. You're just plain stupid if you believe this. It's the inverse, you clown. The less money you have, the bigger percentage of your capital gets eaten by commission, fees, losing trades, etc.
>>1074280 So ... I make a statement that is based entirely upon and supported by researched evidence from peer-reviewed scientific journals.
You "disagree," and your tactic is to (a) insult me, (b) make unsupported, conclusory statements, (b) provide no independent evidence or support for your statement, and (d) attempt to undermine my credentials, even though I never relied on my own authority in the argument.
Can you even see how stupid this makes you look?
>Don't worry, its a rhetorical question, kid >I've already explained why you can't and won't acknowledge your logical fallacies
The irony here is that I'd really love the opportunity to evaluate some contrary evidence. I don't claim to have omniscient knowledge, and every time this topic arises I keep hoping someone -- anyone -- will advance the discussion by posting some new, credible evidence that merits re-evaluation of the day trading strategy.
Unlike you, I'm more interested in making money than "being right" or "winning internet arguments." I'd happily adopt any strategy that more optimally grew my wealth. If that turned out to be day trading due to new, credible evidence, then I'd be a day trader. No questions asked.
And yet, conversely, despite all available evidence, you guys not only refuse to accept the optimal trading strategy (indexing), but you actually advocate for one of the least optimal strategies ever studied (day trading). And then you invest all your energies into staying in denial so that you never learn from your mistakes.
If I cared one iota about you, it'd actually be a bit sad. But I don't. Darwinism is real, and I just don't think you're worth saving.
>>1074269 >additional effort has no effect on investor returns No study or individual has ever said this other than yourself. Why balance your portfolio, then? You cant possibly believe this, so why do you keep saying it?
>>1074339 >Why balance your portfolio, then? Portfolio rebalancing has to do with risk management, as you should know. Investors set asset allocations in their portfolio to meet their investing objectives (growth, income, volatility, etc.) and then manage their portfolio to maintain those allocations.
Why anyone would think rebalancing has anything to do with "effort" is beyond me. If there is some "logic" behind your question that I'm missing, you're going to have to do a better job asking your questions.
And, yes there is considerable evidence that the traders with the highest level of education, highest amount of experience, largest amount of capital, and largest amount of manpower are unable to beat indexing over statistically significant periods of time. I've posted the studies.
>why do you keep saying it? Because it's supported by peer-reviewed scientific inquiry, unlike anything that you've said in this entire thread.
I know you've bought into the Puritan ideal that hard work and effort always pays off. While sometimes true, most of us learn in early adulthood that the world isn't quite so simple. I guess that lesson hasn't sunk in with you yet.
>>1074341 >doesnt care about winning internet arguments I don't. I'd rather be rich than right. You'd have to be a moron to think otherwise.
>>1074349 I've made you mad, and you're lashing out in order to preserve the bubble of denial that you've built to mask your ignorance. You can call me names all you want, but understand that all you're doing is proving me correct.
I don't care if people like me. This is 4chan, and people don't come here to have civil conversation over tea and crumpets. Board culture is quite crass here, which suits me just fine. If you're too sensitive to take it, nancyboy, I suggest that /r/eddit may be more your speed.
>>1074353 Interesting that you call peer-reviewed scientific study "petty arguments" while you yourself make unsupported, unproven, conclusory statements to support a universally derided investment strategy.
This alone tells me everything I need to know about your critical analysis skills.
>inb4 you make another series of 3-4 serial posts instead of gathering your tiny thoughts into one coherent comment
>>1074348 So are you saying professional intraday traders dont use risk-management strategies?
I read through the studies you posted and the biggest problem I have with them, other than the fact they were recorded in Taiwan, is how they lump everyone together. The most successful intraday traders have the best risk management strategies, otherwise the leverage wouldnt account for shit. Nothing in those studies proves anything except daytrading probably isnt for anyone.
(Sorry if Im feeding the troll, guys. Thread hit bump limit anyway, so why not)
>>1074373 What do "professional intraday traders" have to do with "rebalancing"? If you're trying to make some point here, you're failing badly.
>I read through the studies you posted You're lying, or else you;d know that only two of the studies use trading data from Taiwan. Besides which, there is no reason why the market matters. Or do you somehow think day trading in Taiwan is different that day trading elsewhere? Do you have any evidence to support that critique?
>they lump everyone together. The most successful intraday traders So you think the studies are bad because they look at ALL day traders, and you think they should only look at the "successful" traders?
Lol. Thanks for that comment kid. Back into the trash you go.
>>1074375 You keep criticizing my contributions to the thread, but you can;t articulate a single thing I've done wrong other than disagree with you. And use harsh language (shame on me).
Meanwhile neither you nor any of the 3 other day trading advocates have made a single intelligent contribution.
>I'm not sure what you think you're doing see >>1074190
Please read better. I hate having to repeat myself. Your stupidity should not mean that I have to put in extra work.
>>1074413 >If you were to only look at foreign indexes, many would make American index investing look like a very bad idea. And why would anyone look "only" at foreign indexes? The core principle of indexing is market diversification.
That's like saying the best way to day trade is to buy diversified equities and hold for 20 years. It's true, but it's not day trading.
>a portfolio of randomly selected stocks can beat them A blind monkey with a dart board can beat the most experienced day trader in the history of the world. "Can" is a stupid word. Learn how statistics work, kid.
>>1074663 >Lol youre the one posting studies of foreign markets and claiming they apply in America Actually, no, I'm not. The authors of the studies make those claims. And they give the reasons why. And after many years of peer-reviewed analysis and evaluation, no reputable scholar or academic has disputed those claims.
If you had taken the time to read the studies, you would already know this and you wouldn't have wasted my time having to explain it to you like a 5 year old.
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