I went to lunch with this guy again who was saying had I bought xxx stock, I’d now have a 45% gain since last time we spoke.
I have to tell myself this to keep from envy, People brag their gains, they rarely brag their losses.
^ There’s a quote that helps me keep my sanity, though it may be arrogant.
“I run the streets the streets don’t run we Y’all run, we chill still waters run deep I repeat, sing along with me I run the streets the streets don’t run we” - Jay-Z
IMO, if I trade of purely price, I’m letting the market run me. If I trade of a value I derived and have a supportable theory, I’m running it.
^Have you seen the video of him getting attacked by beyonces sis?
^ Not yet, wonder why?
“People brag their gains, they rarely brag their losses.”
Aye. Same applies at the casino. Wonder if has a net gain or loss.
So I’m going to see this guy in action tomorrow (no homo). He’s piqued my interest and has a level 2 quote platform at his disposal. Maybe I get see his trade blotter and see what kind of gains he’s claiming.
I was actually very close to quitting my job last year to daytrade and did a lot of research on the subject, even speaking to a CPA firm that specializes in trading accounting. Basically I came to the conclusion that there are people out there making a killing daytrading, even in today’s markets, but you have to be an expert in one to two setups, trade them exclusively, and put in a lot of time and effort at night and in the morning to find the setups. You also have to have a large enough capital base to make the commissions/platform fees insignificant and trade enough size to negotiate the lowest possible commissions.
All of the successful guys I discovered that verified their profits with something like profit.ly were paying sub-penny per share commissions, which you don’t usually get with the discount brokers that advertise on TV.
I didn’t have enough capital to try, but I do think there are a small percentage of traders who can make it and the ones that do usually are making it big.
^they use TA?
This always seemed like such a hard game to me. Who knows what the stock will do on a particular day? I am short a stock at about $4.75 that signed its own death warrant with a debt offering that is structured to basically ensure bankruptcy. On the day of the announcement the stock ran up to $5.75 (WTF stock market?). Today just 2-3 months later, it sits below $3.00. Had I been day trading I probably would have gotten hosed.
I have no idea what price will do on most days but my experience is you can pretty reliably tell whether a stock is likely to be much higher or much lower over a 2-3 year period. Eventually the price will reflect the reality of the company. It can stay disconnected for an extended period of time but not forever. Of course this means you have to be a good business analyst and work your butt off to get quality insights, but that’s much easier than guessing about charts and order flows minute-by-minute.
Here are the people that make money in the stock market:
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People who hold stocks for long time periods.
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People who hold stocks for miliseconds.
The vast majority of everyone else loses. I have only encountered a couple of people who could make money “day trading.” Turns out, they all quit. Reasons cited by successful daytraders for quiting: their eyes were ruined, they were worried and couldn’t enjoy themselves after losing big money and that was not offset by happiness about gains, it literally adds nothing to society as it is just taking money off of stupider traders (at least with long term, you can make an argument for improving societal resource allocation).
^Respect. Makes me feel better about my boring asset allocation. This cat loves to trump his winnings around the break room and it makes me feel meek…good to know it is either a fluke, dumb luck, or both.
Again, people brag their winnings, they never brag about their losses.
It’s a different kind of skill.
The guys I found/corresponded with used very simple TA. It was nothing crazy. One guy would short stocks that had huge runs up in a short period of time once they looked like they were about to break (these were mostly low-priced stocks that may have appreciated several 100% in weeks). It might take a few attempts to catch the move, but once they broke they broke hard and he’d clean up. That’s all he did and the only setups he’d look for.
Bump.
I found this old thread on retail day trading. A few of you AF regulars have chimed in with opinions that range from curious to skeptical. Since becoming a proficient at intraday trader is where I am putting my efforts these day, I thought it would be fun to make myself a guinea pig. I will note my progress, lessons learned and ultimate success or demise on this thread from time to time. So, here we go…
What I have already done: From February of this year up to about June, I was immersed in the algorithmic approach. I teamed up with a programmer/ retail trader and we would come up with concepts for non-discretionary trading systems. He would write up the code and we would back test on historic data. Results were mixed and the the systems that would produce the most flattering returns were also prone to “blow ups”. I started to get more sophisticated with my back testing and attempted “walk-forward” analysis. To make a long story short, in order to create a “robust” system, you have to set the parameters so that they can best be trusted in out of sample testing. You also need to set aside enough capital for drawdowns, This often produced unflattering results (only about a 15% return on invested capital over time… some years would still be a drawdown!). Anyway, I abandoned algo trading based on my belief that an algo system makes a better investment vehicle rather than income generator.
What I am doing now: Starting in June I decided to attempt discretionary trading. That does not mean just trading on gut feel or whim. It simply means I am not blindly trading on signals as in non-discretionary systems trading. With this kind of trading, context becomes key. I binged on self education in trading techniques. It is my belief that no one can teach you to trade. You can learn concepts from others but you kinda have to write your own book on trading. You have to develop your own process. That has been the focus since June. I now have a backbone in place of a trading process that I am working with. I base my decision to take a trade on context and then use price action set ups within that context. The context is based in auction theory, which simply means I am looking at what prices are most popular and which are rejected. Price tends to be attracted to levels where they were the most popular so in this vain I can form hypotheses for where I think price will be attracted to on any given day. I use volume profile and support/resistance to structure my opinion. Once I have a set up that make sense given the context hypothesis, I then look for price action set ups where I can place my stop close (and have it be accurate, not just stop out for no reason)… but at the same time recognize long runway for where I see price being attracted to. This way I set myself up for small losses and larger profits.
I know what you are thinking… hey, you’re a stripper, you are asleep during peak market hours. You would be right! However, it is very important I paper trade my process and continue to develop it on a regular schedule. I am doing this! I trade oil, gold, and the yen form 3am to 5am every night (morning 
)
I have been trading my session for a couple weeks. I journal about my trades and how I could improve my process. I would not say I have an edge yet but not doing bad. I will define success (having an edge) as consistently having losses that are smaller than profits and losing no more that 50% of the time.
I will update my progress in a few months.
Looking forward to reading more.
I hope you don’t have 5 homes with large ARMs!! 
Keep your wits about you and let us know how it goes!!
I will say with a fair level of certainty that any return you may make will likely never fully compensate you for the risk you are taking and the ridiculous amount of hours you seem to put into reading and testing strategies. That said I find your approach to investing interesting and would like to hear a periodic updates. Then again I may just be bitter because my portfolio got completely slammed today.
Sounds interesting. Do you trade foreign markets?
@P… I trade futures (CL, GC, 6J)which are processed on the same exchange that they are in regular hours. Futures are open for trading 23 hours a day. Market goes dead (usually) until about 2:30 am when volume starts coming in tandem with European markets.
@yayywork… maybe a tad bitter Luckily for my future income security and peace of mind, as a trader (at least the way I approach it), risk is always defined!