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The brutal truth of day trading

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  • Post #1
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  • First Post: Mar 26, 2021 1:10am Mar 26, 2021 1:10am
  •  remonpilip
  • Joined Nov 2019 | Status: Member | 164 Posts
source: https://www.quora.com/Why-are-commod...ent-strategies

I am giving everyone some free invaluable knowledge here. Most people, and especially people who profess to know what they are talking about, don’t! They spout verbage but they either don’t trade or they don’t trade successfully. Big hat, no cattle I call it! I find most self proclaimed experts spout a bunch of technical jargon and this and that, but as I said, big hat, no cattle.

Now I am not selling anything so I don’t care if you read this or not. In fact, its better for me if you don’t, because if you trade, you will lose and I will win. The only way the market can exist is if half the money is lost because only half the money can be gained. This is a zero sum game. If I make a million dollars, the market requires a million dollars in losses to pay me.

First off, if you are commodity trader, you are not an investor, you are a speculator. You are speculating on the future direction of the commodity price. You take that risk in return for the possibility of making a profit. You are not investing in anything. You are not producing it for delivery or accepting it as a delivery. You are merely trying to determine the future price of a commodity. Speculators provide a valuable service because they add liquidity to the market. Liquidity is the ease of selling assets etc. into cash with little affect on the market price. Liquidity adds ease and efficiciency to the market. Its a lubricant. It helps move the physical commodity from seller to buyer.

Trend following - the markets are chaotic. They are non-linear dynamic systems. Market prices are highly random with a trend component. Within chaotic systems is the concept of a fractal, “self similar”. Just like the branches of a tree that get smaller and smaller but look like the original tree as a whole. Therefore a system can be random in the short term, but deterministic in the long term. Your lung is another example. So is the coastline view at 10,000 feet. As you slowly get closer, the coastline looks the same! Ice crystals, nautilus shells.

However, short term patterns and repetitive short term cycles with predictive value, do not exist. There is no “secret,” there is no predictive ability, its random, like a roulette wheel. That is why you cannot make any significant money in the long term from day trading. There is not enough time for these patterns or fractals to appear. You cannot see the pattern of self similar until it emerges over a longer term!

BUT!

Traders can exploit the longer-term trend component of market price action to obtain a statistical edge. This is precisely what trend-following systems do. This is why a good trend-following system in a number of commodities tend to make money year after year while day-traders invariably lose in the long term. The deterministic element in intraday data is barely measurable. It is highly unlikely short term traders can profit in the long term. That’s why I don’t do it!!!!!!!

To be a successful speculator, you have to put yourself in the same position as the house in casino gambling. On every bet, the house has a statistical edge. The house might lose in the short term, but the more gamblers bet, the more the house will eventually win.

If you trade with an approach that has a statistical edge and you follow it rigorously, like a casino, you cannot lose in the long term. It is the market’s price trend component that gives you the statistical edge. To increase your edge, some markets have a higher historical trend component. These are the ones you want to trade!

All successful systems employ some method of identifying trend.

Like all things in trading, simplicity is the best route. When I see all this complicated stuff on the internet, I think its to impress you or to sell some system. The traders I know, and know of, that are successful, do not employ overly technical complicated systems. If you employ too much technology and trading indicators you will never make a trade because some of them will even contradict each other. You will be too confused to do anything!

Most traders operate with no idea if their methodology has a statistical edge. They assume if its from a book, or came from a famous guru, a fancy website with all sorts of bells and whistles, or cost a lot of money, it must be good. They have a highly subjective system with no way to test them. Don’t be surprised if you lose your money!

There, you got 20 years of trading advice for free!

I challenge you to prove me wrong!
Let ur winners run & cut ur losses short.
  • Post #2
  • Quote
  • Mar 26, 2021 1:14am Mar 26, 2021 1:14am
  •  remonpilip
  • Joined Nov 2019 | Status: Member | 164 Posts
source: https://www.quora.com/How-realistic-...-full-time-job

Day trading reeks of impatience. In my opinion, there are several attributes to an unsuccessful trader and these are some of them; greed, desire for action, and fear of missing a profit. What do they have in common? Impatience. I think day trading appeals to people that want to make the quick score. They want to buy a system and immediately be on the road to riches. You will find this is not the case. In futures trading, patience is a virtue. You have to wait for the opportunities to present themselves. Then you make a move.
Let ur winners run & cut ur losses short.
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  • Post #3
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  • Mar 26, 2021 2:43am Mar 26, 2021 2:43am
  •  lostup
  • | Joined Mar 2021 | Status: Member | 123 Posts
i know a trader who divided his funds to 22 parts , then daily trade his 1 part of money , lost or 1000 % profit daily . and he is very successful

there is another trader on FF which is so popular and very effective trader , and he is also day trader, day trader remain tens /active for 5 days , but make huge profit than swing trader

day trader if use compounding then can make huge money with in few days , that a swing trader cannot do

day trader remain busy daily and enjoy daily market move

day trader if loss one day then can make profit next day so he should not be depressed for longer period of time
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  • Post #4
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  • Edited 9:46am Mar 26, 2021 9:01am | Edited 9:46am
  •  DojiSan
  • | Joined Apr 2006 | Status: Member | 216 Posts
What about daytraders like Ross (warrior trader)? Ross made over $4,000,000 in 2020 daytrading about 4 hours a day. Check his youtube channel. https://www.youtube.com/user/DaytradeWarrior
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  • Post #5
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  • Mar 26, 2021 11:27am Mar 26, 2021 11:27am
  •  ccrkk10
  • | Joined Aug 2020 | Status: Member | 46 Posts
What about the concept of forming a long term bias and then drilling down to interday levels to scalp and day trade in the direction of the long term trend?
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  • Post #6
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  • Mar 26, 2021 11:37am Mar 26, 2021 11:37am
  •  BlackNapkins
  • Joined Jan 2016 | Status: Member | 1,006 Posts
You made statement... you did not proof anything
BN
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  • Post #7
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  • Mar 26, 2021 12:20pm Mar 26, 2021 12:20pm
  •  robots4me
  • Joined Dec 2017 | Status: Member | 4,378 Posts
Quoting remonpilip
Disliked
There, you got 20 years of trading advice for free! I challenge you to prove me wrong!
Ignored

I am "Faster than a speeding bullet! More powerful than a locomotive! Able to leap tall buildings at a single bound!".

@remonpilip -- I challenge you to prove me wrong!!
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  • Post #8
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  • Mar 26, 2021 12:28pm Mar 26, 2021 12:28pm
  •  mysterio
  • Joined Sep 2009 | Status: Member | 6,009 Posts
Sounds like someone trying to intellectualise why they're losing money by externalising the issue instead of actually putting the effort into learning how to trade successfully - which takes a lot of hard hours of practice.

Quoting remonpilip
Disliked
However, short term patterns and repetitive short term cycles with predictive value, do not exist.
Ignored
Simply not true- I get there are academics who may have analysed statistical data on candlestick patterns or H&S patterns, or whatever, and 'proven' this statement, but price action leaves signatures every day telling you what it's about to do.
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  • Post #9
  • Quote
  • Mar 26, 2021 2:26pm Mar 26, 2021 2:26pm
  •  triphop
  • Joined Oct 2007 | Status: Member | 1,064 Posts
Quoting robots4me
Disliked
{quote} I am "Faster than a speeding bullet! More powerful than a locomotive! Able to leap tall buildings at a single bound!". @remonpilip -- I challenge you to prove me wrong!!
Ignored
I bet you can too

Well op you can have this for free too. This place is exhausting because you've three camps - those that say it can't be done, those that say nothing exists, those that'll bamboozle you with maths way above your paygrade to make you think you're probably too dumb to get it.

So to the odd outlier who's really trying to crack this, let me spell this out in all the noise. You can't trade unless you have concrete structure in place. Not a trading plan. A structure of the market. Your plan is based around the structure. Call it what you want, chin-stroke for all you like as to how and why it exists, but trading boils down to a structure, a rhythm of time across price. Without it, you're toast. But in spite of the naysayers, you do have a chance. It's within grasp.

So for those looking, take a deep breath, clear your mind and charts. The enemy of all trading 'systems' is imprecision. Focus on precision, measure everything, and the rest will fall into place.

Precise data. Precise measurements. Precise definitions.
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  • Post #10
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  • Mar 26, 2021 3:38pm Mar 26, 2021 3:38pm
  •  bluesteele
  • Joined Aug 2007 | Status: Member | 2,058 Posts | Online Now
Quoting robots4me
Disliked
{quote} I am "Faster than a speeding bullet! More powerful than a locomotive! Able to leap tall buildings at a single bound!". @remonpilip -- I challenge you to prove me wrong!!
Ignored
Just had to come out of the woodwork and say ...
I agree with you Steve
The Best Loser Wins
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  • Post #11
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  • Mar 26, 2021 3:47pm Mar 26, 2021 3:47pm
  •  skyf
  • | Joined Mar 2020 | Status: Member | 341 Posts
Quoting remonpilip
Disliked
source: https://www.quora.com/How-realistic-...-full-time-job Day trading reeks of impatience. In my opinion, there are several attributes to an unsuccessful trader and these are some of them; greed, desire for action, and fear of missing a profit. What do they have in common? Impatience. I think day trading appeals to people that want to make the quick score. They want to buy a system and immediately be on the road to riches. You will find this is not the case. In futures trading, patience is...
Ignored
This is true.
Without despair & distraught, focus on Patience to FRESH MOTiVES.
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  • Post #12
  • Quote
  • Mar 27, 2021 12:16pm Mar 27, 2021 12:16pm
  •  BlackNapkins
  • Joined Jan 2016 | Status: Member | 1,006 Posts
Quoting skyf
Disliked
{quote} This is true.
Ignored
This is only opinion...
BN
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  • Post #13
  • Quote
  • Mar 27, 2021 1:00pm Mar 27, 2021 1:00pm
  •  rockypoint
  • Joined Aug 2014 | Status: Member | 3,239 Posts
Sorry but I disagree. Yes the attributes of greed, desire for action, impatience, fear of missing a profitable trade, lack of discipline are things all types of trader might have issues with until they learn to control their emotions.

To think that day trading doesn't require patience and discipline is just wrong.

To be a successful trader you need:

1) Thorough understanding of your psyche, what kind of trading suits your personality best. Most people are suited to longer time frames. But some are not the waiting breeds impatience and loss of discipline, length of trades breeds stress. Not trading to your personality leads to bad habits and losing control of your emotions.

2) Money management

3) Understanding of price action/structure.

4) A system that requires discretion, no EA's, No Black Boxes. Some like naked charts, most like indicators of some sort. Indicators hint at answers, your analysis of PA provides confirmation.

5) Technical analysis for trading longer time frames

I can't trade longer time frames, it makes me crazy. I tried long term, swing trading and I was terrible and stressed, worried about open trades overnight. I felt a complete lack of control. With day trading I trade 2-4 hours a day and when I'm done, I'm done. This suits me to a tee.

Lumping day traders as lacking patience and discipline is wrong any successful trader need these characteristics. I have pointed many traders towards longer time frames because it was apparent they weren't psychologically suited to day trading. I've also encouraged people who just couldn't get consistent with day trading to tweak a system to slow it down a little.

Saying day trading reeks of impatience is like me saying longer term traders have trouble making decisions. Trading require a comfort level, it's up to the individual to find that level. The firs step is understanding what kind of trading suits you best
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  • Post #14
  • Quote
  • Mar 27, 2021 1:06pm Mar 27, 2021 1:06pm
  •  venividivici
  • Joined Jun 2015 | Status: Retired | 952 Posts
My luxury vehicles and homes disagree.
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  • Post #15
  • Quote
  • Mar 27, 2021 1:18pm Mar 27, 2021 1:18pm
  •  OnlineAddict
  • Joined May 2014 | Status: From $1 to Million | 8,868 Posts | Online Now
Quoting remonpilip
Disliked
That is why you cannot make any significant money in the long term from day trading. There is not enough time for these patterns or fractals to appear. You cannot see the pattern of self similar until it emerges over a longer term!
Ignored
What a load of crap! These things are written by losers for losers. People today are so narcissistic that they think everything they can't do, can't be done.
Everyone can see the chart, but only a few can actually read it.
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  • Post #16
  • Quote
  • Mar 27, 2021 1:59pm Mar 27, 2021 1:59pm
  •  rockypoint
  • Joined Aug 2014 | Status: Member | 3,239 Posts
I rarely venture into other threads, but starter post in this one I found to be very arrogant. There are so many ways to be successful trading system wise. But so few are successful, because they can't over come the psychology of trading, over trading, indecision, skipping from one system to the next and of course to 2 biggies fear and greed.

I don't understand how anyone can trade longer time frames. All my success has come from trading 1-5 min candles and range bars.
But I don't classify long term traders as wrong.
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  • Post #17
  • Quote
  • Mar 27, 2021 2:04pm Mar 27, 2021 2:04pm
  •  rockypoint
  • Joined Aug 2014 | Status: Member | 3,239 Posts
Venividivici, like the way you trade
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  • Post #18
  • Quote
  • Mar 27, 2021 2:08pm Mar 27, 2021 2:08pm
  •  rockypoint
  • Joined Aug 2014 | Status: Member | 3,239 Posts
Onlineaddict, See you have some interest in EA's. I've never been comfortable with them, because they seem to lack the ability to use discretion. Am I wrong? As I said just because I feel that way doesn't me right.
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  • Post #19
  • Quote
  • Mar 27, 2021 3:24pm Mar 27, 2021 3:24pm
  •  OnlineAddict
  • Joined May 2014 | Status: From $1 to Million | 8,868 Posts | Online Now
Quoting rockypoint
Disliked
Onlineaddict, See you have some interest in EA's. I've never been comfortable with them, because they seem to lack the ability to use discretion. Am I wrong? As I said just because I feel that way doesn't me right.
Ignored
I don't use any EAs as robots...I wouldn't trust any automated software with trading decisions.
Everyone can see the chart, but only a few can actually read it.
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  • Post #20
  • Quote
  • Mar 27, 2021 3:41pm Mar 27, 2021 3:41pm
  •  ryuryu
  • Joined Apr 2020 | Status: Member | 1,871 Posts
Quoting rockypoint
Disliked
To be a successful trader you need: 1) Thorough understanding of your psyche, what kind of trading suits your personality best. Most people are suited to longer time frames. But some are not the waiting breeds impatience and loss of discipline, length of trades breeds stress. Not trading to your personality leads to bad habits and losing control of your emotions. 2) Money management 3) Understanding of price action/structure. 4) A system that requires discretion, no EA's, No Black Boxes. Some like naked charts, most like indicators of some sort....
Ignored
If you trade with EA, then
1. You don't need to understand of your psyche
2. MM already built-in
3. PA, TA, structure etc are already here
4.
5. You can execute 1m or less.

I'm just curious how in 2021 people still believe in manual trading.
Observer effect
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