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The brutal truth of day trading

Experience that is not blemished by opinion. Observation that has points of reference repeating over and over again. If you're not really a trader or value investor, then you won't appreciate the symmetry. Not everyone has crippled themselves with mere opinion. Sorry.


Peter
Trading is strangely simple when you just stop & think about it.
Quoting PeterCaleb
Experience that is not blemished by opinion. Observation that has points of reference repeating over and over again. If you're not really a trader or value investor, then you won't appreciate the symmetry. Not everyone has crippled themselves with mere opinion. Sorry. Peter
And yet, opinion is all you have ever given. Funny that.
Fight of the Century: Keynes vs Hayek, Round 2
A PLUMBER who is truthfully and consistently succeeding at their PLUMBING is the person who knows and understands what they're dealing with and knows and understands HOW to deal with what they're dealing with. Everyone else is just guessing and hoping and following someone else who is just as lost or confused. Call this opinion if you want but it is present in the underbelly of every person that gets involved in the PLUMBING BUSINESS, whether you're talking about a private PLUMBER or a person in an organisation. Forget style because that's all rubbish....

just teasing

call me crazy, but for me, if you re consistently paying your bread and room with trading, your a trader, and as a plumber, you "knows and understands HOW to deal with what you're dealing with", as Peter so elegantly put it.

If you dont know, you dont grow. If you don t grow, you don t know ?

thanks for the laughs guys! apologies for my craziness...
Quoting jmn5611
{quote} And yet, opinion is all you have ever given. Funny that.



Sorry to say this, boy, there is a world of difference between an opinion and observable common sense.

Only fools see opinion everywhere. Just because this is a forum thread, has nothing to do with the quality of something.


Peter
Trading is strangely simple when you just stop & think about it.
Quoting jmn5611
Regarding automated trading....LTCM. They ran algos, then a black swan got them and there was no algo to get them out of it. It is impossible to account for every variable, therefore, this can and will eventually kill every EA. The question comes up as to whether or not a human, can "sense" something wrong, like when correlations begin to break down. This happened in 2000 and again in 2008. @Rick M., I think this is the wall you hit. Speculation of course. @ryugu, can your EA's respond to a black swan and initiate a portfolio stop?
Whatever works, right ?

Interesting... But trust me, just as many humans get blown away by black swans....

And Ea s can adapt to the price action just as humans do. I see it almost every day, Ive seen it done over and over again. I have many myself, optimized every quarter. I still mostly manually trade because Ive been doing so for a long time, but I don t need to when I am too tired anymore... and my eyes are getting old, and ea s have saved the day many times.

You wont find any here, so there is a lot of talk about ea s failing. Truth is, ea s really do have, in the professional sphere, great, consistent success.

But an Ea is not meant to be alone all the time... an ea alone is like a computer alone. You wont get far ! You gotta put in some grease from time to time ! Take out a part, add one.....

No I wont gather any proof for you sceptics. Dont waste you time. Just manual trade like me. As long as it works, right ?
Day trading is just like anything else - either you try and learn something BUT you go kicking-n-screaming while doing it and then spend YEARS going in circles OR .....

Just shut your mouth, open your eyes and observe. And KEEP observing until it makes sense to YOU. It may require hours or days or weeks or months but eventually your mind will be imprinted enough that you can THEN open your mouth and ask a question.

Just because you have an itch to be rich, DOES NOT mean you can scratch it now and suddenly be rich.

Work first then play.


Peter
Trading is strangely simple when you just stop & think about it.
Quoting PeterCaleb
... Work HARDDDDD first then play. Peter
had to add " work hard, ooooo really hard "

hope you dont mind Passionate Peter, and hope you dont mine me calling you that, for I find you delightfully passionate and I like that very very much.
Quoting rockypoint
Actually it would depend on what's considered significant. Many would think being a good husband or father as being significant, many might not. Success comes in many forms. I do think as far longer term versus day trading you have 2 main personality types. Longer term traders are more rules oriented, like to take their time coming to a decision, more likely to play well with others. This makes them more suited to the longer term trading. Day traders the good ones I know tend to keep things very simple, like to make decisions on the quick side and...
I think being a good father and husband is significant, but not in context to trading the forex. The thread is directed at the brutal truth, not sugar-coated truth, about day trading the forex. And I agree with you that success comes in many forms, in life, as well as in forex trading. But I have been reading posts of FF for many years, and in all honesty, I have no idea what other retail traders are trading or thinking. I do know how bankers trade, I know what the forex is doing every day and I know how this market "works". And I know exactly how I trade. But from what I've read on FF, very, very few people have demonstrated an understanding about what they are trading, let alone how to trade it. Good trading to you, rockypoint, and best wishes!
  • Post #189
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  • Edited at 1:17am Apr 8, 2021 12:59am | Edited at 1:17am
The "brutal truth of day trading" is not a thread whereby I stark the more inferior style of trading.

It is just to expose my due diligence -because little does it- on how rare profitable day traders there are.

The widely acceptable day trading fail rate according to "statistics" -that is, statistics without any experiments let alone long hours of research- are said to be 95%
some were even more generous: 90%

And after I did some research -of other people's hard work & time- turns out there are only 0.4% day traders that are making a killing -more than a bank teller's annual salary- that leaves the fail rate of day traders to be 99.5%


The point of this thread is to give access to easy due diligence for those who are ignorant.

I am not saying that I'm free from the flaw of human nature, I have been trading for quite some time and just made my due diligence now. Can you imagine?

While IMHO, I should've made it long ago, when I was still pure to this particular business.

Due Diligence in the light of proven statistical figures & your own due diligence and not from some young chap flashing his borrowed sporty car convincing to make you rich by midnight if only you just buy one of his: "one time limited offer" on how to get rich quick and quit your 9-to-5 job by Monday morning; sounds familiar?


I admit, my first post was utterly subjective and that is exactly what I need to drive the traffic.

I am not advising people to switch into investing or long term trading, but you need to have an edge in this business, long term or short term.

And when I say edge I do not mean some "edge" you read off the internet and thinking that you have a "statistically" proven method, let alone an edge.
by edge I mean: an unbiased information that only you are accustomed to that others do not have even he slightest hint.


Warren Buffet has the privilege of making a deal hand-to-hand with his preferred company.
Jim Simons has the privilege of working with PhD students to decode the "anomalies" of the market and in turn, made a very consistently profitable hedge fund.


What privilege do you have?
What is your statistical proven edge?
Let ur winners run & cut ur losses short.
Quoting remonpilip
The "brutal truth of day trading" is not a thread whereby I stark the more inferior style of trading. It is just to expose my due diligence -because little does it- on how rare profitable day traders there are. The widely acceptable day trading fail rate according to "statistics" -that is, statistics without any experiments let alone long hours of research- are said to be 95% some were even more generous: 90% And after I did some research -of other people's hard work & time- turns out there are only 0.4% day traders that are making a killing -more...
Hi Remonphilip,

Again my question regarding your 0.4% 'success rate', is 'success' in your perspective is "A brazillian trader able to make >USD$2100 / year". So to put the same standard in where I am (Hong Kong), I need to make about $10000 in a year. Essentially I need to be putting in 6-figure capital (about 1-2 years of typical full-time salary in Hong Kong) and make 10% (better than market). This threshold is high even for full-time institutional traders.
In the same study, 50% of traders earn >$0.1, so ~50% lose money.

If we factor in the whole trading population, there are people who do day trading, swing trading, mid- to long-term investment. If they trade the forex market, then likely they use CFD accounts regardless of styles.

In this article (Link here), actual number tells that 70-80% CFD accounts were unprofitable and lost money. Given in your study that 50% day traders lose money, does it mean the proportion of swing traders and mid- to long-term investors losing money is bigger (e.g. 90%) so that the overall "fail rate" is 70-80%?

Be very careful not to fall in to oversimplification when dealing with numbers and statistics.
1) The "Success" you are looking at is way to high especially for retail traders. And sadly the study did not factor in the capital and average income of the subjects.
2) You need a solid statistical analysis on all sides to draw a conclusion and set thresholds (think about the general goal of trading/investing, what are the people trying to beat? the market or...?)
3) I believe existence, discovery and application of "edge" is independent of trading styles.

But yes, your numbers do warn those who want to get rick quick, which is a good thing
problem is... you base it all on statistics that throw all individuals, gamblers, students, etc. in the same basket as "traders". In my experience, 100% of daytraders make a living, 100%. The rest are all sorts of individuals, victims of gambling addiction, of holy grail and fake broker schemes, and more atrocities, yes atrocities. Lives are broken.

But you make a mistake when lumping them all with traders, and an even stranger mistake in using it to conclude that the market and day trading is in any way similar to what you have strangely concluded and expressed : "

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!

"
long term day traders making consistent returns years after years is not a myth, I can assure you of that... And if anything you state above would be true, I and many others would not be living off it. Do a little research on day traders, you ll see, we have existed and prospered and will continue to do so as long as a market is there to be traded.

Good luck
Quoting PeterCaleb
{quote} Sorry to say this, boy, there is a world of difference between an opinion and observable common sense. Only fools see opinion everywhere. Just because this is a forum thread, has nothing to do with the quality of something. Peter
And still, while you may have changed semantics, where is your observable common sense? It is not there, because you do not have any.

Quoting remonpilip
What privilege do you have? What is your statistical proven edge?
I have the privilege of being small. A speedboat amongst oil tankers.

My statistical edge is zero, like everyone else's. If I place a trade, it has a one in two chance of success. Anyone who tells you differently is either deluded, predatory, or both.
Fight of the Century: Keynes vs Hayek, Round 2
Quoting jmn5611
{quote} And still, while you may have changed semantics, where is your observable common sense? It is not there, because you do not have any. {quote} I have the privilege of being small. A speedboat amongst oil tankers. My statistical edge is zero, like everyone else's. If I place a trade, it has a one in two chance of success. Anyone who tells you differently is either deluded, predatory, or both.


This from someone who suggests to people to 'just trend trade' the markets. As usual just a silly lopsided view of things.

Peter
Trading is strangely simple when you just stop & think about it.
Quoting PeterCaleb
{quote} This from someone who suggests to people to 'just trend trade' the markets. As usual just a silly lopsided view of things. Peter

Of course, it is a bit more complex than "just trending the trade", but I am sure he knew that.

Not a lot of people giving the benefit of the doubt these days! Might as well laugh at it, reminds me of philosophical drunk teenagers certain to detain the truth and arguing about two different things the whole time.

But be careful, I know more than one trader that works only with trend strategies. I myself started out with a trend strategy that still performs rather well to this day, but went to diversify with range and countertrend strats and stayed in currencies while they diversified in other ways, beyond forex....
Quoting jmn5611
Regarding automated trading....LTCM. They ran algos, then a black swan got them and there was no algo to get them out of it. It is impossible to account for every variable, therefore, this can and will eventually kill every EA. The question comes up as to whether or not a human, can "sense" something wrong, like when correlations begin to break down. This happened in 2000 and again in 2008. @Rick M., I think this is the wall you hit. Speculation of course. @ryugu, can your EA's respond to a black swan and initiate a portfolio stop?
My question was not about my EA. It was about why "you have to use strict rules in trading" is the key to success, but by the other hand "no automated trading"? I found this strange. As I see many believe that human can "sense" the black swan, but robot can't. Ok, I understand the answer.

Anyway I never said that EAs are better or manual trading is not good. For me EA is better because I'm lazy, not so fast to execute trades manually. I always miss good entries and then stuck in bad trades trying to "one more trade and that's all". But this is my personal issue and I don't think it is very interesting for the masses.
greed and fear
I think this discussion shows the brutal truth of FF - Long time FF members, not necessary profitable traders, dominating the forum (likely also content management).
Admins should treat this problem seriously as this turns the vibe of the site to the worse side of it, and objectively here is losing popularity in the last couple years.

We agree to disagree here. There is no right or wrong to trade, and unfortunately all of us including me are not correct in talking statistics because of lack of information. Opinion is all I can share and thankfully the OP has suggested some academic studies with numbers and findings that we can discuss on objectively. In the end we can still hold our beliefs but understanding more about the other sides.

But we see quite some respectable long time members "disproving" others' ideas and thoughts because they are "more correct", able to "publicly judge" someone as good or bad traders or even a person, merely on the styles or a couple charts. Imagine if they could carry over such insight, accuracy and precision to trading, they probably are billionaires.
We can't tell right or wrong, good or bad, probably only truth or lies are something we can spot.
Quoting DojiSan
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
But he's a salesman, he makes his money selling his courses to newbies, not daytrading!! Selling daytrading courses is a huge business, selling the dream of earning millions from just a few hours a day
So what's being said, is day trading is genrally not worth the trouble.


Full disclosure, I'm currently in a day trade. Close to getting stopped out too.
Get the Lag out
Quoting tommydoginti
I think this discussion shows the brutal truth of FF - Long time FF members, not necessary profitable traders, dominating the forum (likely also content management). Admins should treat this problem seriously as this turns the vibe of the site to the worse side of it, and objectively here is losing popularity in the last couple years. We agree to disagree here. There is no right or wrong to trade, and unfortunately all of us including me are not correct in talking statistics because of lack of information. Opinion is all I can share and thankfully...
Therefore Trade Explorers for MT4 and MyFxBook for all trading platforms exists. FF ratings (diamond badges) should be based on trading results. Or should be added some additional badge/icon indicating real trading results score. But FF do not provide MT5 or other platform integrations - so they do not invest in improvements. Maybe they scare that true results will show something ugly... for now it is easy to "sell the dream". A lot of "gurus" with red diamonds and 200+ followers.

Or you can go to naga or etoro social trading platforms where ratings based on real results. Seems FF is specially intended for people to socialize without results. Therefore do not expect here to find some real "hero" to follow easily.

Why people are here in FF? Maybe some dreams to make "from zero to hero"... gain a lot of followers. Get investors. Sell courses. If you manage to get "from zero to hero" here in FF then you would benefit a lot... because folks here actively seek "gurus" to follow who will take responsibility and say "trade this way and will be rich". If somebody would have outstanding at least 3-5 years consistent results.. that could be converted to an e-book or courses or monetized somehow for example you could impact some stock prices like it was in Reddit forums if have X thousands dedicated followers.

It is nothing bad that 99% lose money. That's a good opportunity for heros to raise here.
Quoting PeterCaleb
Day trading is just like anything else - either you try and learn something BUT you go kicking-n-screaming while doing it and then spend YEARS going in circles OR ..... Just shut your mouth, open your eyes and observe. And KEEP observing until it makes sense to YOU. It may require hours or days or weeks or months but eventually your mind will be imprinted enough that you can THEN open your mouth and ask a question. Just because you have an itch to be rich, DOES NOT mean you can scratch it now and suddenly be rich. Work first then play. Peter
Yeah, as one of the top traders in the world, I have a few people now at my work that want to learn from me, because I was able to trade $500 last year into over $30k of profit with a 90% win rate.

But they try to act like they can do it too with just me showing them how I trade, when there are skills and intangible qualities that are inherent to me that cannot be taught.

I have been profitable for around 6-7 years now. But I am happy to help anyone who wants to learn and put in the work.
Love to talk on Discord: DividendGamer#1324
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