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The brutal truth of day trading

  • #941
  • Edited 2:40pm May 23, 2021 1:58pm | Edited 2:40pm
This thread was meant to discuss the negative aspects of day trading. Brutal part was to show that it is hard to make it as a day trader. Yet this thread has become a place to discuss philosophy of trading. I wonder what the thread starter had planned for the thread. Except for a couple of people no one is talking about day trading. People who do not want to think about the topic of this thread should go and start a new thread.
A trade should be based on an assumption based on facts
  • #942
  • May 23, 2021 4:36pm May 23, 2021 4:36pm
Quoting TraderTim125
{quote} It doesn't matter what you try to do in life there always seems to be someone there saying sternly that you can't or it wont work, or you are stupid for even trying. I am so glad that I learnt many years ago to simply ignore griefers and just get on with it. C'est la vie'
It is good to inform someone you ignore that you ignore him. Good ignoring skill.

I see you sell training courses... All clear. Keep ignoring me.
  • #943
  • May 23, 2021 4:41pm May 23, 2021 4:41pm
Quoting joyny
{quote}
"Of his 200 employees, ensconced in a fortress-like building in unfashionable Long Island, New York, a third have PhDs, not in finance, but in fields like computer science, physics, mathematics and statistics. Renaissance has been called “the best physics and mathematics department in the world” and, according to Weatherall, "avoids hiring anyone with even the slightest whiff of Wall Street bona fides". — Sarfraz Manzoor, The Telegraph, 2013 For quantitative data analyst it is not required knowledge about manual...

Hi J,

I have listened to a few of Jim's video interviews, years ago. An interesting & brilliant maths minded man.

So I have followed the 'progress' of Ren.


It has not all been a bed of roses.

Well it has been for the private employee owned company. Which is not a public listed entity bound by scrutiny though, just their reports.

Then they decided to open up a public access enrollment to a separate side of the Ren business which then was open to public scrutiny.

And things have not been so rosy for the public quant based investments there.


So I wondered to myself if they kept the gold plated quant investement strategies just for the in house folks. And then offered another version of their quant based strategy investment activity to the moms & dads. And why exactly would they do that. I honestly don't know the answer.

Then I pondered how one quant based strategy worked fine, yet another did not work fine at all.

If, quant based investment strategies are the 'way to go', is it the data input/export or data boundaries, that becomes the difference. In which case are we right back to human or manual input that is the difference or variance between success or failure - and not the concept of quant strategies being the best or only way to go for profitable investing or trading.

Or maybe this article I recently stumbled upon is not totally accurate.


https://www.institutionalinvestor.co...tsiders-Tanked


"Renaissance Technologies’ famed Medallion fund, available only to current and former partners, had one of its best years ever, surging 76 percent, according to one of its investors.
But it was a different story for outsiders who are only able to invest in other RenTec funds — two of which had their worst years ever."
  • #944
  • May 23, 2021 4:51pm May 23, 2021 4:51pm
It was highly unlikely that most short term trader will make money however i dont think there is none at all. There is a saying about wall street that probably all of you have ever heard that says : "Bulls make money, Bears make money, But pigs get slaughter". At the end only ignorant traders get slaughtered.

I myself prefer to do swing trade that depends on my preferable timeframe but i rarely think most trader even advance into this stage. I agreed that simplicity is a key but what looks simple doesnt seems easy until it was done.

But overall i loved the thread and this advice was mostly overlooked however one must also have high discipline and confidence in your own trading style to execute a perfect trade
  • #945
  • May 23, 2021 7:21pm May 23, 2021 7:21pm
One brutal truth of day trading is that one trade can make your day or put you in a tilt to take trades which you wouldn't take if you are thinking normally.
Another brutal truth is that the physiology of a person can change while day trading. But this fact maybe used as an advantage if one knows about body language. By changing your posture/sitting position you can change the way you feel.
Another one is, while trying for intraday swing trade one will see their profits decline and then rise. This can be emotionally draining.

For people like me, who like to be in a trade always, it becomes difficult to take profits when there is an opportunity because this window of opportunity is present for maybe a minute.
When you are in a bad trade then one minute can seem to be a long time
A trade should be based on an assumption based on facts
  • #946
  • May 23, 2021 8:34pm May 23, 2021 8:34pm
Quoting TraderTim125
{quote} An Interesting Read I skimmed through your two pdf documents Objective Thinking Part 1 (321pages) and Objective Thinking part 2 (83 pages). I found some of your ideas and discussions quite interesting. If I may put the central theme of what you appear to be saying into my own words it would be something like this. Unless you think about what you are doing and why you are doing it, either in the context of trading or life in general, then you are almost certain to finish up following predetermined conventional paths. With trading, this spells...


TraaderTim,

It's a very common thing for this to happen re: this lady you speak of here. What I will say is this - summing up or trying to sum this up would and will create more problems. Although a person's "intellectual" mind reads the words and comprehends the language and sentences, the principles are lost in translation. Why? Specific aspects of what is in those pdf's is not about information. No 'guruism' here because that approach is useless here. What can be said is this - A learning path requires active participation and although you do make mention of this re: the lady's story, I'm sure her perspective to all of it would come across a little differently, regardless of who thinks they're more right or in fact "is" right.

The true mistake is trying to intellectualize something that requires all of a person so as to learn and truly understand. Those pdf's are not for easy reading or a chance to merely glean secrets/strategic insight etc.

And so although people think I'm "out of control" and cannot aptly put together sentences and dialogue, it's simply the opposite. I have seen what the status quo does to people. So it is reasonable to conclude that the "normal" way of everything happening on this site simply does not work.

And so yes. I challenge what people assume to be normal and expected and "nice".

Speculators are always trying to find their tail but someone who just watches and gauges all aspects, will learn and they will prosper.

There is this "garbage level" of thinking and then there is a level where you stop making excuses and blaming others and cease and desist with base level thinking and realize a simple truth - NO ONE is coming to save you from yourself in this trading realm. PERIOD.

So, TraderTim, I do thank you for your response. Let's now see what people learn.


Peter
Real Trading is not gambling.
  • #947
  • May 23, 2021 8:43pm May 23, 2021 8:43pm
Quoting simnz
{quote} I have plenty of time on my hand. So for last 5 years I have taken up a few hundred EAs for a re-engineering toss. My conclusion is: nothing can beat Pip Height and Bar width to draw tradable scenarios for you. It is as simple as that. I will provide mql of an EA which is based on random trading. It will accept random trades and supply direction bias based on first bid ticks if I chose not to give a clear bias. If given, random trades will pick ticks related to that bias. I have tried trading linked to hot hours and it has worked fine. I...
Response to developing a trading EA
Hi Simnz,
My conclusion is: nothing can beat Pip Height and Bar width to draw tradable scenarios for you etc
I am sorry but I don't understand what you mean.

I will provide mql of an EA which is based on random trading
In order to program something it is first necessary to know what it is you want to do and be able to express that in terms that both you and the programmer can readily understand. Once that is achieved, the next step is to work out the best way of going about doing it. In my experience, if this very important first step is not carried out properly it almost always leads to wasted time, disappointment and possible failure. Depending on the circumstances, looking at someone else’s code may not be much help.

Can you code an EA that can sense range trading etc
Yes I can. What I am not good at is mind reading, so I have to first have a written specification that makes sense. Pictures and drawings can also often be very helpful.

I have made 80% of my money from sideways trading
A range trading strategy is OK with me as long as it uses sensible risk management. I am not comfortable with systems that use or depend on small TP's and very large SL's. To my mind they are just a recipe for eventual disaster.

No need to have a group
No there is no need but if anyone else is interested it might be useful. Professional programmers often work in small collaborative teams where they can bounce ideas off each other.

No need to keep secrets. Only if you promise to post your mql on FF I will be interested
That is what I said. Everything, including the source code of any EA gets posted on this forum.

Copying ideas or stealing mqls and trying to sell is a failed enterprise
Agreed. I am not interested in trying to protect or own intellectual property created on or out of this forum.

Only a competent trader can make use of it.
I agree. There are a lot of myths about trading with EA’s/robots. The idea of the push button, set and forget money making machine that anyone can use is one of them.

I don't want to sound impertinent but from your written communication, I get the impression that English may not be your first language. If I am correct this could present some problems. In my experience, good communication is essential to a good outcome when developing software. This is where another person or two might be useful.

Regards
Tim
Don't Guess Test
  • #948
  • May 23, 2021 9:00pm May 23, 2021 9:00pm
Quoting GEfx
{quote} Lol...Okay, you can bring your knife, your gun, and that keen mind of yours to the challenge, which remains on the table. I do not suffer from a victim mentality. My feelings have never been hurt by you. So let's put aside all this bravado, and focus on the challenge. Less talk, tough guy, and more action.


Exactly what challenge?

Pinky wrestle?

Arm wrestle?

"Trade Off"? - whatever that is.

What I have found with most people is this - all one needs to do is talk about one thing, just one thing and see what transpires. Either they'll go do their own independent research or, they'll run their mouth off and prove a great deal more each time.

So dear child, no ego here, no bravado. I used to hunt wild boar and those tools ARE what I used, as well a trusty pair of dogs and a good friend.

So it just goes to show that a "60+yr old" can be just as mentally and emotionally impotent as a young pubescent teenager who both share the same silly shortsighted attitude.

I may not have written a "white paper" to impress my peers but I have been trading long enough to know you well enough.

I have already proved you trade like most intellectuals trade - point to point.

You're too worried about the belief "we're all the same" to realize we're not. And not EVERYONE HERE is stupid enough to stop asking Q's when they get to the line - Central banks and Tiered banks and Liquidity providers and Federal Reserve etc etc.

It doesn't provide shock and awe for me deary. Keep that for your friends.

So there you have it.

I'm sorry but since you keep harping on this challenge idea. you are showing that you cannot learn and will not help others.

Have Fun.


Peter
Real Trading is not gambling.
  • #949
  • May 23, 2021 9:22pm May 23, 2021 9:22pm
Quoting maverick2017
One brutal truth of day trading is that one trade can make your day or put you in a tilt to take trades which you wouldn't take if you are thinking normally. Another brutal truth is that the physiology of a person can change while day trading. But this fact maybe used as an advantage if one knows about body language. By changing your posture/sitting position you can change the way you feel. Another one is, while trying for intraday swing trade one will see their profits decline and then rise. This can be emotionally draining. For people like me,...
Hi Maverick

I couldn’t agree with you more about that one trade that shapes your emotion for the day.
Whether it’s a stubborn trade in DD that refuses to go into profit or a very sweet nice swing trade that provides half your daily profit, the fact remains there is always one trade that shaped your days emotions.

I would go as far as saying if I have that one great high profit trade (for me a long time is 30 minutes) early on in the trading day, I have to tighten my trade expectations or risk being over confident and being stung by a bad trade setup I shouldn’t have taken.

On the other side, I actually trade better when I am forced to find recovery trades to make up for a earlier bad trade. I normally feel that trading under pressure enables me to feel the market better and see it with better Clarity and hence find good winners.

My point is we need to use emotion from one major trade to benefit our days trading, not let it weight us down.

Cheers
Trading thin liquidity at the boundary of the charts
  • #950
  • May 23, 2021 9:44pm May 23, 2021 9:44pm
Hi Rick,

Quote
My point is we need to use emotion from one major trade to benefit our days trading, not let it weight us down.
This is the first time when I have read a post on this forum which says that emotions can actually help you. I will remember this because it is too important to ignore this.

Quote
I actually trade better when I am forced to find recovery trades to make up for a earlier bad trade. I normally feel that trading under pressure enables me to feel the market better and see it with better Clarity and hence find good winners.
This should make you a great trader! Everyone has an emotion/state of mind when they perform the best. It is pressure for you and anger for me (don't know how to change this but it works for me). But this pressure should not turn into stress. How do you stay calm after a losing trade?

Thanks for your time
A trade should be based on an assumption based on facts
  • #951
  • May 23, 2021 10:08pm May 23, 2021 10:08pm
Thread has devolved into philosophical debate of trading with nothing to do with day trading. All seem intent on scoring intellectual points.
Essentially saying we all can't be right so you must be wrong.
  • #952
  • May 23, 2021 10:15pm May 23, 2021 10:15pm
Quoting rockypoint
Thread has devolved into philosophical debate of trading with nothing to do with day trading. All seem intent on scoring intellectual points. Essentially saying we all can't be right so you must be wrong.
Hi rocky,
Yes. It should be about day trading not day trader.

Thanks for your time
A trade should be based on an assumption based on facts
  • #953
  • May 23, 2021 11:17pm May 23, 2021 11:17pm
Quoting TraderTim125
{quote} Response to developing a trading EA Hi Simnz, My conclusion is: nothing can beat Pip Height and Bar width to draw tradable scenarios for you etc I am sorry but I don't understand what you mean. I will provide mql of an EA which is based on random trading In order to program something it is first necessary to know what it is you want to do and be able to express that in terms that both you and the programmer can readily understand. Once that is achieved, the next step is to work out the best way of going about doing it. In my experience,...
I was testing your comprension abilities . Looks like we are poles apart. Good luck.
Practice makes a person perfect
  • #954
  • May 24, 2021 12:41am May 24, 2021 12:41am
Quoting TimeTells
{quote} Hi J, I have listened to a few of Jim's video interviews, years ago. An interesting & brilliant maths minded man. So I have followed the 'progress' of Ren. It has not all been a bed of roses. Well it has been for the private employee owned company. Which is not a public listed entity bound by scrutiny though, just their reports. Then they decided to open up a public access enrollment to a separate side of the Ren business which then was open to public scrutiny. And things have not been so rosy for the public quant based investments there....
Thank you TimeTells for answer. Good questions you asking.

What I see from article:
1. Medallion fund and other RenTec funds operate the same software but different parameters
2. Medallion recalculated more frequently so they was ready to adapt to covid stocks crash and then rally
3. Other RenTec funds recalculate models every 6 months. For them this was disaster because when stocks went down they used previous "stocks up" patterns. Then they recalculated with "stocks down" patterns but in markets printed money made stocks surge abnormaly. They again traded with outdated data.

Here we learn that models must be recalculated at least every 3 months. Or even split capital and work then with several packages of parameters recalculated 1, 2, 3, 4, 5 and 6 months to diversify. They use thousands of software instances/parameters sets. All must be recalculated. That requires time and servers resources.

But then question how long in the past you need to look for data? It seems to me they use 1D opening/close prices only. If they rely on 100 years old data for stocks...This might be an issue too.

But they give false claims that no previous pandemic data... We had Spanish flue pandemic in 1918... But ok not sure there was done money printing as it is now.

Main reason could be greed. As always. Public money is greedy. They demand fast results. Not quality. And Simon retired.... He pushed on quality. Now those times might be over. Think we can't anymore view RenTeh as standard... Public money and greed doing bad impact on decisions.

Very interesting info you pointed out. Will think more about that.
  • #955
  • May 24, 2021 1:46am May 24, 2021 1:46am
Quoting joyny
{quote}
For them this was disaster because when stocks went down they used previous "stocks up" patterns. Then they recalculated with "stocks down" patterns but in markets printed money made stocks surge abnormaly. They again traded with outdated data. Here we learn that models must be recalculated at least every 3 months. Or even split capital and work then with several packages of parameters recalculated 1, 2, 3, 4, 5 and 6 months to diversify. They use thousands of software instances/parameters sets. All must be recalculated. That requires time...

Hi J,

Thank you for your detailed response.

When I think about Ren I still have to believe that the quants would have done exactly what they do best. Massage data with developed formulae that has been thoroughly peer tested amongst themselves.


Recalibration each quarter? Possibly. Data issues, maybe.


Though the situation might also appear though to be a classic ‘black swan’ event. Yet it only affected the public fund and not the in-house partner-owned fund which the public cannot invest in.

That is the area that had me scratching my head and has me wondering what Taleb would be thinking or saying about it all.


I have to lean, I reckon, towards the fund manager (who was managing BOTH the private & public) as the main cause for any operational concern.

At some point they must have seen a ‘flag’ regarding drawdown (which went out to around 37% of equity).

At some point they had to say to themselves “why are we in such dd”.

And their answer to each other might have been the pandemic (their own suggestion if I read correctly).


So I reckon they surely, with a modicum of risk management (that any reasonable sole trader here in forex might employ) should have said to each other “hey, let’s put the brakes on now and cut our losses”.

While then examining and discussing whether the reasons they believed (ie the pandemic) would continue unabated, which of course they did based on countrywide political decisions around the globe.


I don’t think we can point a finger at the quants. Unless they were asked to code in a set stage "fail-safe" exit (SL) at a certain DD. But then just forgot to do so.


It smells of classic hubris, maybe, by a management team that could NOT forsee ANY possible way to fail, and that their trade portfolio would just come back into breakeven or profit at some point (rookie mistake).

In an interview I watched with Jim I do remember him saying something I thought at the time to be quite amazing.

He said that with his 100’s of Phd’s, physicists etc and the largest & fastest computer banks available to crunch their numbers - that they achieved the figure of only a fifty-one percent overall success rate (yep, 51%, that’s what Jim said, as I remember).

Of course I nearly fell out of my chair at that point. Until he added that they then achieved that 51% success rate … at ONE HUNDRED percent of the time.

And if that being so, it was just a licence to print money.

It only mattered how many billions of dollars they could get set for, on the exchanges or through their brokers.


That 100% result, of a 51% success (trade portfolio) rate was based on their long term data as you pointed out.

Though it appears they did not factor in, even 0.001% chance of any black swan event.

Which appears to be the weakness in that fund (but not of course those in the elite private group which enjoyed a self reported 76% growth in equity).


So to any investor, trader or gambler (and don’t start me on the similarities lol), all I can say is …

… Do your own DUE DILIGENCE on anything (and everything) that is ever ‘market’ based.
  • #956
  • May 24, 2021 2:10am May 24, 2021 2:10am
Quoting maverick2017
{quote} Hi rocky, Yes. It should be about day trading not day trader. Thanks for your time
Some people (including me) advocate here automated trading. Majority manual trading. But no matter automated/manual it is still day trading.

I have a bunch of running EAs and some are scalping and some day trading and some swing.

The core question of this thread in post Nr 1 is this:

Quoting remonpilip
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!
We speak here about the statistical edge. Automated traders advocate that EAs provide that info - they know probabilities and get that info with EAs very fast and at a low cost. Manual traders can get it via experience, via several years forward tests, or manually walk charts and write down in Excels data for statistics.

Then there are some traders who trade automated + manual. Think that could be the answer.

The most value in this thread so far I get from RickM, GEfx, and TimeTells.

But valuable pieces of info can be found in various other comments as well here. Even in some Peter comments.

"Calm waters don't make good sailors" - so it is ok to embrace conflicts and arguing here.
  • #957
  • May 24, 2021 4:46am May 24, 2021 4:46am
Quoting maverick2017
{quote} When I used to trade forex then we had 4 digits after decimal. Now that has changed I guess. 10 pips if there are 4 digits after decimal is different than 10 pips if there are 5 digits after decimal. {quote} ^^ taken from investopedia.
What is a Pip in Forex? - BabyPips.com
  • #958
  • May 24, 2021 5:58am May 24, 2021 5:58am
Quoting maverick2017
{quote} Hey HBN08, {quote} You are growing at a good rate. Do you use 1H & 4H for intraday trades? I'm trading full time and realized that profit will come in multiple trades and not a single big trade. Like , scalp, scalp, scalp, swing. Please do not call me sir, I'm anything but sir. Thanks for your time
overall i start to know where the ordeflow atm
Mark M and W high and low , D is where i find targets 4H and 1H to adjust technical analysis and look for paterns...run on liq..gap..
After that if i dont have a good entry i try to go to 15m but im trying to be more patiente and not go to those Tf tho...then i try to ride a part of the weekly
Ofc im still in a war with me to be more patiente...

Thanks for the kind words
(sorry for the sir, im used to it)
  • #959
  • May 24, 2021 7:14am May 24, 2021 7:14am
Quoting joyny
{quote} Some people (including me) advocate here automated trading. Majority manual trading. But no matter automated/manual it is still day trading. I have a bunch of running EAs and some are scalping and some day trading and some swing. The core question of this thread in post Nr 1 is this: {quote} We speak here about the statistical edge. Automated traders advocate that EAs provide that info - they know probabilities and get that info with EAs very fast and at a low cost. Manual traders can get it via experience, via several years forward tests,...
Hi,
I'm just saying that personal attacks should stop and we should focus our posts on trading not the trader. Right now the attack (if this is the correct word) is on the trader

If I could write EAs then I would also use them. I think an edge should be logical and it will work in the long run.

I don't know. Maybe I don't like the way people are writing their posts.
I like your posts.

Thanks for your time joy
A trade should be based on an assumption based on facts
  • #960
  • May 24, 2021 7:26am May 24, 2021 7:26am
Quoting Tim_isoara
{quote} What is a Pip in Forex? - BabyPips.com
Hi Tim,
If you know what a pip is then you can also write it here.

Quote
overall i start to know where the ordeflow atm
Mark M and W high and low , D is where i find targets 4H and 1H to adjust technical analysis and look for paterns...run on liq..gap..
After that if i dont have a good entry i try to go to 15m but im trying to be more patiente and not go to those Tf tho...then i try to ride a part of the weekly
Ofc im still in a war with me to be more patiente...
Hi HBN08,

This is an awesome start (for me). You already know patience is a key part of trading, you already know what you want to look for in a chart before taking a trade.
I've been through the war stage. You'll be proud of yourself once this stage is over.
I personally like lower timeframes because they show what markets are doing in more detail but I don't think lower timeframes will work if you are looking for weekly trades. Someone else, who trades weekly, might know better.

Thanks for your time
A trade should be based on an assumption based on facts
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