Why even daytrade? | Forex Factory

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Why even daytrade?

  • #1
  • First Post: Jan 10, 2012 11:17am Jan 10, 2012 11:17am
It is definitely not for me, but I wonder why anyone else would waste their time trying to daytrade?
Lets say you are watching 5 instruments, each at 20min, lets say you watch screens for 8 hours per day you get 5*3*8 = 130 bars per day.
130 bars, depending on how picky you are with your trades that can spawn any number of trades, for me it would be less than 5. Probably 1-2 trades mostly if even.
So much can go wrong while daytrading, you are under pressure to make quick decisions, you can overtrade, you can get bored, mad at the markets, trying to make money back in a rage, spiraling out of control and all the "good stuff" that lots of people know from daytrading.

Now compare it to going through 130 instruments after market close on daily bars. You still get 130 new bars, less noise, you are more focused and aren't under time pressure to perform and make quick decisions.
Most importantly you don't have to wait for things to happen, if there isn't a trade you can just move on to the next chart, maybe add a new trendline and move on.
This way of trading is so amazing for me I can't fathom why people would waste their time looking at intraday charts at all.

Could someone make the case for daytrading?
  • #2
  • Jan 10, 2012 11:56am Jan 10, 2012 11:56am
using bigger accounts to attempt to catch smaller movements.

people erroneously believe that the market is TOP to BOTTOM when in fact is BOTTOM TO TOP.

the tick will create the minute which will create the hour, which will create the day, which will create the week, which will create the month, which will create the year.


the more you zoom out...the more the guess work
AVT INVENIAM VIAM AVT FACIAM
  • #3
  • Jan 10, 2012 12:06pm Jan 10, 2012 12:06pm
The more you zoom in the harder it becomes to beat the spread
  • #4
  • Jan 10, 2012 12:10pm Jan 10, 2012 12:10pm
Very true. I dont like intraday trading. I've done just a bit of it and its frustrating and angering at the same time.

I am by no means experienced but Ive made more on daily charts than intraday. IN fact Ive lost trading intraday and even backtesting using Forex tester, its so frustrating to test intraday with all the noise and choppiness. I guess its my personality, intraday does not suit me.
  • #5
  • Jan 10, 2012 12:12pm Jan 10, 2012 12:12pm
It's all about the dead presidents. I watch one pair and one pair only (EURUSD), I as a scalper trade 2-3 hours a day, then pack up and enjoy the rest of my day.

The guy above is absolutely right, the higher the time frame the more guesswork. You have no idea what crazy political policies are going to make huge movements, but it's really easy to guess where something is going on the 5 m chart.

Yes, it's harder to beat the spread, but with the right broker it's hardly an issue.
  • #6
  • Jan 10, 2012 12:21pm Jan 10, 2012 12:21pm
Quoting taub
It is definitely not for me, but I wonder why anyone else would waste their time trying to daytrade?
Lets say you are watching 5 instruments, each at 20min, lets say you watch screens for 8 hours per day you get 5*3*8 = 130 bars per day.
130 bars, depending on how picky you are with your trades that can spawn any number of trades, for me it would be less than 5. Probably 1-2 trades mostly if even.
So much can go wrong while daytrading, you are under pressure to make quick decisions, you can overtrade, you can get bored, mad at the markets, trying...
Daytrading just means that you open/close position within the same day. You can capture triple digit gains sometimes with daytrading so, if you're good enough, spread/noise shouldn't matter.

what i like about day trading is the opportunity to grow quicker. Sure position traders/swing traders enjoy the 'stress free' trading, but they have to deal with various market conditions over months or years. Daytraders can learn so mcuh in just a few months.
  • #7
  • Jan 10, 2012 12:37pm Jan 10, 2012 12:37pm
That's true, for learning seeing more bars is better no doubt. But then there is always replay.
  • #8
  • Jan 10, 2012 12:38pm Jan 10, 2012 12:38pm
Quoting taub
The more you zoom in the harder it becomes to beat the spread
That's certainly true. For day traders trying to beat their costs in terms of spread and slippage is probably the main reason they lose money in the long run.

Look at the Euro daily chart. Dropped from 1.49 to 1.27 so 2200 pips but it took 178 days. Big move but only 12 pips/day and you have a 1000 pip rally in the middle so any trend follower would have got knocked out before the final leg down.

Anyway the big reason to day trade is that you can get 0-5 trades / day which could easily equate to 1000 / year. So the underlying expectancy of your system should play out. On a daily chart you'd be lucky to get 3-5 / year / pair. And the correlation among related pairs is high so there are not that many independent trades.
  • #9
  • Jan 10, 2012 1:05pm Jan 10, 2012 1:05pm
different strokes for different folks

some people prefer the fast paced environment of daytrading, while others prefer the slow pace of position/swing trading.

I'm not sure what the point of this thread is. If you're saying that daytrading is challenging, yes it is, just like it is challenging to position trade/swing trade.

But if the argument is that daytrading is a loser's game, then we can argue with language all we want, but i've looked at trading results from successful daytraders (both manual and auto). as far as longetivity is concern, i mean that's up to individiual to interpret what is considered to be a successful track record.
  • #10
  • Jan 10, 2012 2:31pm Jan 10, 2012 2:31pm
Quoting PipJaeger
It's all about the dead presidents. I watch one pair and one pair only (EURUSD), I as a scalper trade 2-3 hours a day, then pack up and enjoy the rest of my day.

The guy above is absolutely right, the higher the time frame the more guesswork. You have no idea what crazy political policies are going to make huge movements, but it's really easy to guess where something is going on the 5 m chart.

Yes, it's harder to beat the spread, but with the right broker it's hardly an issue.
Agreed. And here in the UK it's possible to trade EURUSD with no spread at all
  • #11
  • Jan 10, 2012 3:10pm Jan 10, 2012 3:10pm
Quoting the redlion
using bigger accounts to attempt to catch smaller movements.

people erroneously believe that the market is TOP to BOTTOM when in fact is BOTTOM TO TOP.

the tick will create the minute which will create the hour, which will create the day, which will create the week, which will create the month, which will create the year.


the more you zoom out...the more the guess work
yes.

i believe trading intraday to 48 hour (thats my average swing trade) is my span of trading and yes u can call me a daytrader. red is right - its the same dang thing - just looks different with different visualizations.

also to hilmy's statement it is absolutely undeniable blabla trading vs bla bla is just as hard. its all based on capability, preference, risk portfolio (actually this shouldnt change). . . and TOLERANCe.
Have I got something on my face, SOLDIER?
  • #12
  • Jan 10, 2012 3:23pm Jan 10, 2012 3:23pm
redlion:

"the tick will create the minute which will create the hour, which will create the day, which will create the week, which will create the month, which will create the year."

perfect


Learning the hard way, i was able to study price for about 800 hours in 6 months, now fast TFs and even tickdata evoke forms in my head that "slow traders" will see 1x per month. When ignoring fast data, you should have good reasons, nice capital and moderate goals.

I had my amazing crash course in trading, thanks to fast price action, and it exactly fits my needs.


Success and Insight everyone
  • #13
  • Jan 10, 2012 3:28pm Jan 10, 2012 3:28pm
I believe one of the reason some trade intraday is due to the ability to grow a smaller account large in a shorter amount of time compared to larger time frame.

Trading smaller time frame allows you to trade larger position size due to smaller risk. For example, I trade off PA and most pinbars in the lower time frame are generally 10-20 pips, meaning that's how much risk I have. If I was to do this on a daily chart, pinbar can run 100+pips and to even trade that my position size will have to be a lot smaller.

Then we look at the gains. I can go for a 1-2% gain within a day due to trading larder position size. On daily, how long will it take?

The above is my opinion of course and one reason why I trade lower time frame.

My 2c
  • #14
  • Edited 4:14pm Jan 10, 2012 3:29pm | Edited 4:14pm
Quoting taub
It is definitely not for me, but I wonder why anyone else would waste their time trying to daytrade?
Maximum opportunity.

Good call on the emotions etc., tho.

I don't get why 'one bar - one (symbol)' etc. I gotta look at hundreds to a thousand bars before I feel really comfortable about trading, so the 1' works for this.

Oh, alright -- Maybe you mean one bar per symbol updates an automatic indicator.
For chart drawing, I've found much more is better. It brings in the MTF factor while staying on the same TF.

Plus, the 'lower timeframe, fewer pips' mindset gets old.
Available from potentially higher detail and thus lower risk
is the same reward (50-200 pips, as well as a bunch of small ones) and a greater number of opportunities.
  • #15
  • Jan 10, 2012 3:50pm Jan 10, 2012 3:50pm
I find 4 hour charts to be very good descriptors of what is happening, On one hand not lagging too much behind the recent major trend and on the other covering up minor moves. But for day trading purposes I use hourly charts.
  • #16
  • Jan 10, 2012 3:55pm Jan 10, 2012 3:55pm
Quoting taub
It is definitely not for me, but I wonder why anyone else would waste their time trying to daytrade?
Lets say you are watching 5 instruments, each at 20min, lets say you watch screens for 8 hours per day you get 5*3*8 = 130 bars per day.
130 bars, depending on how picky you are with your trades that can spawn any number of trades, for me it would be less than 5. Probably 1-2 trades mostly if even.
So much can go wrong while daytrading, you are under pressure to make quick decisions, you can overtrade, you can get bored, mad at the markets, trying...
I'm a day trader, 1 trade everyday win or lose thru pending orders, closed/cancelled at the same day.

My reasons:
1. Heart calling: I feel like day-trading.
2. I like quick profit, small losses.
3. I like my custom unique approach, which runs on intraday.
4. It works for me.

I trade 1 currency only: AU, because of personal preference & aiming for specialty. I watch 1 hour bar only, 24 bars per day.

I feel no pressure. I've made my peace with Mr. Market, Mr. Profit, and Mr. Loss and now they've been working together in a positive manner for me

Imo intraday or long-term trading are meaningless by itself, it is the 'you' who give it meaning. And the meaning you give it will determine your results. Believing is seeing
The tone of your words reflects the quality and result of your trading ;-)
  • #17
  • Jan 11, 2012 7:50am Jan 11, 2012 7:50am
sorry but am maybe off topic so far but I dont know why I got this phrase repeating itself in my mind

Day Breakers
Day Brokers ) .. Vampires )
have you guyz watched the movie : day breakers?


day traders are successful so far ... at least as I know !
  • #18
  • Jan 11, 2012 10:06am Jan 11, 2012 10:06am
Quoting saidsaid
sorry but am maybe off topic so far but I dont know why I got this phrase repeating itself in my mind

Day Breakers
Day Brokers ) .. Vampires )
have you guyz watched the movie : day breakers?


day traders are successful so far ... at least as I know !
...?
  • #19
  • Jan 11, 2012 12:47pm Jan 11, 2012 12:47pm
As a day trader myself this is easy to answer. The main advantage of day trading is that you get more opportunities. It means more $$$ and NO weekly drawdown.

The challenges of day trading is dealing with boredom while waiting intensely for the setup to develop.

I disagree with you that in day trading you are under pressure to make quick decision or get mad etc. For any style of trading you should plan your trade and trade your plan. If trading is not effortless and stressless for you, then you are probably a losing trader.
Riding the order flow
  • #20
  • Jan 11, 2012 3:22pm Jan 11, 2012 3:22pm
Quoting Binyamin
If trading is not effortless and stressless for you, then you are probably a losing trader.
epic
The tone of your words reflects the quality and result of your trading ;-)
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