Why do you keep saying that daytrading is a losers game?
Because it is, by and large.
Sure there's people who beat the market day trading. There's also people who win the lottery.
>>1068801
because there are firms that hire teams of phds who dedicate their lives to using advanced statistical models to eat day traders alive
because the market makers do the same and spend their time thinking about ways to cum in the fishes mouths
I know because I've worked at both
you cant trade short term solo anymore, you can ONLY invest long term based on business fundamentals
if somebody succeeds its because they did it in a bull market where everybody is making cash, or because if 100 people throw their savings away randomly at least a few will end up positive
>>1068801
because there are automatized systems that do this and there is no way a human can beat a computer.
Let's say I get a good foothold on the market, and don't invest for a living but follow the market as a hobby. I should be able to ride the predictable waves right?
>>1069014
>there is no way a computer can beat a human
FTFY.
>>1069039
So when you are trading your $40,000 account and you have a 4-bar 30 minute breakout of the opening range, you think, "OK, here we go..." and you go in the direction of the breakout. But........somewhere there are 48 hedge funds and/or large speculative trading entities who see the little volume spike of the small speculators. The big traders computers run 5 million calculations in less than a second and their probability analysis predicts that if they can get the market in play to reverse for 60 minutes with a massive move in the other directions they will make close to $400,000 for the day.
So you are sitting there waiting to make your little day trading profit on a thousand shares of something and a tsunami of opposite direction trades hits your screen and you shout "FUCK!" and spend 10 minutes looking for "news" to explain what is happening in front to of you and soon you're down $4,000 in your $40,000 account and and you get out (hopefully) and sulk. The next day the market goes lower, you jump in to make money back and it happens to you again.
Goldman Sachs day trades and makes $1,000,000 a day doing it. Get enough money and you can trade like them too.
>>1069049
who the fuck enters after a 4 bar 30 minute breakout, you're just asking to get fucked. And this is by far the most paranoid shit of all time. "big trader computers" spot when speculative trading entities show up as tiny blips, ok buddy, yeah they really give a fuck if you buy 30 shares of an etf
>>1069049
>I must have lost my money because the large firms are out to get small traders like me.
Not recommending people daytrade, but that's completely wrong. You have no idea.
>>1068801
It's because people go about it in the wrong way. Vid very related.
https://www.youtube.com/watch?v=9f1GALvr0O4
>>1069046
Wow, this one unsubstantiated example has overturned the statistics of a large group.
>>1069054
Computers don't care, that's the thing. They're completely objective. They just spot hard to spot patterns using statistics and machine learning.
Welcome to the new frontier.
>>1069063
>Wow, this one unsubstantiated example has overturned the statistics of a large group.
>>1069061
you sound like the typical anxiety riddled terrified beta cucks this place is infested with
yeah, supercomputers spot patterns constantly, but they are market makers, they create large movements so they can make big percentage jumps off group movement. But if you aren't completely braindead you can either spot a longer trend and its supports (if you aren't actively day trading)
Or you can tag along when you spot a stock hit a support in the middle of the day when things aren't as volatile. (if you are a little braver)
and then in the morning you can easily spot a premarket move and then set a limit order to take advantage of a dip after the open
there are a million ways to make money consistently day trading, you're just a paranoid loser who spends his time thinking about whats wrong with the world and now you're trying to infect others with your beta self defeating attitude.
gtfo
Why do you think there are hundreds of "consultants" who sell expensive books and courses on "technical analysis"?
Why do they need to sell books instead of trading themselves?
>>1069070
>anxiety
>terrified
>braver
>paranoid
>defeating attitude
Computers don't feel these things. I program computers.
No, I just understand enough mathematics and computer science to get it. Having said that, I accept my brain's limitations and can also use computers to do my bidding. Every time you get a can't miss trading strategy, a computer learns it (if they don't already know it). You can't beat computers at pattern recognition and numerical analysis.
btw, what's the name of that guy that made a billion dollars through day trading? Oh right, there are none.
According to one academic study, 4 out of 5 people who do it lose money and only 1 in 100 do it well enough to be described as "predictably profitable."
>>1069080
>only 1 in 100 do it well enough to be described as "predictably profitable."
Those are actually pretty good odds.
Also it's to be expected since for one person to profit a lot, others have to lose.
>>1069049
>hedge funds going after small speculators
kek
>>1069113
They're going after maximum profits. That profit has to come from someone. Guess who's the sucker.
>>1069070
>implying you "easily spot" things that don't exist and are just reading tea leaves and getting lucky occasionally
Confirmation bias: the post
Day traders are really good at losing their life savings and saying it was because they misread the charts. Surprise: you can't read charts. At all.
>>1069120
Keynes day-traded forex and profited consistently (not that I'm defending TA).
>>1069073
Maybe they can't control their emotions and be disciplined.
>>1069124
>implying it matters how people made money before modern markets
He would absolutely lose the shirt off his back if the tried it today.
>>1069109
>stocks are zero sum
Learn to tie your own shoelaces before you delve into stocks
>>1069014
You dont have to beat a computer. That's like saying every shoe store has to beat Walmart to be profitable
>>1069049
You just plain don't seem to know what you're talking about
>>1069073
There are hundreds of books on nearly every sunject under the sun. I don't see what you're getting at.
>>1069079
Once again, explain why you have to beat computers to be profitable.
>>1069080
One academic paper written documenting a questionable study of daytraders in Taiwan
>FTFY
>>1069120
No, YOU can't read charts. Many people do.
Of course intraday trading probably isnt the best stragtegy for your average individual. It takes an incredible amount of time, smarts and research to be succesful at. I would suggest a combination of swing trading and very long strategies for even someone with say, less than two hours to devote to trading a day, but that's just what's appropriate for me. If you have enough capital and tons of time, you can become very profitable. Thousands of prop traders make very profitable careers intraday trading
>>1069138
>stocks aren't zero sum
Get a load of this retard.
>>1069138
If your strategy consists of detecting patterns then computers will and have already exploited it to the point that it's unprofitable, then they go onto to exploit patterns our human brains can't even detect.
However, if your strategy is to invest in fundamentals long term and buy at a discount then you already beat computers. At the moment computers can't quite analyse stocks long term like that (but they provide some great tools for humans to fill in the gaps).
Suppose computers could perfectly pick undervalued companies, then they would bid them all up to their fair value, and sell them down to their fair value and we would be closer to an actual efficient market barring technical details and who-knows-whats.
>>1069118
the amount of money required to move price to take the money from the small fry outweighs the money they would make from the small fry. nor would the risk of tying up such capital warrant going after the small fry.
(you also have more than just one player who can move the market, so they are watching each other for when their capital is tied up to strike each other)
>>1069143
People have different time preferences, so stocks aren't zero sum unless you have similar time preferences.
>>1069144
computers are more about risk management rather than profit machines. also, they are more so for automating trade transactions for human brokers because having 1k unique orders to fill at open is physically impossible unless it's algo'd.
>>1069148
What that poster should have said is that HFTs will wipe you out even if they're not trying to. HFTs do not give a shit about technical analysis -- they are about arbitrage and front-running.
If you are sitting there trying to run technical analysis on a stock that happens to be targeted by an HFT, prepare to see your earnings decimated (unless you happen to be going the same direction the algorithm happens to be going at the time)
>>1069159
most HFT are for brokers... not speculators. as in they are broker trades... for their clients.... do you understand?
>>1069162
That is the most wildly disingenuous way I have ever heard HFT described. Congratulations. You either work for one and have been schooled in how to make them sound harmless, or you have no clue what HFT actually does or what it is they do for brokers that makes them so successful.
The fact that you think this is a conversation about speculation rather than about the mechanisms by which HFT provides liquidity (which, as stated by me and others, will RAPE your technical "analysis" if you run into one), makes me think it's the latter.
>>1069159
Thats not what HFT is about. They don't move prices, they typically just collect fractions of pennies buy seeing an order and then buying slightly lower. Their only competition is other HFT firms who are trying to get there first
>>1069168
Literally by doing that they are moving the price you BUTT FUCKER.
A lot of very respectable people in the industry are of the opinion that active investment strategy's do not work in the long term
>>1069170
No, they arent. What I said went right over your head. Slow down and think about it
>>1069171
>A lot of fund managers in the industry are of the opinion that active investment strategy's do not work in the long term
Ftfy
>>1069171
Day traders are just like poorfags who play the lottery. Always so hopeful.
>>1069172
No, what you did is quoted bullshit off wikipedia that you don't understand. There is a reason that HFTs are, you know, called market "makers". They will buy/sell any trade, and in doing so, they skim off the top which raises the price/lowers the price of the instrument every single time.
For people day trading, these movements will seem nonsensical. And they are. They are completely outside the scope of technical analysis, and there is nothing you can do to anticipate them. All you can do is lose your money, which most active traders BY FAR do.
ITT: technologically illiterate business school dropouts think they can recognize patterns and make trades faster than supercomputers that Wall Street spent millions of dollars on just to figure out the optimal place to host them for the shortest ping times
>>1069055
he's not saying they're attacking him, you just have to compete with it
>>1069166
>authority fallacy
>>1069175
You seem to be complaining about adding .000001 to the spread, which is so tiny it would never even show up on a chart. Is this accurate?
>>1069138
>One academic paper
http://www.econ.yale.edu/~shiller/behfin/2004-04-10/barber-lee-liu-odean.pdf
http://www.investorhome.com/daytrade/profits.htm
http://faculty.haas.berkeley.edu/odean/papers/Day%20Traders/Day%20Trading%20Skill%20110523.pdf
http://www.iassa.co.za/wp-content/uploads/journals/075/iaj-75-no-3-ryu-final.pdf
Is it possible to make money daytrading? Sure. Just like its possible to make money at a casino or playing the lottery. Its pure chance, no skill involved, and very low probability of coming out ahead over any meaningful period of time.
>how do propfirms exist if trading intraday is down to luck? that throws a spanner in the 'luck' argument
>hurr durr
>day trading exists so it MUST be profitable, right?
>right?
>right?
>*crickets*
The denial is real.
>>1069192
Oh shit the autistic kid with the copy pasta is back
>>1069192
it's pure chance that people buy/sell things
like they literally took a die and rolled it to see if now is the time to buy/sell
this literally what you're saying
>>1069197
Is that honestly what you think he said? Can you read, or do you just lack the ability to comprehend?
>>1069197
I'm sure they intend to make their trades. It's just that their decisions have very little effect on the outcome. At least this is true when looking at whether day trading outperforms benchmark investing strategy, such as indexing, on an after-cost basis.
The point is that there's no correlation between skill, intelligence, experience or resources, on the one hand, and making profitable daytrades, on the otherhand. Whether you do make profits above the benchmark is random, and therefore, its not inappropriate to call it luck if/when you land on the right side of the ledger.
Hope you understand it better now.
>>1069207
>millions of profitable daytraders exist and maintain profitability
>it's all just luck
Stop drooling into your spaghetti-os for one second and listen to yourself
>>1069204
>it's pure chance
When he starts making the comparison of roulette to stock trading, it's like saying you only buy if the ball hits 33 black. Not because you actually want to...
>>1069207
with intention in trading, skill becomes apparent. it's like in poker: people intend to do different things with the same hand.
>outperforms
Do you even 2/20?
>>1069220
>2/20
Bane?
>>1069220
Making a comparison to roulette is bad, but only because in roulette everyone has the same shitty odds, as opposed to the stock market where certain players have the ability to make trades at faster speeds and with greater access to information than you.
>>1069218
Well, 5% day traders do beat the index. So if there's 20 million day traders in the world then we'd expect to find a million profitable one. Seems reasonable. Also seems like really, really stupid way to manage your money.
Also, the 5% statistic only applies to beating the index. It's possible to be profitable but still underperform the index. That accounts for a lot of day traders. They don't necessarily lose money ... they just make a lot less than someone who adopts the better strategy.
Hope you understand it better now.
>>1069220
>with intention in trading, skill becomes apparent
I'd love to see some evidence of that. It's an interesting statement, but it runs counter to every expert and every published study on trading that I've ever seen or heard. So any source would be appreciated (published articles please; no personal anecdotes or general observations).
>>1069233
Are you suggesting any profit made from active trading is completely due to luck?
>>1069241
Some of it is luck, some of it is the exact opposite of luck, and the result of co-location with stock exchange servers to achieve lower-latency transactions and flash trading.
>>1069248
So you are saying..
All profit made from active trading is a result of either luck or high frequency trading algorithms
>>1069241
>Are you suggesting any profit made from active trading is completely due to luck?
No, I'm not aware of any evidence to support going that far. When referring to luck, I'm only talking about the 5% of day traders who outperform indexing.
There are 95% of day traders who fail to beat the index. That means they generate after-cost returns less than ~9-10% (based on historical index returns). So a day trader who averages 2% gains annually is still making a profit, but is obviously not deploying his money optimally. But to your question,I'm not aware of any studies that say his 2% gains are due to luck. They might be, or they might not be. I'm not sure we care because we do know, to a 100% degree of certainty, that he's trading sub-optimally. That tends to end the inquiry.
As for the 5% of day traders that do outperform the index, there are studies that show that active traders who beat the market benchmark do so only by luck, not by skill, knowledge, experience, intelligence or resources. This is tested by evaluating the ability of these same traders to repeat their successes. Since most active traders are unable to repeated outperform in successive, statistically-significant time periods, the researchers conclude that the successful time periods are due to luck and not some attribute of the trader. So yes, the 5% of day traders who beat the index do so only by luck.
>>1069252
So you are saying...
Anyone who actively trades and beats the index benchmark that year does so purely due to luck?
>>1069255
First, I'm not "saying" anything. I'm telling you what the academic research shows. I'm not an researcher and I hold no PhD's. My opinion means as little as yours and everyone else's on this board. I'm just a guy who's smart enough to listen to people smarter than me when they study this stuff.
That's important, because most of the people who try to argue in favor of day trading, forex, active trading, commodities, gold, etc., do so through anecdotal comments, unsourced evidence, personal opinion, and isolated examples. These are terrible ways to find the truth, as I'm sure you realize.
Second, since we're talking about large sample groups here (there are millions of traders, after all), you would never word your inquiry using a phrase like "anyone who actively trades." Such a statement would be refuted by finding one single contra-example. That's that the goal here. We're not discovering universal laws of physics; we're discussing principles of sound investing strategy to a degree of scientific certainty.
In academia, what it means to draw a conclusion to a degree of scientific certainty depends on the nature of the inquiry. There are many different confidence levels that might meet the standard, depending on the circumstances.
Now I'm not a mind reader, so I can't really interpret your ambiguous question, Are you asking if the statement is a universal law, or are you asking if the statement is true to a reasonable degree of scientific certainty, and do you understand the difference?
>>1069046
>I've made 6k in a few months
congratulations you've made it passed the poverty line. How much time and effort did you put in?
>>1069278
Here is an academic study documenting the benefits of smoking cigarettes:
http://europepmc.org/articles/PMC3151730
If you have a strategy trading (i.e limit, stops, profit targets, recognizing intraday patterns on particular stocks), you can be successful at it. Most people don't do this and let emotions like greed and fear take over.
There are always easy setups to scalp if you have the discipline to implement rules into your strategy.
Managing your risk should be your #1 rule when trading.
>>1069223
2/20 refers to admin fees and whatnot that hurt "performances" of funds and whatnot
>>1069297
Yeah I know, check your post # was what i was saying
>>1069278
>talks about studies and whatnot
>never gives a citation of one
>>1069294
I'm sure day trading has its positives to despite most people statistically losing all their money.
- get to sit on your ass all day and pretend to be productive
- get to gamble compulsively all day, but oh no it's not a problem, it's a trading strategy ;)
>>1069300
i will crash this market
with no survivors
>>1069294
>Here is an academic study documenting the benefits of smoking cigarettes:
>http://europepmc.org/articles/PMC3151730
Do you have a point here? According to the article, nicotine has a positive effect on fine motor skills, alerting attention-accuracy and response time (RT), orienting attention-RT, short-term episodic memory-accuracy, and working memory-RT. I'm not an expert, but this doesn't sound surprising to me at all. Nicotine is a powerful drug, with many known positive effects.
Did you even read the study you posted?
Is this some misguided attempt to be clever? Because you clearly lack the intelligence to pull it off. It doesn't take much brainpower to understand that a drug can have both positive and negative effects, nor is it difficult to understand that a drug (nicotine) is not the same as its most common delivery vehicle (smoking).
Also, if you were trying to draw some analogy between nicotine and day trading, you've failed.
Hope that was helpful.
>>1069304
see
>>1069192
You're not too bright, huh sparky?
This may seem off topic, but if one could get a copy of an algorithm used by Goldman Sachs, would there be any way to make a counter algorithm, like one dedicated to exploit the weaknesses of the original algorithm?
>>1069304
He's posted a couple semi-related papers written by econ majors documenting studies of Taiwanese daytraders in some other threads. There is no such study in America, since there are thousands of daytraders employed at thousands of firms across the country that beat indexes every year. That would be enough evidence for most reasonable people, but he read What the Dog Saw and took that idiot Malcolm Gladwell seriously when he said Benjamin Graham "just got lucky a bunch"
>>1069313
No that's what Goldman Sach's algorithm is already doing. They take advantage of weaknesses in the market and buy up under priced equity. It's more or less a race to a big pot of gold, but they get the information on where the gold is first.
>>1069309
My point is that when you read an academic paper, you have to take it in context and then apply anecdotal and circumstancial evidence to reach a conclusion. Smoking might be beneficial in some aspects, but it's obviously bad for you for a number of reasons not stated in the study. Questionably trained day traders in Taiwan may not have done very well, but you have to look around and see that a lot of active traders in America do very well and apply that knowledgw to your conclusion.
>>1069309
>first article: taiwan
Dropped
(there's also a difference between day trading and investing, as noted in the very article you've cited)
(also, don't use last century's data, please)
even then, it also states the only reason why the "heavy daytraders" lose is because of transaction fees.
the second article is confusing to read and needs to be cleaned up. (also using last century's data)
then again, it's talking about the typical retail trader, you know, the average joe who doesn't spend every waking moment reading market news and whatnot.
third article, again, taiwan, states that while there are losers, there are consistent winners and even goes to show a little about how they go about winning.
fourth article is comparing the retail average joe to foreign fucking institutions... who do you think would win every time?
>>1069313
Everyone is building more sophisticated algorithms, and the more competition exists, the smaller the profits.
a brain operates. So-called "neural networks" and "genetic algorithms" have become common in higher-level computer science. Neural networks permit computers to create new rules and automatically change underlying assumptions by experimenting with thousands of random sequences and processes. Genetic algorithms encourage software to "evolve" by letting different rules compete, and combining the most successful outcomes.
Most software fails in pattern recognition because there aren't enough sequential rules in the world to teach a computer to discern between two faces, or to find almost imperceptible relationships between stock.
A machine that can generate complicated rules a person would never have thought of, and that can learn from past mistakes is a powerful tool
Traders have intuitive senses of how the world works. But with these systems you pour in a bunch of numbers, and something comes out the other end, and it's not always intuitive or clear why the black box latched onto certain data or relationships.
>>1069315
>written by econ majors
Umm, the authors have credentials a little higher than "econ major" sparky. They're professors at academic institutions with multiple published articles on economics, including trading.
What are your qualifications again?
>studies of Taiwanese daytraders
The authors of the studies in Taiwan (2 of 4 studies I posted, iirc) explain why those chose that market. They also explain why their findings are applicable to all other similar day-trading markets, including the U.S.
If you have a credible reason why these studies are inapplicable, by all means publish a critique.
What are your qualifications again?
>there are thousands of daytraders
There are thousands of lottery players too. Doesn't make it a smart financial move.
>>1069329
>Questionably trained day traders in Taiwan
Citation needed. The scope of the Yale study (1 of 4 that I posted) was "a comprehensive analysis of the profitability of ALL day trading in Taiwan over a five year period." (emphasis supplied).
It would seem you're making some unwarranted assumptions about a study you didn't even read. Hardly makes you a credible source for any purposes.
>>1069377
what are your qualifications again?
>>1069385
I don't need to post my qualifications because I'm not asking you to accept my word as authority. You, on the other hand, keep making unsubstantiated assertions of fact.
So into the garbage you go.
>>1069335
If you think you can design a better study, please feel free to do so. But until you have a credible critique of the existing science, you've been debunked.
Why are you in denial about the odds? You know that you're just a gambler hoping to strike it big. Does that make it hard to sleep at night.
Honest questions.
>>1069396
>I'm a professional poker player, by the way.
Omg, dying here. I couldn't script this better if I wrote it in advance.
Thanks man. Seriously. Great stuff.
>>1069170
HFT close bid/ask spreads. They make trading cheaper by collecting less than human brokers did in the past, especially when prices were in fractions rather than decimals.
HFT get bad press because dinosaur brokers are mad those darn tech kids are eating their free lunch
>>1069388
No, once again the point went over your head. The mere fact that there are millions of active traders that consistently beat index returns proves itself. You dont need academic studies to prove facts.
>>1069404
>ad hom after getting called out
>>1069411
>The mere fact that there are millions of active traders that consistently beat index returns proves itself.
see
>>1069233
>Well, 5% day traders do beat the index. So if there's 20 million day traders in the world then we'd expect to find a million profitable one. Seems reasonable. Also seems like a really, really stupid way to manage your money.
Its pretty clear you don't understand much about math or statistics. Unfortunately, I'm not sure I can help you. It's a big topic area to cover. Perhaps you can use Google an start with the basics?
>>1069416
Never said anything about you, kid. I just laughed. Literally. I actually chuckled. Sorry you didn't get the joke.
Anyway, Mister Pro Gambler, please tell us more ways to wisely grow our wealth. We know you advocate poker and day trading. What else? Honest question.
>>1069252
There is no study in the world that can prove luck. There are lots of studies that misuse the layman's definition "Rsquared means 'explaned by'" to collect awards and grant money.
>>1069425
Invest in businesses, create businesses, network with wealthy businessmen. That's what I use poker a vehicle for, other than using my natural born ROI to generate more money. I've gotten high with a cspan exec at a game before. Smart dude, though, really easy to read.
>>1069427
>There is no study in the world that can prove luck.
https://www.dimensional.com/famafrench/essays/luck-versus-skill-in-mutual-fund-performance.aspx
But hey, the author only won a Nobel Prize for his economic research. Probably just some hack econ major, right? Right?
>>1069428
Great blog man. I'd like to subscribe to your newsletter.
>>1069435
>no conclusion
By the way, Obama won a Nobel Prize...
>authority fallacy
>>1069445
So the "pro" poker player thinks a Nobel peace prize is the same as a Nobel Prize for economics.
Tell us more of your wisdom, especially anything having to do with business or finance.. Usually I have to pay a cover charge for comedy this good.
>>1068801
Give me one person who got rich from technical analysis ;)
>>1069449
Krugman won the Nobel, too. He's just as full of shit
There's a word for people like you, who take everything academics say at face value, ignoring real world evidence: students. I give you 2 years out of college before you realize academic awards are as big a circle jerk as the Oscars
>>1069461
Krugman's work on liquidity taps and International Trade is very highly regarded, regardless of his tripe in the NYT.
desu: The Fama/French paper and the Yale ones are very well done. The only one ignoring "real world evidence" is you senpai.
Here's an academic study in which 100 monkeys randomly picking stocks beat indexes. So if you get sick of beating the market day trading, you could just throw darts at a list of stocks and beat index funds
http://www.forbes.com/sites/rickferri/2012/12/20/any-monkey-can-beat-the-market/#1d31c8f46e8b
>>1069475
>http://www.forbes.com/sites/rickferri/2012/12/20/any-monkey-can-beat-the-market/#1d31c8f46e8b
>Give a monkey enough darts and they’ll beat the market.
The first line...
ENOUGH DARTS
N
O
U
G
H
D
A
R
T
S
Day Trading is just legalized gambling. Its different than investing which requires patience and studying.
>>1069480
>Seriously, the trick behind the outperforming portfolios had nothing to do with monkeys or darts. It’s all about smaller company stocks and value stocks outperforming the market over the period.
I hope you learned something today about why a good actively managed portfolio will always beat indexes
>>1069481
>Billion dollar firms pay individuals six figure incomes to gamble all day
Yeah, they dont do that, familia
>>1069485
I've never said otherwise.
>>1069481
Daytrading requires patience and studying. I've been studying for over 2 years. Sometimes I wait for several hours before making an entry that suits my setup. Some days I don't take any trade at all!
I work on increasing my size rather than making more trades.
>>1069489
Oh Im sorry, I thought you were the autismbro with the Taiwanese daytrading links
>>1069405
HFT also get in front of big players when they detect that some player is making big executions or places a exceptionally large order. In my country we can see who and what players are trading, we can see, for example, Goldman Sachs placing a large buy order a few ticks under current price, so HFT bots look to buy ahead of it.
>>1069475
>Here's an academic study
That's a Forbes article, not an academic study.
If you believe everything you read in a financial magazine, you're gonna stay poor. Learn to distinguish between real science and click bait.
>>1069491
Can I ask how much you make from day trading a year and how many hours a week you put into it?
>>1069485
>the trick behind the outperforming portfolios had nothing to do with monkeys or darts. It’s all about smaller company stocks and value stocks outperforming the market over the period
Small cap value index stocks have indeed outperformed broader market indices over statistically significant periods. There needs to be research into this, but it looks really promising.
None of this has anything to do with day trading.
>>1069491
>Daytrading requires patience and studying
Citation required.
Please provide some credible evidence of a correlation between skill, intelligence, experience or resources, on the one hand, and making profitable daytrades, on the other hand.
Thanks!
because in my opinion you can make money from day trading, but you take on a TON of unnecessary risk along with trading fees eating your profits it just doesn't make sense.
I mean you can spend your $40,000 or whatever you're trading and flip houses, sports tickets, motorcycles or whatever you are knowledgeable about and make WAY more money with far less effort.
>>1069517
So you really do think that billion dollar firms are paying individuals millions of dollars to sit around "getting lucky" all day?
For me, the fact that intraday trader is one of the highest paying jobs on Wallstreet is enough evidence that there's more to it then luck.
>>1069524
but these guys have bloomberg terminals they receive and send information quicker than you can get a hold of your broker. That's a SERIOUS disadvantage.
>>1069528
Oh yeah, Im not denying that they have a clear upper hand. But that anon actually thinks they are just getting lucky and there is no correlation between skill, time invested, and the ability to outperform indexes
Daytrading is most likely a terrible choice for most people, but it is very profitable for many who do it right
>>1069524
>So you really do think that billion dollar firms are paying individuals millions of dollars to sit around "getting lucky" all day?
I already explained above that its possible to make profits but still underperform the broader markets. I shouldn't have to repeat myself in the same thread. If you're going to participate in an intelligent discussion of the topic, it would help if you read all the posts, even the ones you didn't write.
The existence of the day trading industry does not mean that day trading is an economically optimal activity. The existence of lotteries does not mean that playing the lottery is an economically optimal activity. The existence of the casino trading industry does not mean that gambling is an economically optimal activity.
It's time to put this tired logical fallacy to bed. If you want to prove that day trading beats indexing on a risk adjusted basis, post some direct evidence. Thanks!
Hey /daytrader/s, I'm about to open my account on IB. What market data/news/research subscription should I buy, if any?
Is their $39/mo bundle worth it? Is any of it worth it?
>>1069535
So you think that thousands of billion dollar firms continue to pay individuals millions of dollars to not outperform indexes when all evidence suggests they do indeed outperform indexes every single year
>>1069513
Average $1300/week.
Average 3 hours/day. Sometimes my target daily profit is achieved in the first hours of trading, sometimes I'm "forced" to stay a little longer.
>>1069543
>all evidence
Hmm, I'm still waiting for that evidence. No isolated examples please (lets remember how statistics work, mkay?). Show me some industry numbers, without survivor bias please.
Thanks!
>>1069536
huff post
>>1069546
wow nice do you have analytical software or do you mainly focus on one company?
>>1069313
It's probably possible, but it'd have to exploit a serious structural weakness, like a pretty fundamental point about statistics or something, likely something that not many people know about yet.
Alternatively you could compete with raw computing power or some machine related way. Otherwise, what this guy said: >>1069340
>>1069411
There are lots of roulette wheels landing on 6 every day, too.
>>1069549
The fact that there are thousands of individuals being paid a base six figure salary plus many percentage points of commission on their profits and still beating indexes every year is enough evidence there is more to it than luck.
There is at least one prop trader who posts here now and then. Next time he does you should take the time to "lurk moar" and read what he says. It's very informative
.
But my guess is very soon you will spreg out like last time and start copy/pasting the same page of "hurr durr" 45 times in one thread
>>1069563
Yes, but no one is paying gamblers millions of dollars every year to play roulette. You must understand the difference?
>>1069566
You keep posting the same sentence over and over, as if that'll suddenly make it true. I've already explained why its not. Please stop acting retarded.
You said "all evidence suggests they do indeed outperform indexes every single year." Where's that evidence?
>>1069577
>You said "all evidence suggests they do indeed outperform indexes every single year." Where's that evidence?
The fact that beating indexes is their job and they are still employed. People make very lucrative careers out of beating indexes.
>>1069558
Futures. Not American, I trade Dollar and Index futures.
The technicals are the same, with some exceptions, but you should definitely focus on one stock or market. On exceptions: some news hit some markets more intensely than others.
>>1069159
So what you're saying is ->
50/50 chance of going same direction as large move made by HFT.
>with tight stop loss
= Stopped out at, lets say, a 15 point loss.
= Take profit off 60 point jump.
If your post wasn't bullshit, intraday trading with patterns would be boosted by this, because of the normal profit + irregular jumps in either direction.
>>1069580
>The fact that beating indexes is their job and they are still employed. People make very lucrative careers out of beating indexes.
That's not evidence. That's a logical fallacy, as I've previously explained.
So I guess your statement was false? Color me shocked ... SHOCKED!
>>1069577
The fact that traders make 100k+ a year. It's true that some are being replaced by HFT bots, but HFT strategies are limited and no algos can outperform humans as far as low frequency trading goes. You should step inside an institutional trading desk and see how the sales and trading desks work together.
If you look at a chart like this and say that it's impossible to make money, you have some serious problems.
>>1069603
You keep saying the same thing over and over. The fact that daytrading exists does not mean its a strategy likely to beat indexing.
I'd love to see some evidence that these prop firms routinely beat the benchmarks through trading activity (and not other revenue generating strategies that they use). Honestly, it would be remarkable and earth-shattering.
But you don't seem to have it. Color me shocked ... SHOCKED!
>>1069607
Strawman much?
You can make money at day trading. You can make money gambling. You can make money playing lotto.
But none of these have a long-term expected rate of return higher than a broad market index.
I realize that when you're losing an argument, its often desirable to move the goalposts. But let's try to be intellectually honest here. Thanks!
>>1069609
Actually I'm not looking to beat indexes, I'm looking for income because I'm not rich, so I use leverage.
Look at SMB Capital. Do you think they have been underperforming forever?
Now, most overperforming funds won't publicly expose what they are doing. Take a look at Verde Asset historic performance.
>>1069609
proofs?
>>1069611
>You can make money gambling. You can make money playing lotto.
Not consistently.
>>1069611
proofs?
>>1069612
>posts isolated example
I honestly thought we were past this. 5% of daytraders beat the index. You just named one, assuming you're correct about their numbers (I don't know and I don't care). I assume there are hundreds or thousands of others in the same boat.
Doesn't change that fact that on a risk-adjusted basis, its a losing strategy. You don't know if you're in the 5% until after you trade. And even if you do fall in the 5%, you probably won't do it again in the next testing period. That's how statistics actually work.
So any actual industry evidence? Thanks!
>>1069291
>Complaining about people making money
Shit some people around here are wound up too tight
>>1069616
yep and they don't have indicators that tell you when you going to win
>>1069627
>actual industry evidence
Thousands of intraday traders being paid millions of dollars to beat indexes. What you're saying is, "prove being an NFL quarterback takes any skill and isn't just luck." Well, of course you can't prove it, but it's an absolutely ridiculous position that no reasonable person would take. If NFL quarterbacking was just luck, teams would hire Mexicans to do it for $10/hr, instead of pay Tom Brady millions. So, essentially, the fact that is a high paying job is all the evidence necessary.
>>1069627
>Doesn't change that fact that on a risk-adjusted basis, its a losing strategy.
That's like saying being a football player is a losing strategy, because most people who try to become football players fail.
It is just a hard to master skill, just like Engineering is to Social Studies.
>>1069648
Interesting comment, though ridiculous.
First, we know that skill translates into performance in sports because we see it on the field every game. By contrast, 95% of day traders can't beat an index no matter how much experience, intelligence or resources they may have. Furthermore, there are academic studies showing that overperformance in stock trading are due to luck.
Lastly, and directly to your comment, we know that the highest paid advisors on Wall Street can't beat the indices. If effort, time, or research was a determinative factor in investment performance, then we would expect to find professional Wall Street trading firms regularly outperform index benchmarks. After all, these trading firms have top educated traders, massive research staff, and unlimited resources. Yet 90% of these firms can't even beat an index over time periods as short as 5 years.
http://www.cbsnews.com/news/s-p-spiva-midyear-2014-active-versus-passive-scorecard-active-underperforms-again/
http://www.zerohedge.com/news/2013-04-29/wall-street-rentier-rip-index-funds-beat-996-managers-over-ten-years
https://www.youtube.com/watch?v=SwkjqGd8NC4
https://www.youtube.com/watch?v=zqa-jSuXmYw
So, I'm still waiting for that contrary evidence. Because I've just proven that a professional trader having a "high paying job" does not mean that they will outperform the market.
Got anything else? Thanks!
>>1069661
>So, I'm still waiting for that contrary evidence. Because I've just proven that a professional trader having a "high paying job" does not mean that they will outperform the market.
Why would a bank or institution hire them, then? That's job market 101.
>>1069661
Although I agree with a lot of what you posted, never use Zerohedge as a source. Ever.
>>1069660
>That's like saying being a football player is a losing strategy, because most people who try to become football players fail.
Risk adjusted reward, son. The salaries of NFL quaterbacks justify the risk to those with enough potential to possibly make it.
If day trading paid 20-1 gains over indexing, then we'd have an interesting situation. But it doesn't.
So we're right back where we started. Anything else? Thanks!
>>1069665
>Why would a bank or institution hire them, then?
Because they generate million in fees? Duh.
Do I really have to hold your hold on every point? Please show some independent thought. Thanks!
>>1069661
We arent talking about mutual funds and 99.99% of all quarterbacks will never make the NFL. You're legit retarded if you think billion dollar firms would keep hiring people who dont regularly beat index benchmarks year over year
>>1069673
They could just automate it. No need to hire full time employees.
>>1069674
I've just proven evidence that refutes your point. Please stop posting the same comment over and over. Thanks!
>>1069673
>banks collect fees off their own daytraders
We got a smart one over here, fellas
>ya just can't beat indexes i tell ya
>ya can't
>pure luck, literal dart throwing
The objective of trading/investing is more about how to neutralize your risk then seek out where you can maximize returns. The people at the top are more worried about what risk they'll face rather than what returns they may obtain.
>if you can't beat an index you might as well just kill yourself
>>1069677
>We got a smart one over here, fellas
He asked about the professional money managers that I described in my post.
Please keep up. You're dragging down the thread. Thanks!
>>1069676
>please stop disproving the same stupid shit over and over again
Umm no
>>1069681
Daytraders are paid a base salary in the six figures and then huge commissions. What kind of fees do you think they are generating?
I'm curious as to your misconceptions of an entire industry
>>1069680
You make an interesting point, but I don't think many day traders are playing to hedge risk. Some, sure, I could see that. But I'd be surprised if that was prevalent.
The average investor, on the other hand, has to do serious risk management consistent with their life situation and goals. As such, the individual investor usually has to sacrifice gains for lower volatility.
It really highlights how bad day trading is. Even without the real-world limitations of the average investor, day trading can't compete with simple indexing.
Great comment anon. Thanks!
daytrading produces lots of comission costs and costs thru spread that's the problem. prolly 4/5 would beat it easily without trading costs. trade stocks but i would not advice to day trade.
then again. when people talk about beating the index i dont even know if they are talking about the percentage against the indexes or currencies or the percentage after the leverage strategies allow you to use. so you might be getting worse return than sp500 but much better return as you are able to leverage your ass up.
hedge funds cant be comparable to small private investors in any way. it's a completely different game.
even warren buffet quoted the shit. and nobody thinks warren is a trader like cohen etc. he is just a investor.
“If I was running $1 million today, or $10 million for that matter, I’d be fully invested. Anyone who says that size does not hurt investment performance is selling. The highest rates of return I’ve ever achieved were in the 1950s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It’s a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that.”
>>1069704
Stupid argument.
If I'm making 50 million dollar trades, a $5 fee is not going to make or break the trade
>>1069708
i see you dont understand a thing you are saying. not gonna argue with you
why is this argument still going? It's been settled two times in this thread already. They make their money off arbitrage, better analytics and superior connections.
yes you can make money, but you take on unnecessary risk that isn't justified by returns. On top of that trading fees and stagnant capital. It's not worth the opportunity cost.
>>1069708
You're missing the point of Warren's quote. Warren is basically saying there are fewer opportunities to effectively deploy $50 million in capital versus opportunities to deploy $10 million. It has nothing to do with trading commissions.
Personally, I've never like that quote because it sounds like apologistic bullshit, but on the other hand, I've never managed a portfolio of more than $50 million.
>>1069714
>>1069712
I'm disputing one line of your post.
>daytrading produces lots of comission costs and costs thru spread that's the problem. prolly 4/5 would beat it easily without trading costs.
This. This is sheer nonsense.
That's because an idiot wrote it.
Warren buffet is not an idiot, and I won't try to argue with warren buffet.
>intraday prop firm trader sees reports of a hurricane in Argentina
>the hurricane is set to pass over major cane fields
>comes into work and buys sugar futures on leverage while shorting stocks in the state-owned cane company
>hurricane annihilates cane fields and sugar futures soar
>trader closes his position with a nice 4% gain, taking 1% commission
>drives his $120,000 Tesla back to his million dollar mansion and bangs his supermodel wife
>somewhere, hundreds of miles away, in a trailer in Oklahmoa, anon wakes up at 1:30PM, wipes the cheetos off his acnecovered face, fills a bowl of Captain Crunchberries and cracks a mountain dew
>anon logs onto /biz/ and proceeds to educate the world..
>PROP TRADERS ARE JUST LUCKY ITS SCIENTIFICALLY PROVEN THERES NO SKILL JUST CASINOS AND GAMBLING THE DENIAL IS REAL
>>1069728
more people would be likely to win without trading fees, though.
>>1068801
it is for most people, especially the random amatures who try their luck at the various equities day trading shops across the US
on the other hand there are people out there consistently making money using intraday trading strategies - both independent guys and prop firms, hedge funds... mostly these are automated or semi-automated strategies
there is a guy in the other daytrading thread who is seemingly unaware of this and has now gotten quite butthurt to the point where he's resorted to repeatedly copying and pasting the same reply with a few scientific papers in order to argue that any intraday trading success is down to 'luck' - it is amusing
>>1069738
Jim simons at rentech for example...
just 'luck' apparently
>>1069735
Trading fees only affect those who don't have enough capital to be in the market in the first place.
The guy with 5 million doesn't care.
It will kill the guy trying to trade with 10,000$.
But the $10,000 guy is likely poor because he's stupid, and stupid is expensive in the market- just work more hours at burger king mister $10,000, it will do more for you
>>1069056
I fucking love those xtranormal videos.
And that one was brilliant. The little pauses - the blank stares through the fourth wall - laughed all the way through it.
(Because I made the same fucking mistakes when I was starting out. In fact, I still make them today. They cost me a bit less and I don't make them as often, but I still fuck up, and for the same reasons, as the n00b does.)
Thanks, Anon.
>>1069687
depends on the type of firm
there are daytraders in stocks in the US that are basically amateurs who've opened an account at a brokerage firm and pay a fee to sit in the office/rent a desk - these guys mostly lose money... and these are the people typically studied in the papers posted in the other thread by the poster who sounded like a stuck record
on the other hand there are propfirms in chicago employing futures and options traders to trade the firm's own capital, they'll get sacked quite quickly if they're not good and they will indeed get a salary and bonus
in Amsterdam there are a few options marketmaking firms that have been consistently profitable in intraday trading for years now
in London there are prop firms that both back traders to trade their own capital and will rent desks/clear trades for small prop firms, start up hedge funds and individuals... though the individuals who rent desks tend to be ex prop traders rather than amatures and there are far fewer of them these days - HFT has taken over... you need to be developing/running an automated strategy for the most part, using colocated servers.. though there are a small number still manually trading
>>1069014
>because there are automatized systems that do this and there is no way a human can beat a computer.
What a load of steming crap! Because these systems (be it a trading system or a flight sim) are using MODELS of reality.
Let's say that a model for trading is like this:
A + B = C
If you know two of them, you can tell the third with total accuracy. And the model has worked so many times that people assume that it's an accurate description of reality.
But if A = 10302 and B = 14890 then the model is like this
A + B = C + 1
And if enough people are using the model with the small flaw, then the model will eventually collapse.
>>1069056
>custom indicator simulator
>being cis
>>1069457
Paul Tudor Jones.
From your post I doubt you know him.
You're welcome.
I got no dog in this fight but I will say that people who are truly successful at this tend to shut the fuck up, unless they're narcissists. That might skew whatever sample size people are using to argue the merits of day trading. I notice that the better I get at it, the more I tend to tune out pissing contests, not that this conversation is one, but you know the type of conversations I mean. They just end up becoming more noise to filter out.
>>1069936
Meanwhile, the more indexes give back their QE gains, the louder ETF guys get
>>1069982
Kek. Actually, its whenever the market has a bad day, the day traders, momentum jockeys, forex heroes, and options wizards crawl out of their closets.
Not that I blame them. They haven't seen daylight since 2008.
>>1069388
>You know that you're just a gambler hoping to strike it big.
>implying even 5% of gamblers make what could be called a consistent profit from their endeavours.
>>1070414
Day traders do better than gamblers, statistically speaking, because there is a built-in positive (long) bias in the markets due to external influences. Since any trader can (and most do) play the long side of the market, the odds are always slightly in your favor. That why making profits as a day trader isn't remarkable or unusual. (What's remarkable and unusual is making profits in excess of the index benchmarks, for all the reasons previously discussed in the thread.)
By contrast, the gambler never gets to play the house side of any wager. Even playing the "Don't Come" line in craps with full odds, the best odds any gambler can ever get is something like 49%,
Perhaps you've never heard of rhetoric, but to call day traders "gamblers" doesn't imply that they face identical odds as, say, casino players. It simply means that like casino players, they take chances that are statistically know to be suboptimal.
Hope that's clear now.
>>1070443
Maybe 95% of people are just too shit and the other 5% get their funds.
>“It is the one sphere of life and activity where victory, security and success is always to the minority and never to the majority.
- Keynes
Just because most people are shit doesn't mean everyone is. Keynes btw made 13% per year even through the great depression.
>>1070443
>By contrast, the gambler never gets to play the house side of any wager. Even playing the "Don't Come" line in craps with full odds, the best odds any gambler can ever get is something like 49%,
professional poker players, sports betters and black jack card counters do
I guess that is the difference they have an edge
similarly with daytrading, the average chump at a brokerage/daytrading shop who goes in and rents his desk will have no edge - he has to overcome his fixed costs, his commission costs and essentially he's just trading random noise. If you look at a large sample of these people you'll see a similar result to Casino gamblers, they'll mostly be losers and the few winners will mostly be lucky (not necessarily all though - there is always room for exceptions).
You've then got the established firms involved in high frequency trading, options marketmaking etc.. they've got an established edge, their strategies have been created through statistical analysis of terrabytes of price data - they've got hardware edges too - colocated servers, microwave links enabling them to arb small price differences between exchanges etc..
There are also various independent pros, people who've worked on these sorts of strategies but are now self funded, also using colocated servers, automating their strategies but without the resources of the larger firms - they'll typically not be the fastest so can't directly compete in straight arbs etc.. but there are other inefficiencies that aren't scalable.
Lastly there are ex locals(ex floor traders) - some may know a particular product intimately, have various connections in the marketplace and have an information advantage
bottom line is the need for an edge, by default the majority of amature day traders won't have one - some might survive for a short time by luck alone but in playing a negative expectation game your risk of ruin increases the more you trade...
>>1069600
>evidence people doing something is not evidence of people doing something
huh?
>>1070457
Keynes was an insider. He did what would today be considered insider trading.
I personally disagree with those laws, but it puts it in perspective. He had plenty of industry and government contacts from his Cambridge days with the Pitt Club and Cambridge Apostles.
I'm not saying this to disparage, but it's pretty interesting shit. The dude was probably /biz/ even if most here disagree with his economics.
>>1070555
>Keynes was an insider. He did what would today be considered insider trading.
How do you explain the following then?
>On the subject of inside information he said: “the dealers on Wall Street could make huge fortunes if only they had no inside information”.
>>1070557
He was notorious for talking shit.
Sorry, John.
Brilliant comments from people who haven't actually day traded.
>>1070569
And if they have and it didn't work then they sucked.
And if they did and it worked then it proves your point.
Nice try, asshole.
>>1068801
Because skill is only relevant in long trading games? You can't build anything meaningful in a small time frame. You're literally just a compartmentalization of risk for a firm day trading. Most good day traders are only a bit better than lottery winners.
>>1069132
by and large hedge funds themselves are not HFT -- places like citadel may have an HFT arm but its not part of their hedge fund portfolio (in fact its a different entity entirely)
>>1069168
literally they don't do that -- most HFTs are market makers and will buy and the bid, sell at the offer collecting the spread and rebates
> seeing and order and buying lower
learn 2 reg nms. if the market is 9.99x10.01 and HFT sees an order to come in to bid at 10 no one can buy at 9.99 because the bid at 10 is now protected
>>1068801
You're all still dumbasses. Pay attention kids. This is how real day trading is done.
http://www.bloomberg.com/news/articles/2011-05-10/goldman-sachs-traders-lost-money-one-day-last-quarter-best-record-in-year
Pic related: It's Hank Paulson.
>>1070650
i think that daytrading in its normal context is completely separate from what the big banks do. i'm sure theres a dictionary definition that disagrees, but in most people it evicts the memory of people sitting in their basement playing stocks/futures
the prop and bucket shops are "sponsored" day trading, hedge funds can be close to it depending on the size (some are just bucket shops in disguise)
in this day and age most bank traders are "flow" traders due to volker and a number of other things. this means they'll execute clients orders on an agency basis or with a guaranteed benchmark. i think /biz/ is deluded into thinking working at a banks trading desk is the same thing as trading at home
>>1070659
depending on the asset theres a few ways it normally happens in liquid markets -- this is why sell side guys have been called flow monkeys in the past few years
1) client will call asking for the price on x, sales will contact trader and find out the market and quote is given back to the client. there may be some back and forth, then client either takes the price or goes elsewhere. if the order was large enough to warrant this probably its not in the traders inventory so he will try and hedge/cover on the open market. during all this happening another client may be interested in the other side and he can try and unload it there. this is essentially market making but not always termed that way. illiquid stuff trades this way a lot too
2) client will call asking for x on an agency basis, sales books ticket to trader and trader will execute it on the open market. trader and sales will collect commission. in some spaces the trader isn't even required here, sales can just fire it off in an execution algo or the like. this has become more frequent in the past 5 years with the 'salestrader' role. note that sales people cannot hold inventory, they can purely act as an agent
3) client will call asking for x at the eod price (or some other benchmark like vwap, etc.). sales contacts trader to see if they are interested and if so sales tickets it over to trading. the goal for the desk here is simply to pick up the product with a better average price than they are giving it to the client to at the end of the horizon. they can do this by filling it from inventory or other trading, at the end of day their profit (or loss) from this activity id the difference between their cost and the guaranteed price to the client.
>>1070639
>places like citadel may have an HFT arm but its not part of their hedge fund portfolio
there is good reason for that, HFT strategies, marketmaking only requires limited capital and provides quite large % returns - no point taking on client funds when you can run the whole operation with proprietary capital and keep all the pnl yourself
IMC, Optiver, Jane Street all make good returns simply from proprietary capital and pay out most of it to directors, employees etc.. as they've got no need to reinvest much
>>1069073
Because technical analysis is a fucking joke. So is FA. People in this thread and OP are huge faggots. Unless you're account is in the 500k+ range, trying to day trade is a complete waste of time. Go out and make some real money first you cucks
>>1070814
yep exactly, glad someone here gets it
to the person who keeps pasting the same papers covering amateur daytraders and then extrapolating from that that therefore all intraday trading is down to luck (despite the existence of successful firms consistently trading huge volume intraday)
http://faculty.chicagobooth.edu/john.cochrane/teaching/35150_advanced_investments/baron_brogaard_kirilenko.pdf
>Abstract: We examine the profitability of high frequency traders (HFTs). Using transaction level data
with user identifications, we find that high frequency trading (HFT) is highly profitable: HFTs
collectively earn over $23 million in trading profits in the E-mini S&P 500 futures contract during the
month of August 2010. The profits of HFTs are mainly derived from Opportunistic traders, but also
from Fundamental (institutional) traders, Small (retail) traders, and Non-HFT Market Makers. While
HFTs bear some risk, they generate unusually high average Sharpe ratios with a median of 4.5 across
firms in August 2010. Finally, HFTs profits are persistent, new entrants have a higher propensity to
underperform and exit, and the fastest firms (in absolute and in relative terms) earn the highest profits.
what should I do if I want to trade and invest in stocks or whatever and be a multi millionaire? please help me /biz/
>>1070851
buy a book on value investing
or
get a job in the industry in a trading related role
>>1070845
HFT and day trading aren't the same thing. You've just proven that an apple is not an orange. Congrats.
Have anything to add to the discussion of day trading?
>>1070903
erm yup - I've posted earlier:
>>1070530
as for HFT not being daytrading that depends on what you want to define as daytrading
at a wider level any positions not held overnight = daytrading
if you're merely referring to the amateurs who deposit some cash at various equity brokerages offering rented desks, leased lines etc.. in the US then most of them will lose and of the people who do win quite a large portion of them may only do so for a short period as a result of mostly luck
on the other hand - in the previous thread, there was a poster (presumably you) shitposting with the same pasted replies in response to the existence of firms like rentech, IMC, optiver etc..
there are various shades of gray here... from the likes of rentech with a clear edge in the markets through to the amateur punter - to dismiss all intraday trading is naive
>>1068984
Idiot who knows nothing about statistics compares investing with the lottery.
They need mandatory statistics training in high school.....I can't even deal with retards like this anymore....
>>1069192
ah it is you...
fact is propfirms involved in HFT do throw a spanner in the 'luck' argument - they're clear evidence of people making consistent returns from intraday strategies
>>1069192
>academic
>economics
Lol pseudo-science bullshit. I made 350k swing trading in 2015. I'm 22. Market efficiency theory is fucking bullshit. One word. Bubble.
>>1070985
Suuuure ya did bud
>>1070985
>I made 350k swing trading in 2015
Please post proof. Thanks!
>>1069929
>congrats. you make less than most people who go to work for a living, and you don't get health insurance.
Unless you work at a minimum wage job.
>>1071007
Regardless of whether I made a large amount trading, most economics papers are pseudo-science at best, pure quackery at worst. I know, financial economics major here. Believe what you want.
>>1068801
Because 99% of them won't make any net capital gains in the long run.
Just like a gambler won't withdraw when he's making bank.
>>1071005
I've not change any goalposts - my post is pretty clear about each area I'm referring to if you bother to read:
>>1070530
I mentioned these propfirms in the previous thread and you dismissed them with your inane copied and pasted replies which some janitor/mod eventually had to delete
so just to be clear - are you only referring to the amateurs who put down some cash at some equities brokerage?
>>1071035
>I've not change any goalposts
Yes you have. Every time you get presented with irrefutable academic evidence about the futility of day trading, you change your argument. It's obvious and pathetic.
>propfirms
Not that anon, but let's be very clear about prop firms since they generally engage in a variety of trading activity. To the extent that they engage in day trading, 95% of them fail to beat index benchmarks, after costs. This is established fact. You've been asked repeatedly to demonstrate otherwise, and have failed to do so. At this point, the argument is over. Day trading is a failed strategy.
In addition to day trading, many prop firms (the larger ones, and the ones that tend to survive) also engage in other activities such as market making, liquidity services, algorithmic trading including HFT, and front-running (both legal and illegal). These activities -- none of which are day trading -- do tend to generate profit.
So if you want to discuss prop firms like a broken record, you're going to have to be clear about which of their activities we're talking about. It's well established that their non-day-trading activities are profitable. Therefore unless you can demonstrate specifically that the day trading activities conducted at these prop firms are, themselves, profitable, then you have no argument at all.
>are you only referring to the amateurs
There's no difference. Day trading is day trading. And day trading is not HFT, market making, algo trading, front-running, etc. Stop changing the definitions, and stop moving the goal posts.
Why do you think we've been asking you to post some proof -- any proof -- that day trading is more profitable than indexing?
And why is it that after more than 24 hours you've posted nothing at all?
>>1071060
>Yes you have.
where - point out where I've changed my argument - my post I highlighted to you ought to be self explanatory re: my position on this subject
>>1070530
>To the extent that they engage in day trading, 95% of them fail to beat index benchmarks, after costs. This is established fact. You've been asked repeatedly to demonstrate otherwise, and have failed to do so.
no I haven't I've given examples of successful prop firms and given you a paper you crave...
are you actually referring to prop firms - i.e. those firms engaging in proprietary trading or are you referring to brokerages that allow clients to deposit their own funds?
>There's no difference. Day trading is day trading. And day trading is not HFT, market making, algo trading, front-running, etc. Stop changing the definitions, and stop moving the goal posts.
no one is moving any goalposts here - my previous post I highlighted for you gave a clear explanation of my position on the matter - I've asked you a simple question - are you refering to the amatures in the various equities brokerages across the US renting desks when you refer to daytrading
I've already pointed out that daytrading can encompass any trades not held overnight and I've been completely clear with my views on the various agents involved in intraday trading
>>1071060
>Therefore unless you can demonstrate specifically that the day trading activities conducted at these prop firms are, themselves, profitable, then you have no argument at all.
first you need to clarify what you're refering to by daytrading - the fact that optiver, liquid capital, mako, IMC etc.. are profitable is public record... most of what they do is marketmaking, liquidity provision - quite a lot of if is highfrequency these days though not all for all of those firms...
I worked at one of those firms, I've actually got experience in this industry.
I think you're confusing cheap equtities brokerages that allow people to deposit funds with prop firms... they sometimes use that name but it is incorrect really - a 'proprietary trading firm' is one that uses its own capital
>>1071073
>>1071081
Once again, you collapse all prop firm activities into one lump as if they were the same thing.
Beyond your wall of text, you're just an ignorant kid with no understanding of how these firms actually work.
Faced with actual science, you flee into logical fallacies and rhetorical games. Unfortunately for you, there are people here who are too smart to let you get away with that kind of sophistry.
So do you have any actual evidence that day trading (and only day trading) is more profitable than indexing? It's a yes or no question.
>>1071088
I'm going to have to ask you again... what are you personally referring to when you talk about 'daytrading'?
>>1071091
I mean you've ruled out liquidity provision, HFT, marketmaking...
so what do you personally mean by 'daytrading'?
The physiological effects of watching your daytrade go down in value, in real time, are uniquely excruciating. You will start to shake, your heart rate will increase, you will start to sweat. You will feel itchy, have racing thoughts, paranoia, and the only remedy is either watching your position go up, or selling at a loss.
It is not worth it. I never made any money day trading. But I've made plenty of money investing.
>>1071091
>>1071094
Please stop serial posting for attention, kid. Gather your thoughts and put some effort into your posts.
If we need to set the definition of day trading in order to prevent you from changing it later, then let's go with the SEC's phrasing:
http://www.sec.gov/answers/daytrading.htm
And yes, we do exclude market-making, algo trading (including HFT), and front-running because the profit generator in these forms of intra-day activities is separate from the trading decision itself. I don't know of any agency or reputable academic that defines "day trading" to include any of these activities.
So once again, the ball is in your court. Do you have any evidence that day trading is more profitable than indexing? It's a straight-forward question, kid. I'm not trying to trick you. Just answer it.
>>1071098
>If we need to set the definition of day trading in order to prevent you from changing it later, then let's go with the SEC's phrasing:
that phrasing includes HFT, marketmaking, liquidity provision...
>>1071100
Ah, here we go again. You can't argue the facts, so you want to argue the definition instead.
You're a pathetic child, throwing a tantrum.
Come back when and if you want to have an adult discussion.
>>1071098
>Do you have any evidence that day trading is more profitable than indexing? It's a straight-forward question, kid. I'm not trying to trick you. Just answer it.
it depends what you mean by daytrading, you've not clarified what you're personally refering to - I've already given my answer to the question in general with comments on various areas here:
>>1070530
the papers you've linked to so far seem to have looked at amateur punters... I've not at any point advocated that they're likely to be profitable at all let alone beat any index
>>1071103
I've been quite reasonable actually - you're the one throwing around ad hominems and refusing to clarify your position
I've quite clearly laid out my position on the matter in an earlier post which I've now pointed out to you several times - all you've done in response to the last few posts is post memes and insults
perhaps you could clarify your position, in particular what you're referring to as 'daytrading' if you want an 'adult discussion'
>>1071105
More definition games? Do you think you're fooling anyone?
You've lost the argument and retreated onto the low road. Quite sad for someone who claims to be a former day trader. You'd think you'd know the difference between day trading and HFT, for example. I guess these prop firms will hire anyone. LMFAO.
>>1071103
I'd also point out that on the subject of moving goalposts you were, in the previous thread, using your luck argument and copying and pasting the same reply in a childish manner in response to examples such as HFT hedge fund rentech and options marketmaking & HFT prop firm optiver etc..
now it seems you're accepting that HFT, market making etc.. can be profitable
>>1071114
oh look another meme and an ad hominems
you'd think you could simply explain your position on the matter
by daytrading you're referring to the amature punters manually clicking buy/sell at a brokerage where they rent a desk right? Just explain your position clearly, it shouldn't be too hard.
I've been quite clear about my position re: those people - why is it so hard for you?
>>1071117
>you're accepting that HFT, market making etc.. can be profitable
I never claimed otherwise. If you have a quote you'd like to post to prove I'm a liar, please feel free.
My position remains the same that it always has been: day trading is less profitable than indexing.
See, that's called a simple, direct statement, which I've supported with scientific and academic evidence. Sure would be nice if you did the same. Instead, we get definition games, shifting arguments, and personal attacks.
So once again, the ball is in your court. Do you have any evidence that day trading is more profitable than indexing? It's a straight-forward question, kid. I'm not trying to trick you. Just answer it.
>>1071124
>Do you have any evidence that day trading is more profitable than indexing? It's a straight-forward question, kid. I'm not trying to trick you. Just answer it.
Depends what you mean by daytrading?
I'm not trying to trick you either - I want you to explain what you mean... I can't answer your question unless you clarify it... I've been quite clear on my opinion re: different intraday trading activities too
>>1071124
>Instead, we get definition games, shifting arguments, and personal attacks.
point out where I've shifted my argument? Here it is again for you:
>>1070530
do you require any clarification on it? Are you going to be clearer about what you're arguing for, in particular, what you're referring to as 'daytrading'?
>>1071133
>point out where I've shifted my argument
You've tried to call HFT day trading.
You've tried to call market making day trading.
You've tried to call algo trading day trading.
You've tried to call front running day trading.
You've tried to call all prop firm activity day trading.
You've tried claiming all prop firms are profitable.
You've tried every argument under the sun, EXCEPT the argument that day trading is more profitable than indexing.
You asked me to define "day trading" for you, and I did. Then you tried changing the definition and moving the goal posts. Now you just spam post claiming that you dindu nuffin.
This is pathetic. Using the definition that I gave you (>>1071098) AS YOU REQUESTED, do you have any evidence that day trading is more profitable than indexing?
>>1071143
that ins't clear - the SEC's definition includes all of those activities you're trying to exclude
I'm asking what you're referring to?
Are you just talking about guys who rent a desk at some US equities brokerage and point and click with their mouse in order to buy/sell within a short timeframe?
>>1071153
>definition includes all of those activities you're trying to exclude
No it doesn't. What part of "exclude market-making, algo trading (including HFT), and front-running" do you not understand?
Stop with the definition games. Stop with the dindu nuffin. Stop with the deflection. This is boring and pointless. I'll not give you the attention you so desperately crave unless the discussions gets back on an adult level.
You have the definition. You have the question. Now answer it.
>>1071164
you're still avoiding the question
the SEC definition clearly includes all intraday trading activities - so I'm asking you what you mean by 'daytrading'
I'll help you out - perhaps you can answer this question instead:
Are you just talking about guys who rent a desk at some US equities brokerage and point and click with their mouse in order to buy/sell within a short timeframe?
Bottom line is - if you're unable to explain what you're asking then how can you expect anyone to answer?
>>1071167
He's a time waster anon, yes he's talking about those people.
>>1071176
well in that case no, I've not advocated for them and you're unlikely to find any scientific papers showing that amature punters involved in that game will likely beat any index... though I've said that they'll mostly lose from the start...
Trading is 90% psychology only 10% strategy.
Most traders focus 100% on strategy which is why they fail.
>>1068801
You're just buying stocks that jump from profitable to non-profitable in a matter of seconds.
Long-term investments are the key.
>>1071060
>95% of them fail to beat index benchmarks, after costs
Prove it without linking to a twenty year old study done in thailand with an incredibly small sample size.
>>1071332
>Prove it without linking to a twenty year old study
You're not very smart, huh? I already posted a 2012 study. Go read it.
>with an incredibly small sample size
You're not very smart, huh? I already posted a study that looked at 15 years of day-trading data and over 3.7 billion transactions. Go read it.
Kek. This thread is hilarious. Watching the day trading advocates shift and bob and dodge and duck and dive. Too fun.
>>1071212
This. My statistics methods were dogshit, because robust useful stats take teams of people to run. Basically follow the market makers. Easy enough when you observe the supply/demand style of trading they do.
>>1071357
Oh look an index fag making 7% a year. You enjoying making $20 a year?
>>1071176
>yes he's talking about those people
Don't put words in my mouth. You're not smart enough.
I'm talking about anyone who is doing day trading, whether in their mom's basement, a rented desk, or a prop firm. There is no difference between any of them, according to all published evidence.
>>1071357
>billion dollar firms pay thousands of individuals seven figure salaries to "just get lucky" all day
Yep, it checks out!
>>1071366
You can't reason with index fags. They will hold onto their shitty funds come hell or high water. "The market always goes up in the long run" Ya Sven, that is if you have the discipline to hold for 50 years and make $20 a year in the meantime while the pro traders make $300 every 30 minutes.
>>1071332
he's probably right with respect to the guys pointing and clicking with a mouse...
the vast majority of them will lose and a large portion of the small % of winners will be lucky
you're unlikely to find any evidence that those guys have any sort of edge, I wouldn't rule out the possibility completely - there are various ways you can make money in the markets but largely it is correct
problem is the poster you're arguing with is more than a bit difficult, likes his grandstanding and refused to even clarify his position when asked...
>>1071369
Idiots like that fail to note that in ANY industry only a small portion of overall contenders "make it" In other words the trend in trading is virtually the same across all entrepreneurial lines. The reason people fail in trading is not knowing enough mathematics, relying too much on what they learned in school, and not being innovative enough. All imo senpai.
>>1071365
well answer the question then re: what exactly constitutes day trading in your opinion
the SEC definition you've cited to is broad and includes all intraday trading - it doesn't separate automated approaches or semi automated approaches from manual approaches... yet after repeatedly being asked you've refused to answer or clarify what you're asking
>>1071368
>$300 every 30 minutes
>>1071379
Literally average for pro traders leveraging at billion dollar hedge funds. btfo
>>1071379
He thinks $300 is a lot of money. Wew lad
>>1071383
$600 an hour is pretty decent.
>>1071375
>The reason people fail in trading is not knowing enough mathematics, relying too much on what they learned in school, and not being innovative enough. All imo senpai.
>>1071380
>Literally average for pro traders leveraging at billion dollar hedge funds.
The loonies have arrived, here to drive out all civil and intelligent discussion. Commence with the comedy.
>>1071388
>civil and intelligent discussion
>>1071388
Ad hominem fag doesn't offer counter argument proofs.
>>1071384
yup, he's unwilling to engage in actual discussion, he just wants to grandstand a bit....
>>1071388
>The loonies have arrived
Ad hominem detected, everything you now say is invalid as you have failed to abide by the laws or argumentation
Thank you and have good day sir. Enjoy that 3%. I have two hundreds units of mazda motorcorp I purchased 12 hours ago that I need to sell :^)
>>1071365
You're avoiding answering the question and I'm the stupid one? Kek
>>1071376
You had your chance, kid. You asked for the definition, and I gave it to you. You just didn't like it because I excluded HFT, market-making, and front-running ... none of which any reasonable person would consider day trading.
Now the morons have arrived to shit up the thread with their indexing memes and lies about profitability. Now its too late, and you failed to win the argument once again.
See you next thread, Mr. Former Prop Trader who doesn't even know how prop firms make their money. It was fun (again) taking you to the woodshed.
To summarize, in closing:
1 All existing evidence proves that day trading is a suboptimal strategy compared to indexing.
2. Day trading success, rare as it may be, is entirely due to luck.
3. Day trading returns do not justify the incremental risks associated with the strategy, making it a poor economic decision.
/thread
>>1071405
Autism or denial?
>>1071405
you've not given a definition - you've linked to the SEC definition which is broad and includes anything intraday
you've then contradicted this by stating that you're excluding HFT, marketmaking etc..
so I'm asking you to explain, in your own words, what you're referring to as 'daytrading'?
you've avoided answering the question repeatedly... does your definition include automated strategies or not for example?
>>1071407
bit of both... he's been asked several times, all he needed to do was communicate clearly what he was including within 'daytrading' and I'd have been able to answer his question a while back... instead he just carried on with the ad hominems/silly pictures etc...
