Trading Day Trading: Shares

Couldnt find a thread dedicated to this, so here it goes

ok, im far from an expert, recently ive met a few people making a living off daytrading, namely forex,

these guys were young, ambitious but not greedy, eg one guy was making anywhere up to $100 per day (yes its not much money, however he had only been doing it for 1 year plus 1 year on paper) and his technical knowledge was amazing,

anyway, ignoring greed, unreasonable expectations, I too am looking at doing day trading, obviously am prepared to put in the hours and the time zones, obviously not expecting to be gordon geckon by 2016,

but is there any guys on here doing this making a decent living. I too wouldnt mind doing this full time.

 

Im not seeing much upside here. You are proposing to sit in front of a screen all day and night perhaps for up to $100 per day with apparently no skillset or specialised expertise?

 

Nah, not day trading as such. But I am using ASX options and it has been handy to pay for all groceries, beer and fuel for the last 6 months. Just had a look, completed 15 trades in the 10 weeks of this financial year. Use a full service broker who comes up with the ideas and I yeah or neigh them. Works in well with my day job.

 

I knew a day trader once who was obssessed with it - lost his house and marriage.

So, he has all this fantastic knowledge, and is making "up to" $100 per day.....

How long is he spending per day at this?

 

From my simple experience,the ones that make the money are the traders that wait for rare but consequential shocks and jumps in the small market areas that they follow ,one may target Australian Banks,Australian miners ect,, and look for wide sudden large deviations ,CBA a short while ago was in the $95..range a simple offer came along, all eligible stakeholders shareholders could have purchased one new share for every 23 shares already held, at a discounted offer price of $71.50 per share,now if you study the price change of what happened next the CBA price went into the mid and below 75$$$ mark so what traders think is sometimes normal is irrelevant because if you made a simple chart on the large deviations in that one listed high end bank,you would have made more then 100 bucks a day "IF" one sold in the 90$$ and bought back in in the low 70$$,all media share gurus focuses on the "normal,"trends
but they never look for the outside oneliners when you look back are that easy to see,if you know what to look for..imho..

 

@TMNT

One of the forum member(not sure of username or name ) trades up to $2 million a day!

 

Day trading is not as easy as that group makes it out to be. Ask yourself why are they not trading more if they are so successful? The truth is that it is not easy to do.
To illustrate :

Its like seeing a doctor operate and he/she gets paid a lot for it. You then say I can do this, so you go and for a year you read all the books on operating then you do small procedures which most of the time work out, but then you get a patient that dies on your watch and you get sued and loose everything. What you didn't factor in is that best traders spend years and years trading and loosing and then loosing some more before they become successful. You will also see that most of them do it for the challenge or because they love it and not to have a bit of extra cash.

I'm not trying to discourage you from it, its just that its not as easy as that group of people make it out to be. as a first point of contact go to www.babypips.com. Do their school and you will realise yourself that it is not as easy as your friends make it out to be.

I hope I'm wrong...and that you make a lot of money from it! Then you can share it with us

FX is known as "fast money"... easy come - easy go.... I started in FX, then moved to stocks and now trading indecies. I trade them because it suits my style. So find what works for you and please, please, please don't rely on trading systems! Learn how price action/volume works.

 

Unless I am mistaken a lot of trading is about risk mitigation.

You will lose as many trades as you win (if not more?). Its being able to minimise the losses on these and make enough profit on the winners to cover the losers.

But I wouldnt know

Blacky

 

my understanding from chatting with various people who do it , is

you put in stops/ limits so that if your trade goes in teh wrong direction, your losses are minimal,
same goes for the profit, you might put 10% limit on profit and loss, and your aim is to make small gains everytime in a short period, and not large ones,
and that your trades are based on primarily technical analysis using trends, graphs, slopes, etc.etc.

and your aim is to make a couple of % per week, which might not seen much but over a year its pretty big

 

A couple of percent a week on your entire account? Thats a huge return. Think about it. If its 2% a week compound, its roughly 180% per annum.

I would be very surprised if people could do that consistently

 

Stops and Limits can only work if you are using Direct Market brokers and not Market Maker brokers. These days most are Market Maker brokers as their commissions are smaller. Where as Market Makers build in commission into their spread. They also tend to hunt stop losses.

@Hosko there is nothing wrong with doing what you are doing. I think its great if you can make half of your salary. What you are doing is better than what 90% of traders can achieve.
I would love to learn more as to what you are doing to achieve that.

As I said previously, I dont want to discourage anyone from it. I think the more people do it the better it is. But also people need to be realistic. As @Blacky mentioned, trading is about managing risk. I also said this in my other thread.

The only reason casinos operate are because they have the edge on all games. Even if that edge is only 1%. That means that in the long run you will loose. You might have a winning streak but eventually you will loose it all. Another reason why casinos don't have any clocks around.

So if anyone has ideas on what to trade today please share them

 

I spent several years trading for a living. Most depressing, boring and alienating time of my life. I have found very few traders are consistently profitable though both bull and bear markets over many years. A lot of money to be made in selling the dream though.

 

Probably the most critical point in this thread so far (IMO). Different investing styles can work better/worse depending on the individual and the same goes for trading styles.

If you want to go with forex make sure you are completely tuned into the risks. What will your broker do in the event of a large move such as the one seen earlier in the year with the Swiss peg?

http://leaprate.com/2015/01/fxcm-letter-to-clients-to-repay-negative-balances/
http://www.forexcrunch.com/snbomb-reactions-from-10-forex-brokers/

Assad seems like a very switched on trader, would take a look over his work for some ideas:

http://www.asenna.com.au/asenna/node/34842
https://twitter.com/AsennaWealth

 

Good to see an honest reply, thanks.
When you think of it, it's not a very productive and personal growth activity, unless you are an absolute wizard and innovator of breakthrough trading techniques, raking in mils annually.

 

So true! It is very depressing profession. Which is why I progressed from day trading to short term trading to long term trading. Results are better when doing long term trading, but could never get there if I didn't experience day trading.

 

I remember the younger, more insolent version of me laughing at the axiom "there are old traders, there are bold traders. there are no old bold traders" how true this cliche turned out to be.

 

That's my exact experience too - day trading FX sucked the life out of me, but I needed to experience that to realise long term trading is much better suited to my personality. Now I'm far too busy to day trade, but would like to create a semi-automated short term (1hr) FX system when I find a spare moment.

 

@Mal Gordon, I remember those days too! Lucky I'm not old yet and not bold either. My first trade was a loss of $1572. Still remember it. I was over 10 years ago. Commsec used to settle the trades within I think 48 hours. So if you bought and sold within that period they will only look at the difference. The problem for me was that it was a loss of $1572. Thats when I thought If I lost that money in space of hours that means some one else made it in space of hours. That's when I went about learning as much as I can. It took me 4 years to get my money back!!! This was back in Uni days when I had very lil in my bank account.

@Jess Peletier RESIST THE URGE JESS!!! I know because I still have those same feelings..."ohhh just a $1000 here and just a $1000 there. After few losses I realise that best to stick with what works. Discipline after money management is second most important rule in day trading?

 

I'd say discipline is the most important, or your money management will be out the window
I was working on a 1 Hr FX system before I burnt out, I'd love to revisit it but I don't have the time to backtest it anymore. I'm not trading at all at the moment as I've been focusing on other things but think I'd like to start again, more for investment though. I have a couple of legacy trades that were in profit when I stopped, that I've let run and they're the best earners I've ever had! (outside property, that is!)