Most American guys reading sites like this long ago realized the best women are no longer found at home. Therefore, living overseas and supporting oneself via a remote work gig is understandably the next thing on a young man’s mind.
However, more important than deciding where is deciding what the best way to support a lifestyle in an ideal location. While some bloggers and writers earn a decent living via their skills, not everyone is handy with the written word. Even if you are, unless you have thousands of social media followers, blogging probably won’t pay you what think it can, and nowadays your first e-book usually won’t generate a lot of money.
Hell, they often don’t generate anything even for established authors. So what other internet-based options are out there for the would-be remote worker with a serious independence streak?
This will not be you.
In terms of working remotely, day trading seems appealing. There’s no boss, no commute, no office, tons of information about how to trade and if you’re already a news junkie and into the markets, it fits right in with what you pay attention to—so why not do it?
Not so fast.
Is it possible?
The short answer is yes, it’s possible to make a living day trading. The big picture is that it takes time to get there. Imagine having no experience playing a musical instrument, going to the music store, buying a guitar with all the right equipment, and then tomorrow trying to start earning a living as a musician.
Likewise, if you have zero experience day trading and think all you need is a brokerage account with some seed capital, a laptop, and an Internet connection, you are essentially walking on stage with a Stratocaster and expecting to play like Jimi Hendrix with zero preparation. Day trading isn’t a casino, you shouldn’t be in it for the excitement and it takes a serious commitment of time and study to develop a winning strategy. Ignore this warning at your financial peril.
How much money do I need?
Gurus with plans to sell will tell you that anyone can be a trader with a couple of thousand dollars. Realistically, your $2,000 eTrade account may be a fun distraction, but for serious day trading, you need the right brokers. If you plan to short sell penny stocks, only a couple of brokers will allow you to do this, the cheapest of which requires a $10k account to start.
The best broker out there that all the top individual traders use requires $50k to start. Still ready to do this? Bring along your discipline and learn before placing trades. Yes, you can practice with simulated trades too, but just as in poker, when the chips actually mean something, you WILL trade much differently—or at least you should.
Are there good teachers?
I’m not here to plug products or gurus, but I will say that most of them are full of hot air. That said, there are about three or four well known ones which, although their styles differ, can back up all of their trades. Those guys have all busted their ass to get where they are and actually walk the walk.
But keep a few things in mind if you’re shopping around for a course. First, if they can’t back up their trades, they’re not worth the oxygen they’re stealing from you as they speak. Plenty of bozos are out there selling books, videos, plans, and programs about how big a millionaire their system will make you, but unless they’ve got verifiable trades (and the good ones will) forget them.
Even if they can back up their trades, you still need to be skeptical. If someone has a success record of more than 75% winning trades, walk away—any “proof” provided will be bullshit. The best day traders out there do not go through life winning all their trades, and anybody who shows you stats with near-perfect records is a delusional liar.
That said, don’t be automatically dismissive of people with a low win rate either. Plenty of profitable traders have closer to a 30-40% win rate, but because their wins are so much greater than their losses they still make money. Great traders learn to cut losses quickly the minute the trade goes against their plan. When it comes to any guru, do your homework, read reviews, try to find people who followed them and actually made money.
Who should do it?
The best candidates for day trading are those with the time to devote to learning the craft. If you have a regular job, transitioning to a full time trader lifestyle will be very difficult since you’re probably at work when the market is open. It’s no surprise most of the guys getting into trading are young, often in college or out for summer break and have both the time and lack of obligations enabling them to study and practice their trading.
The last thing you need is pressure to perform as a brand new trader. If you’re unemployed with a mortgage and have a family to feed, for heavens sake, do not take out a HELOC to finance your “career change” as there will be far too much pressure, causing you to force trades and lose. The fewer burdens on your mind when you get into it, the better your chances of success.
Why not do it?
Forget the laptop – most good day traders need something like this.
There are a gazillion reasons not to do it. I’ll also add that part-time trading more than likely won’t support you even if you are good at it. Forget the idea of laptop trading on a beach with an umbrella drink in your hand; this is solitary, difficult, intense and anti-social work. The best traders are full-time, full-system, full-focus.
If you aren’t prepared to put in the time to learn, fail repeatedly and get back up again, then stick to mutual funds and investing (which is not trading!).
Finally, don’t forget your whole motivation for trying to get into day trading—to work remotely and independently. Assuming you’ll be trading the US markets, where you decide to locate will influence how convenient the lifestyle is for you. If you like the women of South East Asia, not only may you have a difficult time finding a solid and reliable Internet connection, but you’ll also be up in the middle of the night trying to participate in the New York markets when you’d rather be gaming the women you moved there to pursue.
Europe is much better time zone-wise, but even then your early evenings may be taken up with late day trades instead of dates. Also bear in mind that successful traders don’t stop working when the closing bell rings, they’re researching and running scans and trade setups for the next day. As for connectivity and time zones anywhere else on the planet, it’s too often a crapshoot—your broadband connection and availability during market hours are vital to your ability to execute trades.
Not really the best choice for independent men
In the end I do not recommend day trading as a profession for someone looking to start an internet-based business. The chances are far too great it will end in disaster for the novice trader. Unless you are already a consistently successful trader with an edge and a working system you’ve developed, pulling up stakes and expecting to master a craft in a matter of weeks or months in a foreign land will only make you go broke even faster.
Most men looking to step out with a location-independent business are better served spending their time and money learning some other occupationally mobile skill. And for Pete’s sake, save your eyesight for looking at beautiful women rather than green and red dots on a screen all day.
On top of this it doesn’t really create anything of use either.
Not much different to gambling on horses for a living. Which is also pretty volatile.
You have no idea if your horse is injured or half-drugged or whatever. And likewise, there are variables in the markets a guy and his laptop can’t possibly know
Yes there are, but that’s why it’s expensive. A good analytics service will be able to monitor enough market activity to do its own quantitative analysis and summarize the results in graphical format for you. Again, not cheap. The cheapest one I’ve seen is a guy who charges 5 grand for the service or alternatively he trains you for free in exchange for 1/4 of your profits.
Also your statements about ” a guy and his laptop” is only partially correct. Even entire, professional Asset Management teams(complete with equity research departments) can’t possibly know everything in the market.
There are some interesting developments on the horizon though:
http://princetoneconomicsintl.com/socrates-explained/
It’s close to a zero sum game in many instances.
Even a guy armed with a few thousands $ worth of kit is at a structural disadvantage.
a huge disadvantage. here’s why day trading as an avg joe is completely fucking stupid.
would you play kobe bryant 1 on 1 for your life? no? why the fuck would anyone try to do the same thing with their money then? the “experts” lose people shit tons of money so people that think they can find the magic picks as an avg joe is beyond delusional.
“On top of this it doesn’t really create anything of use either.”
This is exactly what pisses me off to no end. Idiots like you saying stupid things without thinking…
Let me ask you this question… Who does what is called price discovery? Who provides liquidity so you can have a market? Do you have any understanding what that is? Who sets the price for the raw materials your day to day goods are made of? Who does that? Better question is who do you want to do that? Obama or better yet some Polit Bureau comitee? When a farmer wants to sell his futures contract, who is on the other side to buy it and thus asuming the risk? The large and small traders are at the core of what you superficially call “market economy”. Without them there would be no markets and by extension no capitalism to speak of …
Think before you talk.
I understand economics perfectly.
Price is determined largely by demand and production. Day traders and other parasites pushing for a quick buck do more to distort the market than refine prices to real market value.
I bet cocksuckers like you bet on the western real estate boom
You have no clue what you are talking about. Just take your drivel elsewhere.
And if you’re talking about market distortions look no further than your beloved FED.
“I bet cocksuckers like you bet on the western real estate boom”
Next to the fact that your are an idiot, you also have an attitude. Piss off wanker. You are not even the dirt on the back of my shoes.
Yeah you’re right.
Keep producing Bro
Beloved FED? Haha
I’m a small government Tory, you dick
Aye, and cocksuckers like him think that that slut just sucked the herpes right off his weenie because he’s such a captain of industry (and not because of the high grade coca, eh)
That’s not dirt, lackey, that’s the shit you took when you heard about the regulators investigating and realised you probably will take the fall for your loyal boss and friends.
What is bothering you so badly son? You got shafted by the market? It’s ok boy. You can always go and shovel shit for a living..
He’s probably a kid who watched Wall St but got sent to bed an hour in
I find it silly to think that if we didn’t have day traders (and for most of financial history, we didn’t) that we wouldn’t have a functioning stock market.
Funny thing is we don’t have a functioning stock market as we speak but that’s a different discussion. Just fyi. we’re all sitting on a financial nuclear bomb right now..
It’s silly indeed. A simple search would reveal this article on NY Times.. I wouldn’t post it here if it weren’t for NY times.. And we’re talking 1988 so anyway believe what you want..
http://www.nytimes.com/1988/08/15/business/market-place-pervasive-impact-of-day-traders.html
The average person does not understand without traders, the “buy and hold” crowd or “buy and hope” as I like to call it could not exist. Do you think that those who buy and sit for a few years could have any sort of liquidity or chance if traders were not holding up a stock without news to push it forward?
Of course that financial nuke (you pussies love the martial analogy, eh fuckwad) was created by financial Einsteins, Fermes and Oppenheimers, right?
You crack me up. Thanks for the laugh.
Asscrack. You. Get fucked, moneygrubber.
Yes, you’re right. I do have my retirement savings in the stock market, because, really, what other option is there? Paying down debt, but then what? It is absolutely a con game for suckers. But I don’t know anything better to invest in. I go index funds and energy, because the big Fortune 500 firms aren’t going anywhere and everyone needs energy, but these are all overpriced and pumped up with fake fed money.
The implosion of the Market will be epic. Listen, we will wake up one morning and there will be no Market. That’s how bad it’s going to be… S&P open 2K points down kind of thing. I know what you’re saying, and I don’t know what to tell you. We’re way passed the point of no return.
Bullshit, you slogan spouting assclown.
You dumbasses don’t want to understand that Karl Marx and Rockefeller/Morgan/Carnegie, et al are two sides of the same wooden nickle.
It doesn’t matter. If you can’t beat them, join them. Muppets like you will forever be fucked. Enjoy.
Tell it to your ma, asshat.
Tell it to my ma, huh? Dude, I dealt with assholes like you all my life. Why don’t you try something spicier see if that works better kiddo lol
Of course you didn’t deal with “dudes” your whole life, snotnose.
Certainly not with men like myself, or your ass would’ve been kicked so profoundly and repeatedly (not just physically, either), that instead of the confirmed moneygrubbing pussywipe that you are, you might”ve had a chance to actually have a decent life.
Into the valley, bitch.
Men like yourself….. LOLZ. You’re such a loser and you know it… It’s OK, this world is full of losers. Most are, so you go ahead and feel at home, allright?
Now it’s clear, you’re one of those female sucksex stories, right fuckhole?
Beat it.
Yep. It’s now clear to me. You tried your hand and you must be one of those who’s money is in my account now. Blow me!
Actually not, whore.
Actually not? You don’t wanna blow me? Tzt tzt tzt.. your loss.
Great answer, I bet your clit was actually relieved of the herpes burning sensation for a few seconds while you typed that stunning retort, penismunch.
Actually, you tried your hand but couldn’t get it up, so you had to suck some 2$ streetcorner tranny crack whore to lube his cock so he could properly sodomise your gaping, cavernous rectum.
Day trading: A crappy video game where you lose all your real life shit.
biggest problem with day trading is under capitalization… you need hundreds of thousands… small accounts are for losers… you want to burn $10k.. go to Vegas…. good prop traders carry $100k per day losses without a sweat… you need $100-200k to live on for a year or two, and you can’t live on a shoe string in this business… you need relaxing facilities, good food, etc…. and $1M in an account…. and huge learning curve…. huge… I’ve taken $100k in a month… can be done….
I’ll take it the other way around. A 100K account will not make you a trader, and it’s not even a prerequisite. One can lose 100K just as easily as 10K.. Take 5K and make it 100K. Only then maybe you are a trader.
Just like you did.
at least XBOX rewards you with gamer points.
Best trading is to find a long term trend and go with it. Very profitable, doesnt consume your time , and no need to jump in and out.. oh and way less stress?
Until the swiss franc drops 30% in a few minutes. Risk is always there
Index funds are vastly superior to day trading. All traders who say they are capable of ‘beating the market’ are full of shit. You’ll find all sorts of people in Wall Street who say they’ve beaten the market for years but somehow when it actually comes time to disclose earnings all the grandiose claims vaporize. Don’t get suckered into the fool’s game.
On the other hand, index funds are some of the best investments you could make, superior to virtually any other kind of investment (buying a house, investing in startups, etc.) except maybe investing in your own business. If the average American simply went to their day job, invested in index funds, and did literally nothing else, they’d be a multimillionaire by retirement at 62. Show me a day trader that can do better.
tl:dr = a bullshit industry full of con men, run by con men. Stay away, and get a real job.
Long personal story:
I
would say anyone who chooses “day-trading” as a “career” is an idiot,
and has proven it with that choice. Most “day-traders” last a year or
two at most before they lose their money and “quit” (slink off back to a
McJob, in shame).
I used to be a full time trader, for 8 years. I
got away from it because I got sick of spending 18 hours a day on the
internet. And because I came to feel that this kind of economically
useless activity was damaging to society as a whole, as it produces
nothing of real value, and the entire “industry” is one big fraud
designed to part the sheeple from their money so that 0.1% Squidmen
Banksters can rob you coming, going, and in between too.
Today
it is even worse, with the rise of HFT – High frequency trading –
computer programs that post thousands or millions of phony orders that
they cancel a split second later, to manipulate the price and screw you
over. HFT makes up around 75% or so of all “trades” now on the big
Exchanges, and with the algorithmic trading programs in use by every big
trader and Fund, there are almost no humans left in the loop, and the
computers can buy and sell before you can type out an order and hit
‘enter’, and screw you on the spread too (the difference between the
“price” you see on your screen and what you actually get when you
execute an order, which oddly enough almost never seems to go in your
favor).
I left it about break-even, over 8+ years, though I did
‘profit’ enough to pay my living expenses over that time. I was rolling
with an average account balance of $500K, trading paper precious metals,
stocks, and later ForEx and futures. My account balance (Interactive
Brokers) varied from $200K low to $1200K high, and was about $450K when I
“retired”, ie got a real job.
I’d say it is bad for your health,
as you spend all day sitting in front of multiple screens, and all
night too – I traded e-mini overnight futures, and ForEx markets are
open all night… sleep becomes a luxury that you don’t feel like you
have time for. And in between trading I was reading trading sites and
economics sites and news sites and….a short day was 12-14 hours, and
that didn’t happen often.
Almost every “trading”: website is
bullshit, and those who claim they made this or that are usually lying,
and the whole “industry” is a fraudulent scam that just gets worse every
year. You might as well light your money on fire and enjoy the warmth,
IMHO.
The only website I can recommend (no personal/monetary
connection) where they actually talk sense and know what they are doing,
from my experience, out of thousands I used to have bookmarked:
http://evilspeculator.com/
But
you better be up on your higher maths, or you won’t even begin to
understand what the hell they are talking about. – extreme math warning.
Most of the traders there have account balances of $500K or more, a lot
much much more (or they are pro traders working at Funds etc) and
that’s what you realistically need. I see Interactive Brokers has
lowered their initial account requirements now, no doubt to get more
fish into the net, it’s $10K US and 100 previous trades experience, used
to be $50K when I was there, but to fully trade every market you need
more like $250K minimum – and that’s very likely not enough.
sorry about the formatting there, don’t know wassup with that
“High frequency trading –
computer programs that post thousands or millions of phony orders that
that they cancel a split second later, to manipulate the price and screw you
over”
Every economist from Smith to Marx to Friedman would spin in his fucking grave
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They only take you a fraction of a penny. Its nothing compared to the broker fees.As for the fake orders it is for those who use L2. LIke scalper. Scalping is dead because of that but daytrading is not dead. And it is not a 0 sum game because 0 sum game would mean example that it goes up 10% then finis the day at 0%. That is very rare, most of the time it will go up 10% then finish the day at 7%.
It’s like I said. One can spend 10 years trading and still not make it in the end.. I know you’ll probably get offended but I’ll say it anyway. Such equity swings tell me you had no risk/money management skills whatsoever and good for you to call it quits. As to the 18 hours days.. I agree, but that’s just for the first several years. These days, I only look at the charts for an hour or so, mostly around market open.. Anyway GL to you.
Says the guy who probably lost his shirt on a pump and dump. Day trading is 95% greed control, 5% technical analysis.
it’s gambling plain & simple and if you think there is no insider trading and you’re on equal footing as the rest of the rich at the top, you’re gullible.
Of course you’re not, but that doesn’t mean it’s not possible. The trading system I mentioned before used an algorithmic system that took Wall Street’s HVT systems into account and could reliably predict bumps and dips that they caused. There were some significant drawbacks though. First they don’t really tell you what happens moment to moment. While it can give you what’s going to happen in the next few minutes with probably 3/4 accuracy, trades can and will go against you during the short term. Secondly there’s a relatively low volume that you can trade before those systems detect your activity and react to wipe out your position.
how about the after hours trading most of us are not privy to ?
http://www.investopedia.com/ask/answers/04/061004.asp
Important to institution investors, but not day traders because day traders typically close their positions long before the exchanges close.
That’s why it’s called “intraday” trading.
so they have an advantage because they can manipulate the price for the next day ?
I tried this awhile back and got my technical skills fairly good, but
a forced career change pushed my risk tolerance so far down as to make
day trading stupid….not to mention that, in the words of the person
training me, “scared money never wins”.
I also ran into some
success stories in the military. There’s a few general rules of thumb.
For starters, you want to first identify a working strategy and then
stick with it consistently. What a lot of people don’t realize is that
you don’t need to win every trade. It’s like a coin toss game: If you
realize that a coin lands on a certain side let’s say….even 65% of the
time you can print money with that bet. In practice this is harder
than it sounds because trades can and will go against you in the short
term(relative to ticks, not time). A good example was when I entered an
overnight futures trade in the evening. It went $50 against me, and I
exited despite having five indicators in my favor. If I’d stuck with it
I would have been in the green when I went to bed and then I could have
set a stop order to protect my gains and woken up to $800 in my
account.
Another aspect is that you need to practice with fake
money for a MINIMUM of a year before you trade live. It sounds
ridiculous but it takes that long to develop the level of confidece in
your system that you need to be able to ride out a trade going against
you by hundreds of dollars when you enter during a bounce.
It
also goes without saying that you need the cash to spare. The military
success story I encountered was a FOREX trader who read up on the topic
before he deployed, practiced during the entire year of deployment and
some months back home, then he put some of his deployment savings into
the account. The dude didn’t sleep much during the next year because he
was trading the Asian markets but it was worth it: he made enough that
he was able to get a “conflict of interest” honorable discharge from the
military. The guy still trades and owns some massive and profitable
investments in green energy DPPs.
What most people don’t realize is that technical skills matter very little. Trading, be it day trading, swing trading, momentum trading, breakout trading, etc. is almost all about your mindset. The only real technical skills you need are that of a trading strategy and how to properly use it. The rest of it is all in your head, and thats why 90% of people who try their hand in this stuff fail within the first year. Any idiot can blindly place a trade and make money in the markets, the trick is to be able to make money consistently. On paper it all sounds very easy but anyone who’s actually done it knows it’s anything but.
This article is absolutely right about day trading though, fuck day trading.
I realize the topic was day trading, but perhaps other mediums such as technical swing trading (waiting for a swing) or short term trading (<30days) should have at least been mentioned as opportunities.
Yea it’s mostly a scam, I mean if you want to sit around at your computer for 12+ hours a day looking at charts and numbers then taking guesses then be my guest.
i agree with the article. do virtual trading with playmoney for 6 months before diving deep. if you can consistently make money (or break even for newbies), then you’ll be half ready. the other half is outcome independence & take your feelings out of the trade. following the trading plan is the hardest thing in trading. it takes a full year of daytrading (foreign exchange or fx markets is my target) to get a real feel for the market.
caveat emptor: im in finance & i plan to trade for the big boys in the future & not independently. but the rules above apply. if you’re interested in fx, google babypips – its a good newb website.
For some reason this articles assumes the only type of asset class that is subject to day trading is equities. I’ve been ‘working’ as a forex trader in between semesters for the past 2 years with reasonable success. The forex market has a substantially smaller barrier to entry. I started off with merely $5000 USD. It’s possible to get started with even less. The job market is so poor right now that even accounting/finance majors like myself struggle finding worthwhile internships for the summer. It sure beats working retail.
Still, many of the points outlined in the article are true and apply to all day trading regardless of which markets you’re dealing with. Choosing the right broker is key if you want to minimize fees and transaction costs. The just like the market, the commitment is 24/7. I’ve lost count how many times I’ve had to wake up early or stay up to watch a dull press conference with Merkel or Drahgi droning on about the next round of QE they have planned.
Leveraging 10 or 50 to 1 is also a good way to lose everything really fast.
Somebody once told me:
“Day trading is a very efficient method for transferring wealth from less sophisticated people to more sophisticated people.”
My dividend stocks have treated me well over the years. So have my mutual funds. Buy and hold, reinvest the dividends and you’ll come out ahead over the long run, and if you need it they can be a source of income.
If you don’t have money to burn (which is most of us) and you don’t REALLY REALLY understand it, then don’t touch day trading with a 10 foot pole.
Great article. Yes, the gurus are mostly hot air. They like what’s up and don’t like what’s down (hey me too!) and more than a few pump so they can dump and make the cash for themselves. Not a good game to get in to and can stress the hair off your head even if you’re good at it.
imperator82’s one sentence article from his own personal (crash & burn) experience: Don’t day trade unless you’re comfortable losing 100% of your ‘investment.’
I know a day trader.
He’s working at Walmart now.
This guy?
It’s actually quite piss poor and beta to have an article telling people not to do something… sure, in this game only the 1 in 100 win, and it requires massive dedication… far more than gaming women for example… but it is possible and moreover the financial industry is one of the last bastions still dominated by men AND speculation and risk taking is a very masculine pursuit…. i don’t think you can find a tougher psychological challenge than mastering the financial markets… day trading makes day game look like ordering a hamburger…. and good traders bank it like Rockefeller… google for Andy Hall…. fucking legend… $100M in a year…. you can keep your pussy and harems… funny thing is my rig looks exactly like the one in the picture… $100-150 per screen… $500 PC and a couple of $200 graphics cards… i think the cabling was the most costly part….
People win powerball. Doesn’t make it alpha to go buy powerball tickets.
not too many power ball winners in the fortune 500, but outside of inherited wealth, hedge fund managers are a large percentage… there is a huge difference between gambling… especially gambling money you cannot afford to lose, and calculated speculation with well managed risk control and a defined edge (think card counting on black jack.)
it is impossible to always win, but you can stack the odds in your favor and stack the risk / reward in your favor. it can be done and plenty of people have done it and made a fortune doing it….
where the left wing media is inclined to harp on about the wealthy market operators, the (roughly) free markets are what makes the world go around… and there are ways to operate… it does need a lot of skill, determination and lots of capital…. and it’s most certainly not for the faint hearted….. any clown can buy a lottery ticket at million to one odds…. not so many can figure out a system to work the markets….. at 10 to 1 odds…. .
Ray any books, types of analysis you recommend? You a chartist, Etc.
Also you ever heard of Tim Sykes? Snakeoil or real deal? I have always traded but thinking of trying his penny stock shorting strategy.
Exactly!
Why aren’t any of the Fortune 500 solo day traders?
Because employees are not traders. A real trader trades his own capital.
Exactly. Just look below at my “discussion” with that muppet Lucas or something like that. The general public has it all upside down…
Re-read the article. Click links.
The Fortune 500 rates companies, not individuals. You’re thinking of the Forbes 400. Regardless, no day traders there either.
Upside down, just like when you’re getting fat wood sideways up your poopchute.
Yeah… Lots of people who fill the role “trader” at various firms might disagree, but I sorta get your point.
That’s really not really the way to get rich. The way to get rich is trade other people’s capital and keep a percentage of the profits. Unfortunately, you need to have some pretty solid connections to get that money, but that’s the reason why all the Wall Street hedge fund billionaires have such illustrious academic and social pedigrees.
I am not sure if I want to take other people’s money (as a private trader that is). I prefer to make less while not having to deal with all the regulations… I don’t like answering to anyone..
Yeah, the regulation of hedge funds is effectively non-existent. And the pay is generally insane. The only way that you really make money in finance is through leverage – and that means risk, and OPM.
I am working on an HFT platform.. It’s extremely scallable.. I can process tens of thousands of FIX messages per second, hell I can even scale it to millions if I chose to.. I can also add new instruments in a cookie cutter fashion. It’s the whole package: models developed in R, all distributed software running on an HPC cluster.. I have been working on it for the last 12 years now.
Once it’s done, and I have some history of making money with it, I will probably think about OPM. Only then I think it’s worth the aggravation.
You are correct.
There’s nothing alpha about the financial sector.
It’s so timid it would rather inflate asset prices than invest in innovation. Not to mention it’s practically an arm of government also.
Pensions invested in high street banks that are in turn largely owned by the taxpayer because they can’t even manage themselves.
Fucking weak
“it’s practically an arm of government also.” ~ Great shot. Sweet!
My take and see if you agree;
The 80’s had low corporate tax so there was more cash for investment in R&D. Leads to explosion of innovation in the 90’s (credited to fuckwad Clinton). Leads to all kinds of financial profligacy, leads to blow up in 2008. An absolute lack of money available for R&D now will lead to a dearth of innovation in the coming decade among all the other grave issues. The world’s innovation axis is shifting away from the USA very quickly.
It’s tough to nail down, but the spirit of finance was broken into procedures and this led to the demand for low risks and short term profits, which naturally lean towards a big asset inflating scam rather than a press for innovation.
Greed is a cause, but so is a lack of imagination and courage. The latter of which you rarely see in huge, beaurocratic institutions.
In the 80s my Uncle was a banker. Was he educated? No.
Was he even good at Math? No
But he was a natural born businessman. Bankers sacked the likes of him for college graduates in the early 90s
Absolute bullshit.
The tech explosion in the 90s was NOT due to the dropping in corporate taxes in the 80s. The development of the Internet infrastructure was funded by the DoD and developed in DARPA, called the ARPANET. The web you see today was created by Tim Berners-Lee while working at CERN. Practically every meaningful prior component of mainframes and personal computers was created by large corporations that has GOVERNMENT CONTRACTS. Any privately held corp that has a government contract is a de facto extension of the government. Moreover, most high-profile tech companies can exist only because the government gives contracts.
Noam Chomsky illustrates this perfectly
HA HA HA. Chomsky is a god of the radical left, you ape. Of course he mistakenly credits ALL of our innovation to the government. Listen to Kerstein;
Benjamin Kerstein: There are a couple of main points that should be made. First, Chomsky is an absolutely shameless liar. A master of the argument in bad faith. He will say anything in order to get people to believe him. Even worse, he will say anything in order to shut people up who disagree with him. And I’m not necessarily talking about his public critics. If you’ve ever seen how he acts with ordinary students who question what he says, it’s quite horrifying. He simply abuses them in a manner I can only describe as sadistic. That is, he clearly enjoys doing it. I don’t think anyone ought to be allowed to get away with that kind of behavior.
Second, Chomsky is immensely important to the radical left. When it comes to American foreign policy he isn’t just influential, he’s basically all they have. Almost any argument made about foreign affairs by the radical left can be traced back to him. That wasn’t the case when he started out back in the late ’60s, but it is now.
Third, he is essentially the last totalitarian. Despite his claims otherwise, he’s more or less the last survivor of a group of intellectuals who thought systemic political violence and totalitarian control were essentially good things. He babbles about human rights all the time, but when you look at the regimes and groups he’s supported, it’s a very bloody list indeed.
Communism and fascism are obviously dead as the proverbial doornail, but I doubt the totalitarian temptation will ever go away. The desire for unity and a kind of beautiful tyranny seems to spring from somewhere deep in the human psyche.
Fourth—and this may be most important—he makes people stupid. In this sense, he’s more like a cult leader or a New Age guru than an intellectual. He allows people to be comfortable with their prejudices and their hatreds, and he undercuts their ability to think in a critical manner. To an extent, this has to do with his use of emotional and moral blackmail. Since he portrays everyone who disagrees with him as evil, if you do agree with him you must be on the side of good and right. This is essentially a kind of secular puritanism, and it’s very appealing to many people, for obvious reasons, I think. We all want to think well of ourselves, whether we deserve it or not.
You had us going there until you ruined it with that penilinguist douchebag Noma’am Chompsgay.
He also sucks a mean cock, according to some.
2/10 made me reply
Kerstein is a quack who thinks that Israel can do on wrong when it has been proven that as a matter of policy it bulldozes poor dirt farmers’ houses, who dare to stand up to Netanyahu and the Israeli regime. I bet all your info on Chomsky as a speaker was when one heckler who brought up some bullshit in Chomsky’s audience got told hard. It’s a good thing Chomsky doesn’t tolerate your corporate-funded bullshit nor your mystifying rhetoric, cause he’s been dealing with it since before the Vietnam war and he knows it when he sees it.
If you actually studied the real radical left, you will see that it’s people who are created by their material surroundings and who have to adapt to government/corporate policy, not the other way around. That means actual class politics where workers force the bosses to pay better wages through strikes and collective bargaining and to not let the investment class blow up the economy through retarded boom and bust cycles and raise the prices of necessary commodities which starve the people.
I’ll leave this one last piece for you:
If you truly love freedom and desire really actual autonomy, realize that you will take more orders from a foreman or manager than a cop for practically your entire life. That’s where you should direct your attention.
Wow, someone’s in love. Chomsky must look good in a thong. But no need to be so roundabout that you want to reacharound. Just come out and say it. It’s 2015.
Nice projection there, faggot. Get told and all you have is to call the other person gay. No wonder no one takes the whineosphere seriously.
“Nice projection,” he says, then “faggot,” Hilarious. “Get told,” When? When you ran behind Chomsky’s skirt?
Nothing but ad-hominems. What else you got?
I never told anyone not to do it, just gave sensible warnings – like you did – about the realities of the job. BTW you must have an impressive record. Got proof?
Calm down counselor. Getting defensive there. “Got Proof” ~ Only a lawyer, politician or child molester demands proof.
Yet the basement-dwelling schmucks about to spend a month’s worth of McDonald’s wages on a daytrading plan will NOT ask for proof. It’s your money, Mr. Balls.
Something you should know Slick. No trader will disclose his account, let alone on a public forum. That’s something between the trader and the IRS. Get it?
There are indeed a *few* out there who verify their trades. Yes, it can still be bullshit when they do, but eventually it becomes obvious who’s really good at it and who’s full of hot air.
You are wrong. Trading is more personal than anything you can come across with another person. And then there are legal implications.
Legal implications? How do you figure? if someone chooses to demonstrate a trade they made, that has no affect on what they owe the IRS. You’re right, it’s personal, and most traders don’t blab about it – which is why it’s an anti-social lifestyle.
But among those who do go public the community eventually can tell which ones are blowhards versus successful traders. Do your research.
whatever. it’s pointless..
So personal, so why not just fuck it then, right?
“It’s actually quite piss poor and beta to have an article telling people not to do something…”
Yeah, because it’s beta to tell people to avoid throwing themselves off a financial if not literal cliff because 1 in 100 people manage to flap their arms and fly when they do. Stopping people from doing dumb shit that’s highly likely to result in misery for them is not only alpha, it’s what a responsible father does for his sons.
I agree. A lot of the ROK themes could gradually lead a young man to something like this, so it’s fair warning and responsible, imo. Overseas life, working for yourself, gaining mobility through income etc are all hyped on ROK so to head off the inevitable choice by a young man into “Day Trading! That fits the ROK life!” Is actually very thoughtful with high accountability on display.
As the author states. “anti-social”
This is not a masculine activity. It has resulted in workplace killings
http://murderpedia.org/male.B/b/barton-mark.htm
and it’s just emasculating to stare at a computer screen, alone, all day. Sure, sometimes I will veg out and play video games for hours. But these guys do it every day. This is not good for the soul. Plus, basic economic theory teaches you that you can’t do anything other than “be lucky”. If there were some strategy that resulted in “winning” statistically more than 50% of the time, then computers would be programmed with this algorithm, and it would be done by Wolf of Wall Street types with billions of dollars, not with what you have in your bank account. This is no different than going to the roulette wheel and putting it all on red, over and over.
Then there is the whole issue that you are likely trading on one of the US stock markets (other markets are regulated to some extent where you can’t gamble like this) and you will be responsible for high reporting requirements and for paying taxes to Uncle Sam.
Also, I have a friend who does this, Ivy League educated, he’s been doing it for years, still stuck in his parents basement. Need I say more?
“i don’t think you can find a tougher psychological challenge than mastering the financial markets… day trading makes day game look like ordering a hamburger”
There is no wonder so much hate for people who actually made it… The loser mentality is in full display among these comments…
You are absolutely right, there are studies showing trading stress is only surpassed by combat stress…people vomit on their desk..Anyway, I’m getting a little tired of all the nay sayers.. Too much bad energy from these people.
I’ll toss a coin in your beggar cup when the day comes, pal.
He should have never stopped working at Walmart to begin with. That’s where he came from probably. 5K account and they think they can take on the smartest, meanest guys on the planet..
There’s a reason indexing is destroying active trading for the most part.
Fuck that. I’d rather be skint.
I day traded back in the 90’s, did pretty good but everybody did pretty good then. I quit because I was visiting a couple old friends when I girl I once knew say “yeah I’m trading stocks now too”. I have a finance degree, so I some minor idea about stock, but this girl had NO IDEA and became a day trader. That’s when I quit. The year 2000, just before the tech crash. I will say this, it’s a helluva rush, better than sex when you win.
What’s the old saying — when your taxi driver is advising you to buy the stock you’re invested in, it’s time to sell that stock?
Day trading is a great way for average joes to get killed. It’s like a casino; sure you may win in the short term, but your going to lose over time moving in and out of positions.
The best move for most guys, if they’re going to be in the market at all, is to buy a broad index fund with the lowest fees you can find (right now, I’d say Vanguard’s Admiral Shares, but probably there are other good ones).
“Hope” Is Not a Strategy
If you are making individual plays, buy for a reason and sell when the strategy you were using changes.
For example, right now, I am short on the Euro and long on the Greenback. Why? The ECB is still in quantitative easing and the US is not. So the dollar will strengthen (particularly against the Euro) and the Euro will weaken against most currencies. There will be other factors that will affect the dollar, which is why my position shorting the Euro is up >10% YTD and my dollar position is up only 4% YTD. I weighted toward the Euro fund but kept the dollar in for some diversification.
Know When To Sell.
I know a guy who, if he had a stock that doubled, would sell half his position, and then, as he would say “play with house money”. I’m not convinced this should be a 100% of the time strategy, but there’s never a bad time to take profits, either.
I bought Domino’s a couple a few years ago when they were down in the dumps b/c their pizza sucked. This was about the time that they started running those ads they had that were themed “Hey, we get it. Our pizza sucks, but we’re trying to do better.” Main Street LOVES when companies are honest b/c it’s such a rare occurrence. And people will give you another chance (usually) if you own up. Domino’s pizza still sucks, AFAIK, but their stock WROCKED. They were also opening up in India and Indians are (or at least were) crazy for their vegetarian pizza. So eventually, I took profits and bought a house (I am very happy with it; YMMV on house experiences). So I bought for a reason and then I sold for a reason.
Trade in What You Know.
I work in energy. Once I figured out that I didn’t know anything about banks, but knew a lot about energy, my portfolio got a lot better.
The Market Rules
If you think one thing, and the Market thinks another, it’s you who is wrong, not the Market. Don’t believe me? Go google Nick Leeson. Leeson is small potatoes compared to Jérôme Kerviel, who cratered SocGen for more than US$5 Billion. Oops.
The Game Is Fixed
“Everybody knows the dice are loaded,
Everybody rolls with their fingers crossed.”
–“Everybody Knows”, Leonard Cohen
While you’re on Wikipedia, look up the London Whale and the LIBOR Scandal. And read “Flash Boys” by Michael Lewis.
Good luck,
Mistral
At least there are free drinks at the casino.
Best comment yet!
Keep away from any form of gambling, don’t even be tempted to try it, you will lose your money.
Trading is a rather difficult trade – most brokers, analysts and even traders at Wallstreet would not be able to make any decent profits despite having the full academic and even practical knowledge of trading.
Anyone attempting trading should do the following things first:
1. Read at least a good part of the books here: http://bclund.com/2012/03/13/20-books-every-trader-should-know/ Not only do those books convey the factual basics, but they give you an idea of the correct mind-set.
2. Start trading with a virtual account – now with the advent of CFDs and other instruments, there is no need to open a futures account and start trading with 100k. Only after a considerable period of several months of consistent profits in the virtual account – consistent profit under professional money management system that you have learned from the theoretical aspects before. Only then may you attempt to trade in reality – while it is true that it is mentally tougher to control real money – the trick is simply to start slow with extremely low risk and then move forward as you make money.
The good news is that it has never been so easy to start trading since there is excellent learning material out there and the new trading tools make it even possible for someone starting out with 5k. However the bad news is that this very ease entices many to believe that it is easy, much easier than in past times. No – it is just as difficult to do it in a professional fashion. Also don’t confuse lucky trades or dot-com-craze of all-stocks-are-rising with any decent trading skills – most of those guys are men who thought running through a minefield unscathed was based on their stupendous skills while in reality they were lucky until their luck ran out.
And no – it is not gambling, you can be a professional sports better, a professional poker player and a professional trader. All those things have one thing in common: they are done under set rules, abilities, statistical probabilities that successful individuals have mastered. The rewards for those jobs are great, but so is the amount of work, discipline and learned mindset that you have to put in. Also it’s true that a good part of the population could never trade or play Poker successfully, while most of them could with adequate education work on Wallstreet successfully.
What are CFD’S?
For those interested in trying this with small amounts (or just to practice), consider giving bitcoin a try. No opening or closing hours, works the same worldwide, can use as small an amount as you like (even fractions of a cent) and can be invested in other projects if so desired (my choice, as it turns out that I am a terrible trader).
There are about 1000 trading strategies around
the only chance you have at success is to specialize in ONE type of set-up with only a small handful of high volume stocks(similar crowds tend to trade the same stock and you learn it’s behaviour) , and practise for 3 months on paper and realize with psychology involved your performance will be less than 1 3rd of the paper results, brokers give everyone free practise accounts to trick you into thinking youll do just as well when it’s your own money on the line
Use heiken ashi candlesticks in a 2-5 minute frame, the RSI, volume and just trendlines you’ll be wrong half the time still with these “obvious” set ups
Remember it’s a zero sum game but less with commissions but don’t let it turn you off, everything in society is zero sum for example:
You see a hot woman, well someone more alpha will get her, someone has to win and someone has to lose
You write blog? someone more interesting steals your customers, this is life, and none more obvious in trading where only the most vicious will make it
when you are born, someone else has to have a funeral to make room
when you buy something, someone had to invent/make it, when my m8’s told me ya know fella its zero sum, i said shite that is true for EVERYTHING
Be super aggressive and specialize in common set ups like break outs or momentum shorts, and save yourself tons of money by paper trading first to see if you even have a chance, and never hold overnight
lots of phds smarter than the general public lose money trying to trade, because education doesnt mean shit, it wont make you good at reading the market
its not “easy” money, there is no such thing, its very stressful to work your ass off and be proud for 3 days you are up big time, than lose it all in a few stupid moves, it is “sophisticated” gambling, but all business is
its something you can work your ass off at and eventually be successful with but so is everything else, the point is, day trading is not special, its a casino
I knew a guy who’d use the heatmap on stocktwits, to feed on hype, total genius and in practise his rank was top in the community, but it turns out after getting to know him, he doesnt even make much money compared to how good he is
our psychology works against us
the first thing I did when I sold my house was start an online trading course with a view to playing with a percentage of what I had. The course was actually very good, so much so that I realised almost immediately I’d never stand a chance of beating the system based on ‘technical analysis’- I tried some demo accounts and almost invariably lost all the pretend / play money. There are so many courses out there now, all of them encouraging the little guy to take on the big speculators who know what they’re doing, its hard not to believe that the latter are really quite keen on us all losing our money.
I do wonder about forex though. You don’t have to be george soros to get a sense of where currencies are going – its also a good excuse to keep up with politics, for instance the recent difficulties with the euro have been great for making a few quid in ordinary currency exchanges, but what if you could do the same with real leverage? probably just as dangerous, but a lot easier than trying to make sense of candlesticks
Way too complicated for me. All the charts and graphs and attempting to psychoanalyze how other people are psychoanalzying how the people guessing how the market will react to something is too much.
I read a bunch of annual reports. I find companies selling for less than I think they are worth. I understand these things in some cases.
I buy about 2 stocks a year. I sell less than 1 a year.
It’s my sloth investing style, but it works well for me.
Trading can be rewarding, I have been successfully trading since I was 19 (for the last 11 years). Im starting a new prop firm here in Michigan in a month (has been a year in the making), this gives you a real advantage because we provide you with the capital and training so you dont lose your own money, you can google more about that and if you are interested in trading for me pm me on my email at [email protected] (long distance or virtual trading is available as well)
Why do I get the sensation of lying on my stomach in bed to the sound of dueling bed springs???
you tell me
Because you have 3 monitors, a coke habit and costly sluts to pay for? Is that why?
day trading was never glamorous folks
the hype was always just that – hype
Well Spake!
Back in the decadent 1920s, someone quipped that intellectuals are people whose primary activity is describing their secondary activities. Roosh travels the world in pursuit of pussy, and supports himself by writing about traveling the world in pursuit of pussy. My sociology professer majored in sociology and got a job teaching sociology. What worked for them ought to work for me too, right?
I’d suggest being a freelance software developer, because it generates non-self-referential value without requiring much physical presence. Or run a website of dubious legality, where physical presence would be a liability. I suspect that Agora’s founders are still free men, unlike the Silk Road 1&2 guys, because they don’t live in San Francisco.
Agora – such a pile of shit! lol!
http://www.cbc.ca/news/canada/british-columbia/roller-girl-angela-dawson-wins-15k-damages-from-vancouver-police-1.3009637
I know it’s unrelated to the article but it must be shared.
Thats Ok, I’ll prefer to get rich slowly buying stocks with huge moats with rising dividends. The boring stuff like GIS, UL, HSY, NSRGY.
By and hold along with dividend growth investors tend to have better long term returns than churning and with lower risk. Of course you have to be able to stomach your investments going down 50% and not selling off, which most people can’t do.
After 15 years on Wall Street, I’ve never seen a single person make money this way. While there are many paths to the same destination, the easiest and most reliable is to accept a certain amount of volatility, make long term investments, and be patient.
“After 15 years on Wall Street,” ~ Scum, Scum, Scum! Go back to whare yur frum!
Grow up. You can’t make money anywhere else as well unless you have some brilliant invention (I didn’t.)
“Hate the Game…”
Sorry you are limited in your financial opportunities.
Funny, I didn’t feel limited then and I don’t feel limited now. In fact now I can do whatever I want.
And yet instead of being out there doing whatever you want you are sitting in your tighty-whiteys in front of a monitor on ROK.
Hate the game, not the player. If being a physicist paid what managing a small hedge fund does, then I’d be studying the mysteries of the universe.
“Hate the game, not the player.” ~ What a droll little meme parrot you are.
The article is very accurate. It will take you a minimum of 10 years to be able to make a living of this, and it’s not guarantee.. So you spend 10 years and you can get nothing at the end of it. But.. if you make it, you’re done. It’s like printing money. So it’s a high risk/high reward kind of deal. Can you stomach it? Then go for it, but let me warn you; it takes nothing less than absolute dedication. Anything less and you’ll be wasting your time.
Let me emphasize what absolute dedication means.. If you have a family, get rid of it (kids/wife, it doesn’t matter), if you don’t have one don’t get one. Friends? Gone. Free time? Gone. Mental health? Gone. All these until you make it. Then you can get all of them back 10 fold. That’s the deal.
Bullshit.
I lost my house, pension, wife, the kids and the dog due to day trading; so I became a gangster.
it’s possible to make lots of money with stocks, but I would stay away from daytrading this works pretty well http://greyenlightenment.com/the-power-of-linear-combination-etf-portfolios/ gl all
Solid article.
I’ve spent the majority of my career in brokerage firms and on a propriety trading desk and this is 100% true.
First things first, get penny stocks and forex (not fx futures) out of your head. These “investments” are how the gullible donate their money to the market quickly. If you’re going to trade only go for stocks or futures. And if the idea of futures scares you, kill your day trading dream off right now. Most people don’t have the stomach to trade you my friend are not one.
Also, let’s think of the math of trading. Let’s say you have a 50k account like the article suggests. So in order to have a solid living you will need a 100% return on your 50k in profits without touching your principal, and you’re going to have to do it without a major drawdowns during the year.
100% return years are possible, but I would never ever count on one. The stress of trying to achieve a return like that would destroy your quality of life. Although it may not look like it, trading when done properly is not fun and exciting where you are rewarded for making decisions from the gut. Quite the contrary. When done properly trading is stressful, boring and the trading from your gut will end in disaster. Costing you either your account or you’re job.
Next, I’ll break it to you guys, there is no such thing as a perfect trading system. I’ve seen so many guys look for the next guru or the next system, bouncing from theory to theory hoping to find the holy grail. Far too blind to see the problem isn’t with the systems they are trying to trade, but instead it’s with themselves. They can’t manage money for shit, and their mental frame is woefully inadequate.
The system as far as charts and patterns is so small a factor when it comes down to it. The only way you will make money in the market involves you’re ability to stay disciplined and clear headed. And many people have zero idea how to maintain this level of focus.
Finally I’ll say, especially when it comes to daytrading, most people have no idea what they are up against. When I was working on the brokerage side of the business I’d get clients from time to time who were convinced they could open up their $600 laptops, load their free trading platforms, connect over their shitty internet connections and pull money out of the market in two hours a day after work because they took some bullshit online trading course that promised 95% winners. These people have literally no idea what they are up against. Their competition are pros with 20 years experience, two hopped up trading PCs, and direct trading lines to the exchange. The pro traders spend thousands a month on their charts and have more money on their wrist than some of the internet wanna-bes have in their entire account.
Money can be made in the market but it’s not going to be made in from scalping trades for a few ticks from these guys. The odds are too far in their favor.
Also, before this turns into some kind of bash the rich trader thread, I’ll say the pro traders are far better guys all around than the internet wanna-be. The pros, to a man, were confident without being cocky, and more than willing to dispense knowledge to anyone who would listen. When compared to the cocky asshole day trader who thought he was gods gift to the market, it truly is no comparison. Honestly, I was happy when I heard some of the internet day traders got slapped around and humbled by the market.
If anyone wants to hear life lessons from the floor, I’d be open to writing an article. Just let me know
I’d be eager to read that. And I also agree, far too much (but not all) of the retail day trading community is made up of degenerate gambling losers.
Please write that article.
Don’t forget to tell us about those standup pros at places like SAC made out so well with that discipline and knowledge (ie, coke-fueled arrogrance and insider tips).
When the SHTF, (read SEC/FBI task force came calling) watch how the hotshot stars turned and grassed (informed on) their pals who did no worse then themselves.
Once the mob saw a little blood, the gov. Running dogs got their convictions, the bigshots, grasses, and friends lower profile and the game continues.
Don’t be a sucker.
Excellent post… And no, don’t write the article. Guys looking from outside for a quick buck won’t get it. You know how this works… Just look at the hate comments on this article.
Yeah, originally I thought about putting together a write up on how staying clear headed, focused and disciplined was necessary on the trading floor as well as in life. But it looks like the point would be lost on most people.
As someone who has traded in stocks and Forex for many years, I can say, it is extremely difficult to eek a living out of it as a retail trader. I HAVE NOT traded anything other than stocks and Forex (mostly Forex). All I ever managed to do was double my income and, that was basically working at it as a second job — 4+ hours a day. You could do better just getting a second job. As the author points out, the amount of equity you begin with is critical. In the US, most stock brokers won’t even let you use margin until your equity is at $25k or $50k. If you’re trying to trade stocks with a $10k account, you are wasting your time. I would argue, anything less than $100k equity is a waste of time in this market.
Foreign Exchange (currency) market is much less regulated. Most retail guys try their hand at it and blow themselves up quickly. In the US, most Forex brokers offer 50:1 margin and minimum equity between $100 and $1,000. Again, if you’re a punter who thinks you’re going to use margin to get rich on that, you are mistaken. Also, many Forex brokers are deal desks, meaning they quote you inflated prices, or blatantly take the other side of your trade. Other horror stories include: Keeping profits, constant re-quotes, keeping interest on carry trades, slow execution of trades, etc. Again, since it is not really regulated, it is legal to do these things.
With Forex, if you can find a reputable broker and eek out a constant 0.5% intraday, you are doing well. So, let’s run some numbers. You are a brand new Forex trader, whose equity is: $1,000. Instead of sleeping, you are trading at 1:00 AM because you live in Denver and this is when London opens (London session has the highest volume). You manage to make 0.5% consistently, for a month. This is about: $100. For the month. As your equity increases, your position sizes increase accordingly. It will take you about 8 months to double your money, if you make 0.5% EVERY trading day, which is nearly impossible.
——-
I started in Forex with $50k equity, after farting around in a practice account for 2 years, and still only managed to double my income from working (after 1 year of live trading). I set stops, so I usually wasn’t up at 1:00 AM. I’d take positions during Tokyo/Sydney (low volume) and let London do its magic. I’d wake up and see what happened. Usually 2/3 good, 1/3 bad news. Sometimes all bad news. Occasionally I would sit at the terminal and actively trade, but not often. My max risk was 1%. I swing traded using intraday moves and managed to make an average of 0.25% a day.
It’s tough.
So the take home points:
You’ve got less than $100K, waste of time.
More than $100K, waste of money and time.
OK
Not really a waste of time if you have enough equity to cash in on small moves. You have to have the equity, though.
You can’t beat machines trading millions of shares at a time, creating their own trends. Unless you’re an insider with control of a trillion dollars and a program, forget it. The argument starts and ends there.
Daytrading is largely a zero-sum game. Largely, not entirely, because there’s a little bit of money to be made from being the middleman and liquidity provider between investors, which is what daytraders essentially are collectively as a group. Yet, that pot is of fixed size, and the more traders try to get a share of it, the less is there for each one of them.
Which makes it essentially a casino, with the difference that the house pays a tiny amount into the pot rather than taking a tiny rake off it. But still, with the sheer amount of daytrading going on, most money you make or lose comes from or goes to the other participants of the game. Daytrading is internet poker for yuppies.
It is not a 0 sum game because 0 sum game would mean example that it goes up 10% then finish the day at 0%. That is very rare, most of the time it will go up 10% then finish the day at 7%.
alpha creation in Day trading is impossible in the long run because you are competing with people with inside information. this means buy the index or buy what investor activist buy. The truth is the best performers like sac capital are consistently getting inside information. You cannot beat someone who knows where the prices are going before they get their because they are a broker and have a list of the next 1000 upcoming trades.
Well Spake Sir!!!
It’s all crooks or lucky-boys with family trust money to play with.
bull shit
Out of nose candy, or is the market closed in your time zone, twat.
Some markets never close, muppet.
Done with you, girlfriend, go snort some coke off the toilet seat at the biker bar.
kk
And yet there are people making a lot of money..How do you explain that then? One can always find reasons to not do something.. It’s a state of mind..GL to you.
I don’t dispute it, but CONSISTENTLY? You can’t find anyone on the street generating alpha consistently, and the few who are, again are either under a cloud of insider trading suspicion or have or were caught like sac capital.
Sure if you jumped in the market in an up year, or you picked one or two good stocks you might beat the market for a while, 1-2-3, maybe even 4 years. But the only way to beat the market consistently is to have an edge and that requires insider information. Because the lawyers who work on the deals, the bankers, the brokers, they are all insider trading and often doing it through friends and families and friends of friends to avoid detection.
I use to work in capital markets. You might buy apple stock and get lucky for a while, but its not a consistent winner.
You may be right. There is some insider trading going on in the stock market, and I can see how some of the info can be leaked out. I don’t trade stocks so I can’t comment. What I was talking about are day traders that make a lot of money, guys that are in and out of the market many times/day.. There is no insider trading going on there. It can’t be, especially in the forex, commodities markets.. and yet there are very successful.. some of them are consistently profitable.
Its not SOME info, you have thousands of lawyers, accountants and auditors, stock brokers and analysis, and investor lines where people are trading on the inside.
Some day traders make money for a while, but sooner or later they all lose to the market. There is not a single day trader who has consistently beat the market in the long term, not ONE.
You are aware that they even have computers with algorithims that trade millions of times before a human can even place a single order including in forex? Traders are being phased out by quants.
John Paulson–crushed the market year after year–until he didn’t.
Nobody said it’s easy… reading all these comments and all I hear is why something can’t be done. It’s sad… I thought these were real men I was talking to….
I would have preferred an article on how to make a living playing poker instead of day trading. Both are gambling but one is cool and fun and the other is like going to Harrah’s Casino in Cherokee. You WILL be scalped. But by psychopaths in suits instead of savages in feathers and war paint. Also, I NEVER take advice from a lawyer.
Neither one is gambling, they are games of skill. Degenerate gamblers will lose in either environment. Poker has fewer moving parts, but it takes the same mindset to be successful.
You can make money gambling. Look into baseball- no spreads, just pick em…
Warren Zevon would beg to differ- he believed in sending lawyers, guns and money.
I’ve read all these comments, and not one has mentioned the tax implications! If you are fortunate enough to have gains, then you must pay federal taxes on the profits. These are considered short term capital gains, which carry up to a 30% tax rate. So if you profit lets say, 50k in a year, then come tax time, you have to come up with15k, to hand over to Obama, so he can turn around and give to the slackers and deadbeats in this country who get to sit at home all day and do nothing, except collect a check on the first of the month! Take it from me; dont even try it. I got a sweet little inheritance in 2007 and had the great idea how I would turn it into a million by day trading. Well after 18 months spent during the worst finacial market crash in decades (2007-2009) all I can say is that today, im pennyless. Work 8 hours a day in an inbound call center for Directv taking calls from irate customers all day complaining about their bill. And i have about 20k in credit card debt. Oh how I wish I had my 100k back! Thw whole time the market was crashing, I would listen to CNBC all day and the talking heads about how”now is the time to buy, the bottom is in!. I was on the wrong side of the trade the whole time. You cant win, Dont risk it. Start a viable business, write off your expenses, dont pay taxes, and keep your money!
If you are a full time trader (and are actually profitable) there are ways to reduce your tax burden legally, with an accountant who understands the industry. But chances are you won’t have profits to worry about.
You were never a trader, don’t kid yourself. Why would you listen to anybody let alone CNBC… Anyway, sorry you lost your money. It’s how this game works.. As to your tax issue, there are many ways around that… You never did your homework..
I agree with index funds, covered calls…the day trading thing is bullshit- the institutional traders will eat you for breakfast.
For anyone with an open mind and absolute hatred for the idea of working for a living, look up Timothy Sykes. His DVDs are my bibles. I lost a couple thousand trading mindlessly with my own cobbled together method, but I made it all back and then some after watching Sykes Pennystocking DVD. I’m not a promoter of his (his DVD’s are $400-$500 each so I looked around for “other” options to acquire them) but the stock market isn’t a scam like this article makes it out to be. You can and will lose, but you have control over that. Control your losses and let the wins come to you. If you’re pennystocking, you will inevitably stumble onto a huge gainer. The stock market can be life changing if you control your greed and realize that you’re swimming with sharks.
Everyday that I trade (most days), I remind myself that I am an infant getting into a boxing ring with mike tyson in his prime. There’s no chance of me winning; the best I can hope for is to land a few good shots. I HIGHLY recommend the stock market to anyone who doesn’t want to get rich. You can easily replace your $45000/year soul sucking job with daily day trading. Most people day trading are looking for jackpots (whether it’s long or short term); these people pass up $200-400/day for the chance at big wins. Me, I take those small wins every chance I get and you should too. I write this for anyone that’s as lazy and uninterested in the idea of careers as I am.
1) I never said the market was a scam.
2) Losses are a hell of a lot easier to “inevitably stumble” into than wins.
3) If you’re “lazy and uninterested” in a career, day trading is not for you.
Most people want it easy. That’s the problem. Just like them browsing this forum hoping for that one little something that will get them laid. Pathetic.
I consider to start daytrading, since I have some savings.
I am confident though because I have been a financial analyst at an investment bank for a short while. I also have a degree in Finance so I understand industries and big pictures. I also do understand the difference of day trading and investing, and how owning a stock for a longer period is not always a bad idea.
My additional recommendation even before I have started is, pay attention to commission fees, they might eat up your profits!
He was a Day Trader….one way ticket yeah….it took him soooooo long to find out….to find out
I get it. ‘Money for nothing’ goes right along with ‘chicks for free’. Get an official junior deputy ‘money changer’ badge and t-shirt. Wooldn’t it be easier to just walk into a bank with a bag and say ”give me back all the interest that you money changers stole from me”. Whatever you do, don’t say ”give me the money” because that would be ROBBING! You don’t want the ‘money’. No, you just want your INTEREST back from the schuysters:)
If your not trading IPOs, day trading is about the biggest load of bull you could ever partake in.the majority of stocks don’t make meaningful moves on an intraday basis but rather on a weekly or monthly basis.
An article like this can be written about any line of work.
Anything that you proceed to do successfully should take effort and hard work. For the author that wrote this, he probably took the predictable short sighted routine of first learning from gurus and then played his money in the stock market where he blew up his account. Winning traders bat singles and doubles, thereby their trading accounts accrue massive appreciation over time versus the traders who fall for heavily marketed pump schemes by scammers like Timothy Sykes.
Also let’s be honest here–most lines of work can be taught to pretty much anyone. And yes, investment banking is a commodity just like any other sales related job. As you get older, you realize how much you and others really don’t know about what is going around you, but there is one thing that separates the dreamers from the successful and that is, successful people simply take fucking action. Given that, let’s quit it with these defeatist articles and focus on what we CAN do.
And always remember kids….. Trading is like gambling, you can lose everything!
Last 30 years S&P index return 1600% w/ very minimum or no work
Last 30 years day trader return -70% w/ all the bull shit technical analysis work.
It’s a business for people who can’t find a real job.