I still think the difficulties of daytrading are being understated here. Let's look at a simple example. Suppose you will make $200 or lose $100 precost on a trade which costs $25 (or 12.5% of your winning trade as you suggest here). And that to make it simpler let's assume we just do one trade a day. To breakeven without trading costs we'd need a win rate of 33.3%. However with trading costs included your required win rate would go up to 41.6667%. [You can use different profit vs loss figures and implied breakeven, but it won't change the results] Although this might not sound very much this would mean that your annualised pre-cost Sharpe Ratio would need to be around 2.6 - just to breakeven. To make the sort of after cost SR that I expect on my own system (around 0.85) you'd need a win ratio of 45%, corresponding to a pre-cost SR of about 3.5. This is incredibly high. You seem to be arguing that someone who can't achieve that shouldn't be trading. Well they certainly shouldn't be day trading. Personally I think the number of traders who can achieve that is incredibly low (though obviously over represented here). For the vast majority of people I think its impossible, and they should trade much more slowly. Trading more to make more profits is going to make things worse not better. Lets take another example, doing ten buys and sells of one NASDAQ contract every day. It costs me around $3.50 to buy or sell each contract, including spread and commission. As I'm always holding one contract my risk is about $640 a day, or $10,200 a year. Its going to cost me $70 a day to trade this thing or $17,500 a year. That is an annualised Sharpe Ratio of 1.70 just to breakeven. And the NASDAQ is pretty much the cheapest thing you can trade, once you've adjusted for risk. If I do it on say Eurodollar futures, and I limit myself to just two buys and sell each day, then the breakeven is a Sharpe of 3.0!
Daytrading is not simple, it is even very difficult. But to find out if you can it is very simple: You should only know the answer to 3 questions: what is my average profit per winning trade. what is my average loss per losing trade. What is my win rate. I would not waste my time calculating what if.... sharp ratio...example tells this or that.... I would put all my energy in trying to find a performant system. And if I can answer my three questions, I know exactly where I am. Don't need calculating what if.... sharp ratio...example tells this or that.... I have done a few things in live already that were statistically not very realistic according to some people. When I succeeded they called it plain luck. But these people who told this always speak about: We should do this or that, but it is very difficult.... They continue these conversation over and over again.... till they die. I call this self destructive behaviour. One of my friends talks already 40 years about changing his job..... he is still working there. In the same period I started 5 companies. I think there are on ET around 5-10 daytraders who pretend to be profitable. On the total amount of members I think they are NOT over represented here. But even if they are the question stay the same: what is my average profit per winning trade. over 200$ what is my average loss per losing trade. always below150$ What is my win rate. always above 80% About these figures: Over 200$ means over 200$. So it can be 201 or it can be 400. Don't want to give exact information because even these figures will not be accepted, so what's the use? Over 80% means over 80%. So it can be 80.1% or it can be any other figure above 80%. But it took me 10 years to get there. I appreciate it that you use at least valid arguments and calculations. So I consider what you wrote different from all the nonsense we sometimes read. Like: you should be the richest man in the world. And I agree for at least 90% of the traders daytrading will never be profitable. Try to find out where you are, in the 90% or in the 10%.
It is true, however, that most of those who are daytrading -- or claim to be daytrading -- are not in a position to do so simply because they're doing something else at the time: working, in class, driving, etc. No one who is serious about this can do it while also engaged in some other activity. And no one who is not serious will ever be able to trade enough size to make it worthwhile, much less be able to do it for a living. All this can be addressed by choosing a larger bar interval, such as the 60m. But persuading traders to go that route is not easy.
Returning then to the OP, in answer to the question "Can short term trading be more profitable than long term", we can agree that the answer is no for 90 - 95% of traders. I certainly know I'm not in that group (the top 5 - 10%). I'm very happy to make a SR of 0.85 with a fully automated system on which the holding period is weeks rather than minutes or hours, and where I'm paying perhaps 8% of my average profits in costs.
I agree I set aside a few k of my account to test a short term strategy but even though it was profitable I was way more susceptible to emotions than I would when I hold 1-14 days. Real edge of the seat feeling watching the pnl.
If you ever try it again, turn off everything that tells you how much you've gained or lost and focus on your trade. You may find that you're far more relaxed in addition to being far better able to judge whether or not your trade is in real or imagined trouble.
Risk / reward < 0.75 with probability of 80% win rate. LOL. If someone has an approach that can generate this type of return, the institutional (Goldman, morgan) will not hesitate to buy this approach from him for at least for $50million (provided this is not curve fitting that work only in certain market conditions and duration ) and that person can retire young and not even need to trade anymore. This is what I worry in this forum, someone post something that completely BS and the newbie take it as holy grail.