Can Short Term Trading Be More Profitable Than Long Term

Discussion in 'Trading' started by Fundlord, Apr 7, 2015.

  1. if you only could do 20 % of perfect timing.....
     
    #151     Apr 27, 2015

  2. In roulette the casino only need 1/36 = 2.7% as "commission" and they never loss in long term.

    I assume you have the "business cost" of 3 ticks (2 ticks commission + 1 tick slippage for high liquidity stock), you are betting for 30 ticks. This mean you are paying about 10% (3/30) business cost for each trade ?
    You need a very good edge to overcome this.
     
    #152     Apr 27, 2015
  3. Vindago

    Vindago

    Well, the Roulette being random does not allow any winner but the house in the long term. Trading is somehow different since it is not random as price moves between levels for very good reasons. Understanding these reasons together with tight control over looser trades gives all the edge that is needed. It is not easy but that is the whole point (at least that is what I think) since either a trader makes significantly more ticks than he looses (in which case commission and slippage are just a nuisance) or he does not (in which case he would be loosing money even if he did not have to pay commissions and there was no slippage).
     
    #153     Apr 27, 2015
  4. You assume by looking at your " level**", you have the probability/odd (or aka edge) to win which can overcome your "business cost" (which is 10% in your case). Good luck for this.

    **level ** = can be anything such as price action at extreme location or support/resistance and you bet on reverse or break out, or any indicators (pivot, oscillator, BOLL band and etc), chart pattern, even tea leaf or anything.

    A tight control of looser will reduce your risk/reward ratio but also reduce your probability to win. The same apply in opposite way.

    One advice to you - beware of all the poster that try to sell dream here, as most of them are here for either they want to sell you something (education, web site, signal, books, system, or broker sponsor individual and etc), or just those losers that try to pretend as expert here.
     
    Last edited: Apr 28, 2015
    #154     Apr 28, 2015
  5. Vindago

    Vindago

    Thanks for the good advice, I fully agree with you as I would never even think to get standard education on Trading (i.e. books, web sites, systems, courses, etc.) as it is pretty clear to me that no successful trader would ever spread around his knowledge even for a price...

    I got most of my education by doing my own work, looking at tons of charts and spending few hours every day looking at real time price evolution for the stocks I trade. I also follow few threads in ET and filter for good advice (after you have been around a little is relatively easy to identify good advice from bullshit).

    I think I was lucky enough to find a couple of great threads on ET (obvious not obvious and Market intelligence) when I started trading and I skipped the damaging of getting standard education as if 98% of traders loose money and probably most if not all of them start by reading tons of trading books I guess by not doing that you start with a clean slate and are not biased by that disrupting education.

    I know I still have a way to go before consistency and it is mostly on the psychological side as I know where low risk entry points are more often than not...
     
    #155     Apr 28, 2015