Can Short Term Trading Be More Profitable Than Long Term

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

  1. loyek590

    loyek590

    now I'm so confused
     
    #31     Apr 7, 2015
    lucysparabola likes this.
  2. Buy1Sell2

    Buy1Sell2

    That' correct--Capital is not an edge.
     
    #32     Apr 7, 2015
  3. loyek590

    loyek590

    ok, thanks for coming to that conclusion for us. You are a very helpful person.
     
    #33     Apr 7, 2015
  4. dbphoenix

    dbphoenix

    After 11 consecutive losing trades (not unheard of), a $1000 account becomes $800, risking 2% on each trade. In order to get back just to breakeven, having lost 20% of his account. the trader must increase his account balance by 25%.
     
    #34     Apr 7, 2015
  5. taowave

    taowave

    warning...you are about to get sucked into the B1S2 scaling black hole...proceed at your own risk
     
    #35     Apr 7, 2015
    lucysparabola likes this.
  6. It is possible, but it depends on market conditions. Daytrading a market with very little daily range is usually suicide, you need sufficiently large swings to overcome the very high frictional costs of daytrading. For example if the cost of initiating a trade is 1.5 tick (comms + spread) and the range, or max theoretical profit if you buy at swing low and sell at swing high is only 10 ticks, your cost each trade is a whopping 15% of your max profit, you will never be able to overcome such impossibly high costs in the long run, it will simply destroy you. Now things obviously become a lot easier if the daily range was 100 ticks instead of 10, see the picture now?

    There aren't many products that offer such range these days (not on a consistent basis anyway), so my advice is to stay away from day trading if you can help it.
     
    #36     Apr 7, 2015
    loyek590 likes this.
  7. Buy1Sell2

    Buy1Sell2

    No. But it does dictate position size for inital entry and risk. Market dictates maturity. The most successful people at letting trades run to maturity with small risk to their capital are the big winners. That edge never goes out of vogue.
     
    #37     Apr 7, 2015
  8. dbphoenix

    dbphoenix

    There are 263 threads about "edge". I suppose this will be the 264th.
     
    #38     Apr 7, 2015
    lawrence-lugar and lucysparabola like this.
  9. Buy1Sell2

    Buy1Sell2

    I certainly think that there are many, many more opportunities intraday. However, I suspect that most retail traders that day trade are doing so because they believe it to be less risky due to some of the features that you mention. The problem is though that your question may be flawed a bit since you ask about catching the big moves intraday. I don't believe that that happens as a rule. I put forth to you that most retail day traders are engaging in quickly taking profits, using breakeven stops, using no stops and scaling in/out--------3 of these are specifically designed to choke off big winners. In addition most intraday traders are not nimble enough to trade on the short time frames. So, there may be more opportunity, but most of this may be missed by the retail trader whereas the outraday trader will have more time to reflect and make decisions and catch more of those setups. CAN you be more profitable when short term trading? Yes. Will you? Most likely not.
     
    Last edited: Apr 7, 2015
    #39     Apr 7, 2015
    lucysparabola and Visaria like this.
  10. eurusdzn

    eurusdzn

    Good exits seem to contribuute to good results. Not scrutinizing entries endlessly helps.
    Daily bars trader should allow some flexibility in an entry "area" . Sure to break even over time if exit for no good reason while price is actually running. As well, no good reason to hang for a 50% retrace turning your results to a low winning percentge unless you fully intend to sit on ass with trend until done and that isnt easy.
    Simple rules to capture a good portion of a trades max profit along with a nice ratio of winning percentage/MAE (flexibility referred to above) is a decent model to test but harder to execute.
    Focus is on exits here. Sort of awakens the dead horse of entering in trend and working on your exits. Also sucks getting one swing of a trend because a "chart" didnt provide a pretty entry to get back in.
    How do you say this. Have the skill to take whats given? Thats probably edge.
     
    #40     Apr 7, 2015