Hello, I am not new to trading, but have time now to spend more time on it. I have been trying day trading with inconsistent results. I have allocated a $30,000.00 account for this purpose. My intent was to keep that as my principal and draw off the profits. I use ThinkorSwim as a trading platform and have written many thinkscript studies and strategies that seem to work for a short time and then fail to perform. The drawdown on my account has brought me very close to the $25,000.00 pattern day trading account minimum. Sorry for the long post, but I thought a little history might help. What I am trying to accomplish is to only trade 3-4 stocks per morning session, preferably from 9:00am to 11:00am cst. I would like to average at least $200.00 per day. I would only need to scalp 1 to 2 % to accomplish this. If there is anyone with information on any strategies, screeners, stock lists to pull high probability stocks from, services, newsletters or any information at all, it would be greatly appreciated. I am not trying to get rich quick, just earn a few extra bucks to supplement my SS. Thank you in advance
So you want to make a 100% return per year on your account, here is a normal distribution. The benchmark return on an account with $100,000s in capital is 15-20% per year so that someone can quit their day job, that is equivalent to the return you're looking for. This sits around the 2.5σ or top 0.75% on the normal distribution, close the same knowledge a millionaire has. You want to do the same with 10x less capital, for each reduction in capital by one zero you need to increase the sigma level 0.5σ, which means what you want to do is in the top 0.1% of all traders (3σ) to generate $40,000 per year trading full time with $30,000 capital part time, which in itself would require at least another 0.5σ to 1.0σ increase to offset the lack of time. I would like to say your idea is deluded, but as it turns out that is how human psychology works, everyone thinks they can be the best with no experience, no capital, and no time. But it's fascinating to watch, your first issue, the markets work a lot slower than you think, actually around 100x slower so unless you 10x leverage up, which requires a suitable 0.5σ increase in perfection, and reduce your timeframes which requires another 0.5σ increase in perfection, you'll find out when your capital evaporates it just doesn't work your way. So, in summary, what you want to do has approximately a 99.9936657516% chance of failure, if you believe you can beats those odds, and once in a blue moon someone does, it's a fantastic idea. Side Note: the truth hurts, but the markets really don't care, they want your capital and you're already well on your way there.
Trading is not easy at all. Systems that seem to work when back tested or paper traded (especially standard indicators that everyone else uses), don't nearly work as well in the real world and in fact, may break you. You need something above and beyond standard indicators, as well as a keen eye, which is garnered from years of trading. As for hitting the limits, you could try trading futures instead. I also use thinkscript. Lost my 20+ year "stable" job back in 2014, and decided I'd go into trading full-time. Jumped right in and quickly developed a system that made amazing returns - on paper. Finally went in with real money, and lost big time. I then realized, it was going to require something different and something more. So I've been coding and testing non-stop, usually 12-15 hours per day, for the past 3+ years. It's taken that much work and that long to develop a system that's just now starting to work well. Good luck to you.
I generally agree with the expectation management direction of your post. And your logic is sound until this point...I'd call anything better than the S&P success (or even anything better than losing)... But more to the point, the problem here sounds more like commissions than anything else.... 3.5 trades per session x 200 trading days per year x $14 (1 open and 1 close transaction) = $9,800. So you're effectively talking $10k 'at risk' money needing to become $30k before commissions in order to overcome the commission burden and meet the target. FWIW, I've tried day trading and I'm a miserable failure at it--specifically due to fee burden. I can't call market direction for the life of me (I'm about 50-50 on it), so I've found success elsewhere where I can make money even if the market moves a little bit in the direction opposite of me.
For over 10 years I am a member on same forum with this guy and he often makes live calls and seems to be correct more often than not. This is his private forum or website and i am not a member there and personally never took his advice. If anybody is any good may as well be him,combine this with good screener from elsewhere and good luck! http://volumedynamics.com/ Add to this Kwave opinions,who does trade for over 20 years and from what I remember has "spagetti" type charts with multiple moving averages. He posts a lot less than years ago,good trader.
Actually any profit is a success compared to the other 99%, but the question was very specific and this was a very specific answer to their expected return. If they reduce their expectation 10x or increase their capital 10x then their effort becomes moderately easier towards the equivalent of millionaire knowledge rather than UHNW and above.
...so...this wasn't expectation management? We're both making the same point that the approach is wrong. You just addressed return while I addressed costs and risk. How about I say it this way, the mentality of "I would like to turn my principle into X% gains" is a gambler's fallacy looking for a loser. As for practical advice, managing risk rather than targeting reward is how I've found success. In the grand risk-reward equation, you have any control over exactly one side--and that control is total. In converse to the above, my mentality is "I would like to keep my principal and expose myself to potential gains".
I totally agree with your post. Seemed to me OP's trading outcome was random and the reason he lost was because of fees, i.e., his brokerage made all the money. I did the following backtest on day trading: For 10 years, every day, buy SPY at open and sell at close, on average it was a profitable trade until I included commissions then it was a net loss. I tried day trading randomly and the outcome was the same. I think the upward bias of SPY over time was what gave me the profits before commissions. Are day trading doom? IMHO no because the stock market has an upward bias and is not completely random, just mostly random: The distribution is almost lognormal but not quite. So those who can extract information out of mostly random noise will be able to profit. But it is hard work!
What are you going on about, honestly everyone in these forums are idiots, if you didn't get it covered everything including return, cost and risk then I'm amazed your profitable at all. Never ceases to amaze me how people try and credit themselves with other peoples knowledge, from my knowledge. That's my dose of being subjected to their forum stupidity for another holiday break, time for the antidote, generating returns, like you're trying to compare yourself to my experience, that's just too funny.
Maybe I should trust you on this one. After all, I was agreeing with everything but your measure of success. ...Also, "you're"