EOD traders/investors are targets of institutional analysis and manipulation. These institutions always screw majorities of individuals. They lobbied th PDT rules so that they can rip small investors as much as possible. It is ironic for them to say this is protection for brokers. It is ridiculous for someone to say this is protection for small investors.
"EOD traders/investors are targets of institutional analysis and manipulation. These institutions always screw majorities of individuals. They lobbied th PDT rules so that they can rip small investors as much as possible. It is ironic for them to say this is protection for brokers. It is ridiculous for someone to say this is protection for small investors." You kill me Q No matter what the subject...you find a way to get the PDT issue in there...I give you credit though, you are persistent....By the way, if you think manipulation is only in the EOD and not Daytrading, then as the great Gordon gecko once said: "your blind walking around with a cane pal"
Did I say that manipulation does not exist or exist less in the intraday than EOD? I didn't. What I meant is that in the intraday, you have better chance to protect yourself from manipulation. You can take larger profit when you feel comfortable and cut small loss when you don't.
ok, ok, don't get your panties all bunched up.. I apologize. You are correct though in that everything can and is manipulated in the electronic information age.
the other side of the argument is of course: 1) commission and slippage 2) the big IF as in if you can keep the same stat. as noise level is high intraday. The optimal trade frequency is then the balance point between the advantages of larger sample size and the 2 disadvantages above.
I think most non-pros choose a trading duration that makes them comfortable. I've hung out at some free paltalk sessions and noticed people going for 2 points with a 2 point stop. They probably don't even realize that they have to win 57.5% of the time to make $10 per-RT with no slippage and a $5 commission. Likewise, I don't think swing traders realize how much opportunity they're giving up. I think the proper balance is to add up all your costs per-trade(commission, slippage), and figure out the smallest timeframe that will allow you to make enough profit to make the trade worthwhile. Recent emini daytraders would've probably been wiped out prior to 1996 because of the small trading ranges, high commissions, and large potential slippage (calling orders in and waiting for margin checks to be completed before submission of a order to a pit). Here's a report I run that shows the opportunity within the SP market for various holding periods. The numbers on top are the holding period (1 = daytrade, 2 = in today - out tomorrow, etc.). The column next to it is the average range for the holding period for that year. Ex. Under 1 for 1995 you see the total points that could have been won was 1089 and the average trade was 4.3 pts. You can see how the market has changed over time. With today's 15 pt. ranges, online access, and low commissions it's pretty easy to see that daytrading is the best route. (although hypertrading for 1-2 pts. is not likely to be a high paying proposition). If the SP drops down to 1996 levels of 620-750 then we'll probably see a further contraction of the trading range and many of todays marginal traders will go out of business.
An excellent overall post acrary, one of the best I have seen for a while on Elitetrader (thanks, in particular for the .gif file)... on the point quoted above, it is important not to educate our competitors with knowledge on probabilistic expectancy issues... trading is hard enough as it is!!
Acrary, Is the "perfect trader" report simply a sum and an average of the daily, 2-day, 3-day, etc. ranges over that year? -blueberrycake
That report bears out what I see on my results of applying the same tech analysis but varying the timeframe. It mostly comes down to a percent per bar type of thing, the longer the bar interval then the less the profits over time, fairly obvious. The big question then is what is the shortest bar interval that is workable, or how often do you trade per day, because the commissions and slippage figure in much greater the smaller the % gain on each trade. Max
You can see how the market has changed over time. With today's 15 pt. ranges, online access, and low commissions it's pretty easy to see that daytrading is the best route. (although hypertrading for 1-2 pts. is not likely to be a high paying proposition). If the SP drops down to 1996 levels of 620-750 then we'll probably see a further contraction of the trading range and many of todays marginal traders will go out of business. _________________________________________________ Excellent post and research....very interesting too...Id be interested to see the performance ( or lack thereof) of the Mutual funds vs the Hedge Funds...for the past year only though. Thus could be the type of info big wall street firms don't want to get out.