Trying to be a trend trader is almost impossible if you start the day flat everyday. Many people try to use the same tools that they use on a daily chart ... on a 2-minute chart. Stock index futures ( es, nq ) are too choppy for that kind of trading. If you're going to be a daytrader, use daytrading tools ... not trend trading tools.
Huh? Are you regurgitating some swing trading guru here? Why can't you start flat every day? Why can't you use "trend trading tools" (whatever those are) intraday? It's exactly the same thing on a shorter time frame. --opm8
Well the minority who are making money stand out from the 'suckers' for several reasons. Lots of people just don't have the personality, work ethic, or whatever kind of mojo that makes the winners win. Daytrading has been around forever and will always be around. It's just that some people have a warped perspective of what daytrading is, based on a 5 year abberation in the late 90's. There's nothing wrong with the game, unless you are one of the ones who don't get it. I know many guys who fire up their machine 10 minutes before the open, then leave right after the closing bell, and that's all they do. Hey, wake up call! The business is getting tougher, your competition is getting smarter and working harder and they are always trying to find an edge against you. It's a fight for survival and everyone who's making it knows it's a fight. The ATM machine was turned off a long time ago. If you don't have the drive to stay ahead of the curve, your days as a stock daytrader are numbered. Just one (hardworking, profitable) daytrader's humble opinion.
People complaining about how its getting tougher - it's the same game it always was - greed/fear, and people trying to make money. The creation of ECNs in 1997 and start of electronic trading available to everyone in the 90s, along with steadily declining commissions have been great for daytrading. SOES, SUPERSOES, NYSE auto-ex, Electronic index futures markets, etc.. These have made it possible for people to make a living trading. Most people fail, but not because it's tougher now than it used to be, it's because they are chasing edges that are not really edges. Many are misinformed, greedy, and lack the knowledge and experience necessary to win consistently. This whole thing about the markets are getting tougher is sour grapes. The money is out there to be made, just like it always has. Granted, decimalization has been a setback, but bear markets are not bad for daytraders, even non-trending markets are not a bad thing, you just have to adapt your style to take advantage of it. It's called trading - do your job and quit bitching about how it's not 1999! I know people who study charts all night - and lose all day. I work from 9:30-4 and that's it. Only time to make money is when the market is open! Most of this chart studying is a waste - it's simple - trade what you see - trade the price action while the market is open. Why do I want to put in 16 hr days? Might as well go get a real job!
Why look at charts all night??? The markets not open after 4. Maybe they lose money because they are studying charts at the wrong times.
I agree, that it's still possible to profit in the current environment, but will hazard a guess that those complaining are not well funded, and/or are on thin ice. This market is not ideal for either situation; my sense is that those who are prospering are well funded, and "don't need to make money" as a primary daily goal. They have the benefit of clarity when approaching the current markets, that those who are marginal don't. My advice is to those marginal traders is that maybe it's time to reassess why you are doing this...maybe it's time to move on. David
I would agree but only to a point. I think that most daytraders think that every day is a trading day, and that is where they screw themselves over. You need to trade when there is an opportunity, and have the discipline to just scratch yourself or something other then trade when there is not. Sometimes there will be 10 or more trades to take in a day, other days there will be 2 or less..maybe none. Those that fail to realize this are losing before they even start. Another thing is that risk managment and being able to really capitalize when the market moves well (Trend days). Most people in Market Wizards have stated that the majority of their gains are on about 10% of the trades and days they trade. There is some long periods of "dry" trading in between that sometimes. Brandon
People always complain. In 1999 and 2000 people wished for the glory days of 1998. Most traders will never make money and they don't want to take the blame themselves for not doing it-so to them its always an "impossible" market, and there are never a shortage of chatrooms and people on msg boards to concur with you. That said the market more recently has been more difficult then before in that it does not forgive mistakes. A few years ago you could screw up 80% of what you did and still make a bundle of money. Now, if you are making any mistakes you are likely to get smacked for it. Brandon
Alpesh Patel, a day trader and FT columnist, says ... "The popularity of online investing has held up to the extent that Patel says he still receives inquiries from people who want to quit their day jobs and trade. "I point out the work in terms of research, analysis and monitoring they will need to turn £100,000 into £125,000 in the course of a year," he says. "The hourly return is lower than someone working in MacDonald's."