Discussion in 'Trading' started by Steven W, Mar 6, 2018.
if you have an edge there is predictability.
if you don't it is gambling
wrbtrader is correct, through the years as it is getting to almost a level playing field if you are able to adapt more than before, getting harder to keep getting what I am use to making. Even when I had to phone into the pit floors, was easier than now Scalping, back then point worth 10 times more and commission were much less compared to value of a point. It is like when stocks traded in 16ths and 32nds-I traded IBM for 5 years in the 90s and did well, when exchanges switched to pennies-poof couldn't get filled as I wanted and then system collapsed in a week, had to find a way with futures. What I see much more now, even through exchanges want more volume, to make it you have to hold longer amount of time to score decent. Times of me holding for 1-2 ticks, just getting filled without HFTs making market jump 2 ticks then waiting for 3 tick retrace so I get my limit order through is vanishing. I been after to front run some HFTs by keep adjusting overall HFTs pattern identifying, but I don't want to spend my lifetime each day what new quants they added then quickly reprogram automation. And if you trying to scalp manually, don't even want to think about this. Automation allows you to look at all futures regardless of live cattle to Indexes.
What most in this Post keep repeating is winning percentages and don't see any? on losing percentages, 8 years ago for various reasons went other direction of getting losing %s as low as you can go, cause scratches you are losing money if you didn't make a tick and then that is a winning trade. If you having 30-65% scratches, you are losing big. I would say that most who lose in a given month of higher amount of signals are losing more cause of the fees than actual losses, I see most lose $40 a day in fees, so they lose $800 a month in commissions and not adding even the data, internet, your lost time doing a job that pays by hour or salary.
Making money one day out of ten, no way of doing this for a living and chances are you continue will be bankruptcy, you have to figure a way to lose much much less. And in penny stocks, in 40 years I knew of one guy who did well in pennies but he was long term and had out standing network of friends in tech stocks, when he made his goal, totally quit.
Patterns most don't understand is all we have to go by unless you day trading based on fundamentals and even a coin flip could be considered looking for a pattern. You might say you waiting for a retracement to so and so EMA or Hull or clouds, but you waiting for a pattern to develop. But in penny stocks, and I tried them long ago, it is very much throwing darts blindfolded.
One or the other for scalping, you do many many trading signals for 1-3 ticks and concentrating on keeping one tick most of the time and risk 1-3 ticks, man you will go fricking nuts and have no eyes or hair left in few years, highly stressed and end of the day you are wiped out of energy after ten years-I know. Better to go with more minutes on average of staying in, you can add more signals in the direction of new trend as in buy higher and sell even higher but less minutes in the trade and dump 65% of position as less target, keep runners for bigger profits.
Also, what you are trading, you should consider switching, cause one day exchanges will make smallest change and what you think you can do, won't be there.
The first three posts on page two are all great answers, on this subject.
I can offer only a couple of minor points ...
Very few manual traders profit every day.
However high your overall win-rate and trading-frequency, you're always going to have the occasional day when (for whatever reasons) you trade less often and have an unlucky run, both on the same day.
But there are doubtless a very few people who have a losing day only a couple of times per month (i.e. more than 90% profitable days), and those traders may well never have a losing month at all.
For most people, contrary to the misleading impression given on many websites, in many forums, and even in some "textbooks", the problem isn't "longest losing runs": it's "longest losing patches" and the number of consecutive losers they work out, overall, as being equivalent to. For most traders, these losing patches (sometimes of very significant drawdown) are going to be around 5-10 times as frequent as a long run of consecutive losers.
What matters is to have worked out in advance at what point you'll scale down and/or stop on the grounds that "it isn't working any more".
Key concept: the lower your overall win-rate is, the harder it's going to be to distinguish between "just an unlucky run" and "a real system failure", when things start going badly ... but that's something you have to be able to do, and reliably.
Win-rates below about 30% can be problematic, to many people, for this reason - however good their edge/expectancy.
====Do daytraders profit everyday?===
well, find regular job, and those frustration will be gone
Trying to make a regular income is what keeps killing me, I can casually trade and do okay, but the extra pressure of income causes pain every time, he says trying again
If your over all making $$'s then don't worry, anyway to optomize your method to improve the win rate ??
The "80/20" rule applies to trading.
80% of your profits come from 20% of your trades.
80% of your profits will come from 20% of your time. Rest of the time, it's a grind.
80% of your losses will also come from 20% of your trades/time. Which is why traders should be ever vigilant about preserving capital.
I think it applies to most independent/retail traders, most of the time, but certainly some of the situations discussed in this thread are among the instances where it doesn't.
The closer one's style of trading is to "scalping", the less likely it is to apply: it certainly doesn't apply at all, for example, to high-frequency, high-win-rate trading with a fixed target for every trade.
Yes, I was just thinking of blokes like us. That HFTs are profitable on a very high percentage of trades isn't all that relevant to us screen jockeys. (I can't fathom trying to tic-scalp the stock indices.... "risk 1 to make 2"? "Risk 2 to make 4"? Too noisy for that, IMV.)
it does not
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