This is an article on how us nasty daytraders are mostly wiped out. Heh heh, good riddance too! http://www.sfgate.com/cgi-bin/artic...archive/2002/07/12/BU119674.DTL&type=business
Great comment that 70 % of day traders will not only lose but will almost lose everything they invest. If they are day traders they are not investing. Seems like the author has a case of sour grapes...
I wrote a rather long email reply back to this article....PM me is you want it...I may post it, I havemt decided yet...
Alright, heres the email I pounded off to this guy....realize the basic explanations necessary to a non initiate of our world I have had to make.... After reading your article on day trading, I have a number of issues with some of the main points you argued. As I day trader, I realize I am potentially biased. I am a proprietary trader, trading a firms money for its, and my profit without having to put anything up myself. Anyways, day trader and investors are complete opposites!!! One statement you quoted confused day trading with investing...these are completely different. Schwab and a couple other companies you mentioned are simply not day trading firms, but are discount brokerages that sometimes advertise that they cater to 'day traders'....bottom line, they have a confused vocabulary. 300 trades a month?! Just an example of my day today.....I made 348 trades today, totalling 1.6 million shares and made a few thousand (US$). Anything under at least a hundred in a day is really swing trading, not day trading. Finally, day traders are doing better than ever. News of corporate fraud on CNN in the evening makes us traders feel warm and fuzzy inside as we imagine how we will play the gaps down in those stocks the following day. Any news is good news!!! I will give your profession that!! Volume and volatiliy (two things historically lacking during the months of July and August) get a puff of nitrous from any news, good or bad. Day trading is a zero sum game. When we make money, it is in such a short time frame that someone is losing nearly the same amount. Who? The average investor, investment banks filling large institutional orders, mutual funds, even you. When I am short (and have already made money on it), and your mutual fund has to cover by selling, it pushes prices down further, and in effect, I am taking some of the losses from that fund, and putting it in my wallet. There is no bias long or short. I am just as happy to push a stock down as I am to prop it up. Whatever pays the bills, so to speak. I thought yout article was well written and interesting, however, day traders are doing better than ever. Until volume and volatiliy dries up, we will do fine. Most of the public doesnt even realize what day trading is, and doesnt realize we make just as much shorting as we do going long, and do each about 50% of the time. So when someone asks me how my portfolio is, I laugh and tell them it only exists for a few seconds at a time. And I love it, for those few seconds, I am truly alive. Sincerely, SilverBullet
Good Job on the Trading Bullet!! And here I thought my 50+ trades on Tuesday was way overboard ( still do)
1, It just depends on your style, and your time horizon. Put it this way....trading at a prop firm, I pay no commissions, and no fees per share/trade whatever. All I pay/get in that respect are ECN fees/rebates. BUT, if I were a retail customer of a firm like Bright or whoever else, I would trade with a longer time horizon, because I am getting dinged a lot (half cent per share or whatever). Imagine 1.6 million shares at .5 cents a share = 800,000 cents = $8000!!!
You have some quick fingers there. 348 trades a day is approx 1 trade for every min and 12 secs that passes. So what type of setup do you see that's worth trading every min or so? You also said Now if I do 99 roundtrips a day and have everything closed out by 4 PM and my average hold time is less than a 1 min on each trade, I'm swingtrading? I tend to define day trading as making as little as 1 roundtrip a day and making sure I'm flat by the end of the trading day. If it is held overnight then I'd say it was more swingtrading. Just my view on things.
Geeze, you are fast. I do about 50-150k shares a day and I feel like I'm going nutz if I hit 200k shares in a day.
oh man - we are so so bad. we are the reason for all the evil in the whole wide world. has the naive (moronic?) public not yet realized that most of the money that the oh so holy investors lose is cashed in by the investment banks and their market makers - who do exactly the same as all the other private daytraders? and don't they know that even for every investor's gain there has to be somebody who loses on the other side? this ongoing shit makes me soo tired. in my opinion it is ABSOLUTELY inadmissible to make ANY difference between investors (who hold maybe for ten years) and daytraders (who hold maybe for ten seconds). what is the reason of taking part in a market? making gains. nobody buys a stock for any other reason. nobody is better than the other one. the only bad guys out there are those ceo's that get paid millions of $$ for their kinky way of making business. being a private and independent daytrader is maybe one of the most respectable and honest jobs you can have these days in this crazy world.