People don't realize it takes time and proper and deliberate practice to become efficent at this craft. It must be apporached with the mindset that a professional athlete does to their respective sport. In addition, it has gotten harder over there years between their being too many people in the business as well as tons of new hfts our edge has diminished. However, that does not mean there is still not an edge you need to look in the right places and carve our your own. Honnestly, I think the best approach for anyone is to attempt to mimic how a market maker trades and to move beyond a scalpers mindset of making tons of trades a day if thats what you consider daytrading and focus on one good trade. If you can focus on making that one good trade and take what the market gives you, you need to be humble enough to cover or get stock off when the market tells you. When I finally put it all together it worked for me however it was a long three year journey. You can let people discourage you or you can do what you desiere. If you want something bad enough you can acheive it if your willing to put the effort in. I will say it wasn't easy and involved alot of tears as well as almost beleiving thoes nay sayers.
1. We accumulate information--buying books, going to seminars and researching. 2. We begin to trade with our 'new' knowledge. 3. We consistently 'donate' and then realize we may need more knowledge or information. 4. We accumulate more information. 5. We switch the commodities we are currently following. 6. We go back into the market and trade with our 'updated' knowledge. 7. We get 'beat up' again and begin to lose some of our confidence. Fear starts setting in. 8. We start to listen to 'outside news' & other traders. 9. We go back into the market and continue to donate. 10. We switch commodities again. 11. We search for more information. 12. We go back into the market and continue to donate. 13. We get 'overconfident' & market humbles us. 14. We start to understand that trading success fully is going to take more time and more knowledge then we anticipated. Most People Will Give up at this Point as they Realize Work is Involved 15. We get serious and start concentrating on learning a 'real' methodology. 16. We trade our methodology with some success, but realize that something is missing. 17. We begin to understand the need for having rules to apply our methodology. 18. We take a sabbatical from trading to develop and research our trading rules. 19. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute. We start trading again, this time with rules and find some success, but overall we still hesitate when it comes time to execute. 20. We add, subtract and modify rules as we see a need to be more proficient with our rules. 21. We go back into the market and continue to donate.We go back into the market and continue to donate. 22. We start to take responsibility for our trading results as we understand that our success is in us, not the methodology. 23. We continue to trade and become more proficient with our methodology and our rules. 24. As we trade we still have a tendency to violate our rips and our results are still erratic. 25. We know we are close. 26. We go back and research our rules. 27. We build the confidence in our rules and go back into the market and trade. 28. Our trading results are getting better, but we are still hesitating in executing our rules. 29. We now see the importance of following our rules as we see the results of our trades when we don't follow them. 30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear) and we begin to work on knowing ourselves better. 31. We continue to trade and the market teaches us more and more about ourselves. 32. We master our methodology and trading rules. 33. We begin to consistently make money. We begin to consistently make money. 34. We get a little overconfident and the market humbles us. 35. We continue to learn our lessons. 36. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size. 37. We are making more money then we ever dreamed to be possible. 38. We go on with our lives and accomplish many of the goals we had always dreamed of
There is a difference between 3 years trading on your own, and 3 years trading with a million dollar mentor on your side... think about it.
I've only been day trading for a little over 2 years, but I believe all you need for consistent profitability is a small edge and the ability to exploit it with pure discipline. The edge can be something as simple as a reward:risk ratio in your favor. Let's say you trade stocks and through analysis and testing you find a certain price setup that results in a 1% directional price move within the next hour 50% of the time. 50% doesn't seem like an "edge", it's more like a coin toss. But what if were able to trade this setup every time it occurred AND you implemented a risk management strategy that limited the loss on each trade to significantly less than a 1% price move against you? Now you have an edge. You take all setups that meet your criteria and end up with, say, 20 trades in a given week, with a profit target of 1% and a protective stop of .5% (2:1 reward/risk). If your average win rate of 50% holds, you have a very profitable week. Let's say the market was a bit choppy all week and you only manage a 40% win rate. You're still net profitable. Let's say even more of your setups failed and only 35% of your trades reached target. Still net profitable. A system like this requires trust and discipline. You have to have enough trust in the odds to trade every setup and you have to have enough discipline to let the stops and profit targets stand without moving stops further away when they're about to be hit and without taking profits too soon when price gets really close to your target. Geez, who's been trading for many years, demonstrated the power of this strategy right here on ET with live trade calls (no cheating there) in what I consider one of the best threads here: http://www.elitetrader.com/vb/showthread.php?s=&threadid=148752 There was a day when 5 out of 5 of his trades were stopped out at a loss, but that meant nothing in context of the bigger picture (a gain of well over 100% that year). The reason for his consistent profitability is that a day with 5 out of 5 losing trades did not affect how he traded the next day and the day after that and so on. He stopped posting in that journal when it started getting spammed, but continued to call all his trades with stops and targets in a trading chat room, and a friend of his reactivated the journal this year and posts live trades as well as charts end of day.
The single most important thing when talking to people is to make sure you are talking about the same thing. For example, "Daytrading" to some guy that traded in the early 2000s means something completely different to someone trading BlackBox HF today. Same time frames, vastly different edges. I recommend that you start a new thread, perhaps with a more focused question. The more focused your question, the more scientific the responses can be. Asking broad open ended questions makes for big threads, but results-wise, it is one huge time drain and you will learn nothing. Of course, if your question is too direct, like, explain in detail your edge, you will get no answers. So there is an art to asking questions well. Your original question is ill-posed.
A few thoughts for the opening poster. How many stocks exist on the Nasdaq and NYSE? 8000 tradeable ones at least. How many of them do you need to trade a day? 1 How many set-ups do you need to take a day? 1 Now, go and find that one good trade There will be one out there for you every day, whether you trade breakouts, pullbacks, consolidations, reversals or anything else. It will be there, so go and find it.
i took the liberty of altering your post,hopefully your mindset......trading is a series of bets,the difference between trading and gambling is you can take your bet off the table quickly, imagine you bet 500 on a monday nite football game,you will win or lose that amount once the bet is placed,in trading you could take that bet off the table ten minutes into the game for a $30 loss or gain,so it would stand to reason that if you got good at placing bets and recognizing your mistakes early, you would have small losses and big winners,that is a huge edge,your attempt at manual,semi automated and fully automated trading may have been premature,if you spent the last three years watching how the market moves,via charts, correlations between corresponding markets,you would have seen several slow moving patterns by now,once you've spent any time trading,it is nearly impossible to get it out of your system,so go ahead and stop for now ,park your cash and build a new nestegg,try to recognize those moves ,see where they started and ended before and try to trade their repetitions, learn to read charts.,notice where it's headed and might stop..you may have been looking for an easy buck and experimenting with the wrong things