Why not daytrade??...to each his own right...I like the thought of knowing on a big gap either up or down I'm able to trade with the specialist(who by the way are daytraders). I also like the freedom of starting each day fresh not having to manage trades that were blindsided by some news or analyst action..thats my preference. Yes daytrading allows you to trade bigger,but that doesn't mean you are undercapitalized. Personally I can't stand the thought of watching a stock move against me by more than 40 -50 cents max...It would kill me to sit and watch a stock moveagainst me $1 or more...I guess that means daytrading is what suits me..so hopefully I'm more relaxed and think clearer and more concise.
The "logic" of daytrading actually made sense during the incredible days of the NAZ 5000+. Not today or even after the NAZ crash. when vaporware stocks moved 50 points in a day and gapped up 10 at times - not holding positions overnight made sense. I am afraid those arguments don't hold true in 2003. P.S. Also try to trade 1%-3% risk to total per trade and it does not matter if you hold it 1 day or 55 weeks.
You are right about the gap ups for sure..no 10 pt gap ups these days..but the gap downs can still be pretty big. First of all I'm not trying to argue anything...just don't like to see someone put down daytrading just because it doesn't suit them. I read all the posts from swing traders complaining about a choppy trendless market and I wonder why they don't daytrade..opportunity always abounds in the daytrading venue..just not late 90's style daytrading which allowed many poorly trained traders to make some money for a while. I never have to come into a trading day wondering if I will get setups, I have multiple opportunities each and every day. P.S. Most of my setups come from classic swing trading setups, I just choose to only daytrade the setup.
Lets see - downside overnight risk versus ~$100k-200k paid in annual commission.... Well yes it is a good hedge. I am not putting down daytrading at all. I have done it and I even liked it. I have scalped for 1/8 and 1/4 and I thought I was sitting on the top of the Empire State Building. I am more down on the Prop firms and the propaganda that is spewed and defends it's 'ideas' as it 'used to be' . Don't get me wrong we all do what we like - it is after all OUR money... However what we like is often NOT what is best for us. (I used to say that to heroin addicts when I did volunteer work). Trade currencies at unregulated firms, bet on shares off-shore it does not matter to me. I just feel that there is a very strong current on ET that is pro daytrading and it is often masked as the individuality of the marketplace as it was the freedoms that we are about to defend in Iraq. individuality is different from lose and willful exercise of ignorance. P.S. Maybe these days the markets are not tradeable at all? See another day fight another battle....
I'm not sure I understand #1 and #2... 1) A lot of daytraders are just people who don't sleep well at night with open positions - less time in market = less risk - from some people's perspective. Also if trading is their primary occupation then maybe they just want to work everyday. I'm not sure capital has anything to do with it. A lot of traders swing-trade because they don't have adequate capital to daytrade ( PDT rule?) which requires more size to work well ala Nitro. I think ya got that one backwards. 2) Many would argue that swing or position trading is much more of a gamble - unknown factors like political event risk or sudden news events can hammer a swing or position trade before that trader has a chance to respond, especially if they don't monitor positions daily. Ask anyone holding MSFT stock on last Friday. Also, most swing or position trading requires more risk/looser stops and more time to find out if it was a good trade - this sounds riskier than a tight intraday stop to me.
Obviously the bubble was much better for daytrading, but your statement is much too broad. Daytrading is about small consistent wins. Trading has to pay the bills. There is plenty of opportunity still, you just have to know where to look. It seems you gave that up a long time ago.
I broke into this game in early 1999. My first stock trade was RMBS at 140 thru Suretrade. I daytraded then and I couldn't even read a chart. I used RadarScreen, put up the Nasdaq 100, and the stock that moved to the top in pertentage gain was the stock I traded. One fateful day I got into MSTR, and held overnight, I figured I would be a millionaire by July of 2000. I knew nothing of going short, or options, or tops, or bottoms or any of that. Commisions didn't matter, what was 9.95 a trade with Datek( It was cooler than Suretrade) when I was making 800 an hour? I think the top was in March, I got in at something like 600. MSTR got some bad news, and the stock fell 200 points in the premarket. Of course I held on. That was my first blowout. Then I got blownout on RMBS, QCOM and JDSU. Finally, almost broke, I decided I needed to sit down and learn something about trading. I found Connie Brown, who led me to Gann, who lead me to Murrey, and now I wish I had known then what I know now. I am a swing trader now. Overnight gaps don't matter to me because I have learned risk management. The stress is almost zero. I don't have to sit in front of a PC all day. I look back and wonder why I ever daytraded, staring at the level 2, hanging on every tick.
like I said, I have no problem with the guy who says - look - I daytrade cause I love the action, I make ok money so stuff it. Fine I say. I just can't stand the 'industry'. The daytrading firms are just stooges of the big boys in reality. They are the mouthpieces that say the same thing like Vegas does. It is ok, it is fun. someday you win - some days you lose. Behind every daytrading firm there is a clearing 'relationship' belive it or not it is a very strong contract and almost a make or break to any daytrading firm. If the clearing firm want you to be open you get funded you get discounts, you can spend some money on promotions and marketing like ET. Actually, I did some preliminary legwork/negotiation with SLK for a friend of mine about a clearing contract a while back. Look at ET it is almost entirely funded by daytrading firms. Barron is nice - keeps it free for us - so I can speak my mind. It is very appropriate for Bright to be in Vegas. In reality I'l like to encourage anyone do some figuring and see how much they are paying in commissions in 2002.