OK I think I got it. Convexity has something to do with bonds. I don't know a thing about bonds except you're supposed to keep some in your portfolio to keep it from dropping to much in a market downturn. When the market or any stock I own starts to fall I go to cash. Problem solved! Thematic trend is investing in what's disrupting the market, what's the latest hot trend. By watching the charts for new highs I manage to find those stocks. Problem solved! Portfolio beta is how my portfolio compares to how the market does. I can't come up with an exact figure, because I fund my lifestyle with my trading capital. For the last 19 years I have managed to maintain a middle class lifestyle (I spend on me about the same as you spend on data) and still grow my liquid net worth by 6 times. Problem solved! My system took me out of the market in 2008 and 2020. I spend less than 1K per year for data. I should be at quite a disadvantage. If I have a definable edge it's having the discipline to follow my plan.
Not at all. Here’s an example. Say you have £1000, and spreadbet £1 a point on the Dow each day. You set a stop at 20 points. So your risk is £20 or 2% of capital. So first day the stop is hit and you lose £20. Second day you break even. Third day you win £20. Fourth day hurrah, you win £40 (still only 2:1 risk reward ratio). Total profit is -£20+£0+£20+£40=£40 over 4 days, or average of £10 or 1% a day. Repeat over and over, increasing your £1 a point day by day and eventually you will have your million pounds. The point of the thread is that this all sounds possible to the uninitiated, but the fact that most day traders are not millionaires means that it is probably not as simple as the example above might suggest. However the assumptions made are not that outrageous (until you try doing it), and if many traders on here were as successful as they say they are, then they would be millionaires by now.
Can you answer the question posed in the thread with a resounding “yes!” after doing this for 19 years?
That is exact 50% profit. Because you use 2%, and make 1%, so 1%/2%=50%. Yes, your recent example show you have losing days, but on average you make 50% on each trade. You probably never have any trading experiences, that is why you dare to assume 2% stop can generate 1% profit on average. In fact, if you set stop at 2%, average profit could be significantly less than 0.1%. I will give an example for FTMO funding challenge, which set a rule as maximum drawdown 10% and profit target 10%.If you make 10% profit in 30 days and don't break 10% drawdown, you will earn a funding account(as much as $100000). If one trader set a stop at 1% and make on average 0.5% profit, he will make 10% profit in 20 days.So it seems pretty easy for everyone to get a funding account? Not really. According to FTMO statistics, only 8% who play challenge get a funding account, and most of those who get funding accounts lose them in the next a few months. let's say you set a stop at 2% of your capital and a profit target at 1%. What will happen? For each trade if you hit stop you lose 2% and you hit profit target you make 1%. You will need make two wins for every one loss to just break even. That is impossible. There is no edge on that set up.
I don't 'dare to assume' anything about profits. If you set a stop at 2%, the average profit for most day traders will be negative, as most day traders lose money. It is just an example. I know that it is probably impossible to achieve. That is the point of the thread.
That was what you assumed. It was your assumption written in your first post. Winning daytraders have edges, but not as big as your assumption. That is why they have not become millionaire.