If you are a day trader with a persistent edge, are you a millionaire yet?

Of course.

However, give the same LOSING trading system and the same capital to a day-trader, a swing trader and a position trader and the day trader will simply lose his money faster than the swing and position traders, because he trades much more frequently.

Some idiots use that as a "proof" that long term systems are more "profitable" than day-trading systems.

In reality and in this example, they are not more profitable, they simply lose at a much slower speed (because they trade less often), thus giving the illusion that they are... superior!

In fact I defy anyone to prove that long-term systems deliver superior results than day-trading systems, all things being equal (same starting capital).

 

How would you do that?

 

Via a backtest of course.

Long-tern traders have to prove that they can make more money than a day-trader, using the same trading system and the same starting capital.

They are free to use ANY backtestable trading system they like.

Any takers...?

 

what's the strategy? I run the backtest on my bloomberg

 

Here is your proof - Mark Minervini is an equity swing trader leading the contest competing with >300, beating options & futures traders with a real acct >$1M. He has won before in 1997.

Nothing against day trading - I do both myself so not biased. It's not very easy to beat a good swing trader in a market on the move with all the ON gains.

 

You didn't give any indication what is his annual % profit.

The fact he beat options & futures traders doesn't prove swing traders are generally make more money than daytraders.

One Japanese is taller than a few American doesn't prove Japanese are generally taller than Americans.

 

Yes I know Mark Minervini and his track record.
However, beating other traders at some trading contest is not a proof that swing or long-term traders make more money (from the same trading system) than day-traders.

I backtested a few trading systems on different time-frames, from the 5-min to the monthly.

Day-trading (5-min and 15-min) was always the big winner, money-wise.

If swing trading or long-term trading were indeed superior, you think I would waste my time with day-trading?

 

Can you think of any reason for this except that I assume more trades from a day trading system. If your system has a positive expectancy you would expect day trading to out perform.

How are you computing position size with your tests? Are your risking the same amount per trade with each type of trade?

I've done both and found that there wasn't a significant difference. What I like about swing trading is the amount of time I can spend doing other less stressful things.

 

If you were to measure labour hours, (energy expended), day trading would underperform imo.

 

And that's exactly the case.

Of course, otherwise the backtests have no meaning.

You can automate the buy/sell signals and let the computer trade for you if you like.

But yes, you have a valid point, to some extent.

Swing or long-term traders can also spend the entire day looking for their winning trading setup, on hundreds of financial instruments.