Do you really think daytrading is here to stay? The late 90's were an abberation. If you were trading then, and did well, you were in the right place at the right time. I know there are several individuals that have been daytrading for decades, but as a whole do you really think chosing daytrading as a profession at this point has a positive expectancy? It seems as though most of the people in "bucket shop's" are just hanging on. I know there are people in every bright/echo/andover office that do well, but the rules and the volatility back to the mean, keep making it more difficult. It seems like a futile effort at this point. You can only squeze an orange so hard until there's no more juice left in it.
There have always been "daytraders" of some sort. Jesse Livermore used to "daytrade" in bucket shops that were "instantaneous" fills, although not truly representative of the market. Specialists and market makers are another form of daytraders. Liquidity (and volitility) is enhanced by daytrading. Personally, I don't have too much respect for those high flying traders who made their millions during that .com bubble. What's that saying? Don't mistake bulls for brains or something like that. In a bull market, it doesn't take skill to make money because it floats all boats. If you can survive through a secular bear market, you can make it in a bull. There have always been daytraders in some form or name. Technology has made it possible to do it from home, as opposed to say inheriting the position like a specialist or purchasing a seat on an exchange. Those are all forms of daytrading.
Sure it's here to stay. It never went away. Just a lot of people wash out. I don't see it as futile. If you're willing to work, are disciplined and manage both your capital and trades effectively you can succeed. I'm no genius and I've been doing this 7+ years.
If I may ask, what is your trading style? What have you done over the past seven years to be successful - has it changed much, or is it pretty consistent with what you were doing in the beginning? Thanks!
I miss trading, which is why I probably lurk around here even though I've already moved onto another career. If you can succeed during these times, imagine how well you'll do when (or if) it becomes a better environment to trade. I traded for almost 8 years and did well for myself. I spent the last year and a half treading water and dipping into my savings. I didn't lose money, I just didn't make any, and lost the opportunity cost. I definitely miss the lifestyle, but FOR ME, I couldn't imagine continuing to live in a state of flux, not knowing whether or not I'd make or lose money in any given month, let alone any year. During my first few years trading, we traded in 1/8th's (NYSE equities). It was like printing money, it was so easy. Then when we switched to 1/16th's, all the old timers thought that it was the end of daytrading. Most people were able to adapt because it was the late 90's and the market was crazy. Then in 2000 we switched to decimal's and margins shrunk even more, but now instead of having the volatility of the 90's, reality was setting into the market and everything began slowing down. Nowaday's as soon as a news story comes out, every daytrader is in a mad rush to be the first one in, and it's basically survival of the quickest, and fittest. It's like a passerby tossing some crumbs to a large group of pigeon's. Not to say it can't be done anymore, but I think the odds are much more stacked against pursuing a successful career daytrading now, than at any point in history. Like I said earlier, there will always be people that could succeed in this environment, but unfortunately I wasn't one of them because I definitely do miss it.
I'll be honest and say that's what scares me. I'm doing pretty well now, but the stories I hear about the old days make me reach for Rolaids. I dunno that I am ready for those huge swings. . .
E-minis, man, e-minis! The spread on the S&P500 or the Dow almost makes it "like printing money." I'm definitely glad I made the switch. No dealing with specialists or getting pennied to death. Just you, the machine, and everyone else out to take your hard earned cash from your cold dead fingers. I've practically dropped stocks altogether except a few that I've also stalk and know pretty well.
Yes, but Jesse L. made the great majority of his $$ on longer term positions. I'm no Jesse L. to be sure --- in fact I DO close the great majority of my positions by the close. At this exact point in time -- daytrading is a challenge. In my trading I'm leveraged to the point where my balls sometimes protrude from my mouth -- but I stay 98% faithful to my stops!! In the late 90's it was normal to rake in $5,000/day. Now, we're happy with half that! (Any less than half that per day and I would be doomed to "woik'in 'fo 'da man" every night and day"). Cheers, Dog
The point would be that Jesse L. did make money, and make money consistently, at daytrading. He didn't make homeruns in those bucket shops, but certainly what he did there and what can be done today electronically are the same thing. He had to adapt to a different style of trading when taken out of that environment and prohibited from daytrading. Ideally, I would like to build my account such that I could daytrade one account in my normal intraday style and the other a trend following system that while having a low accuracy, has a correspondingly high reward-to-risk ratio. One account would put food on the table and the other to make you some big ass $$$.