If you look at my original post on this thread you will see that I did not achieve this number in 2002, due to an unfortunate experiment with futures ( thanks for that universal conversion IB ). 10,000 a month is less than 10% a month on 120,000 BP, which does not make anyone a supertrader.
Put it this way if you can do between 5k and 10k a month on a 30K cash value, using 4 times BP, my hats off to you, and I have seen a lot of people struggle to do 30k a year off a 30k account value. There are a lot of laid off Mid Management types with small severance packages that are looking to do that. If you are doing that I say PRESS ON and teach others, its good for the entire industry, the more successful confident traders out there the better.
The average trader LOSES. the above average trader breaks even over time although they may have hot streaks when it seems they can do no wrong. The really good traders crank out a consistent net profit nearly every month regardless of market action, and they have realistic goals. If somebody told me they are AVERAGING 33% a month trading I would certainly not believe them. Even 10% a month AVERAGE is excellent over the course of a year.
I have been profitting for the last 3 months only because I made a commitment to cut my losses and not averaging down. I should make more than 3-4k per month on a 30K account but once in a while I still make this mistake so that is something i need to work on. The swings are not like the dot.com days but there are still so many trades to make during the day. I average about 5-10 trades per day. On the trades that I could sit and watch, then I go bigger shares 500-800, if not, then 250-300. I definitely think with hard work, it can be done. I used to learn a bout the market for 15 hrs per day for more than a year before I am comfortable enough to use that knowdlege to setup my play book. Knowing what's working and what's not. Now I can't wait til the market open each day to trial out my methods. good trading,
When the "Pattern Day Trading" rules were introduced, I predicted that many daytraders would be out of biz....if you wanted to call them "Daytraders". Many of these so-called daytraders did not have the balance requirements to keep their accounts in active trading status. In my opinion we must define what a daytrader is. But I do not want to get too far off the subject. The Futures industry was inundated with new applications from those day traders-to-be who could use their small amounts of money and leverage themselves to oblivian. You see, PDT rules did not apply, and hey!.....$50.00 a point with the SP E-Minis with much more ACTION! The Futures markets will shake out the losers and have, as unlike the stock market it is a "zero-sum game" (excuse me for calling it a game). For every loser there is a winner, is what I mean to say. So it comes down to this......You must be better than average to trade successfully. If you could not day-trade stocks successfully...then why would you be able to daytrade Futures? So the instrument is not the answer......Now consider this. Day-trading was basically scalping from the beginning, utilizing and trading from different exchange differences by using high speed computers. Today when you ask someone what daytrading is you will get a variety of answers. So, again we must define not only what a daytrader is, but also what daytrading is. Being that MY perspective is being asked for, here in this thread, I will not try to define these items but only to report. My perspective on Day-trading, as I know it, is if one wants to enter this field, then his/her motivation must be longer term and the same as starting a career. Remember we used community colleges for that when we left high school but that is another subject. If you want to be a daytrader.....you must set aside the connotation of quick money....and put in the time. This is a very challenging profession for me, and frankly the hardest, most challenging job I have had in my life. You must treat your job like a business, so if you are against entrepreneurial endeavors...then stop now. This is a business, like any other business. Now, with daytrading and other sole proprietorships you need a balance sheet and income statement and all those necessary accounting statements. In your quest for profit, I have noticed a pattern that many try to follow. I do not want to sound like a know-it-all, but would welcome any corrections to what I am about to say: 1) In most business cutting expenses is a very good thing as it produces higher profits usually. 2)In most businesses increasing revenue at a higher percentage than increasing expenses also produces higher profit. IN DAYTRADING THIS IS NOT NECESSARILY THE WAY TO OPERATE YOUR BUSINESS. Without writing a book here in this forum lets agree that we are at a disadvantage from the get-go by sitting in our living rooms relying upon the internet, instead of phsically, being on the trading floor. This goes for stocks or futures. The QUALITY not the COST of your tools will effect your bottom line more than anything else. You can be the greatest trader in the world and not realize your full potential by concentrating on getting the cheapest tools. So many of you spend countless hours trying to discover who has the cheapest feeds, charts, platforms, commissions. Yes, this comes natural to us...."more for less" mentality. But time is valuable.... so spend it wisely. I admonish you to search for speed in execution, fast reporting back of fills, and ease to use trading platforms (one or two click executions for example). You will need to have 3 tools: 1) online brokerage account. 2) a data feed from a tier 3 providor such as E-Signal or Real Tick 3) a separate stand alone charting program...such as Investor/RT or Ensign. If you are dead serious about your career, you need to become a sort of evaluator of the many tools offered to you over the internet. You will develop a feel for this..if you try as many of them as you can..." side by side" if possible, you will develop this intuition. You will learn the correct questions to ask when interviewing these various tool vendors. I listed a few above as I personally have interviewed/used their tools. I am sure there are many other to evaluate and try. Remember....the statement "if it works don't fix it" IS NOT TRUE IN DAYTRADING. Changing character of your tools, the market, and the instruments you trade causes you to become a chameleon sensing your enviroment and listening for change. Do not become lazy or comfortable in your career. Not only does the environment change and is in flux as we speak, but the instruments that you trade in for the revenue you ae seeking often change character rendering your system worthless. You will need hardware as follows which will effect your profit: 1) P4 with high speed Internet 2) multiple monitors with a good 2D video card (Matrox, Radion, or Appian) 3) Window's 2000 or XP pro 4) 512 mb Ram. You will need to keep a daily trading log, 'kinda like a diary". You will find this one of the most valuable tools you have. How to format it would be off topic so perhaps other threads, forums can help. So.................There are a small few PROFITABLE, and CONSISTANT daytraders out there with a track record to boot. But very few. Try to learn from them, gather your information as precious gems. Avoid laziness and stay creative. Look always for that changing character and learn to recognize patterns. Stay healthy, exercise your mind and body. I hope this helps and contributes to this thread.....There is so much more to write about, but perhaps others here can contribute. Michael B.
Everyone keeps mentioning that for every loser someone is winning. This is true, but most of the time it is the SPECIALIST or MMs! So while it is possible to make money in this environment, people that made good money in the past are making less (if anything) now, and the percent of people making any money now is down dramatically. And while the specialists and MMs are probably not making as much as they used to, they are still raking it in. When you lose, the winner in all likelihood is usually the SPECIALIST and MMs!
In futures for every winner there is a loser. In stocks there are specialist's and mm's who use the the spread. Michael B.
For any time frame, I think the day traders will make out the most because he's using the big institutions to get his profits. If one or two big firms want to unload a position, they can hide all they want, that stock will go down. And the same thing would happen on the upside. By jumping on this wave, the day traders is taking profits of these mutual funds. It's like the insects that is eating food of the elephants with commissions/ spread being so low, it's such a great game that I would not want to be anywhere else. of course u have to put in your time first before u can enjoy the rewards.
But when the institutions hide the orders, you don't know if you are buying the top, the beginning or the middel (and visa versa for selling). Plus, if the institutions place orders and pull them for awhile, then again you don't know where you stand if you bought/sold, and if you're wrong, you're waaay wrong. I'm glad if you are one of the few who can reap big rewards.