Long term Trader versus Intraday Trader which is profitable?

Discussion in 'Professional Trading' started by Daxakar, Dec 11, 2007.

  1. Daxakar


    Hello guys,, I am new to this forum. I traded in FX and mainly Major pairs

    Just hope to find out which of the above are u guys. I personally had 2 accounts with same amount of capital. 1 for day trading and the other for longer term trading. I found that longer term trading makes me more $$$ and without much of my monitoring. Whereas day trading, it takes up like 8hrs of my time at least just to monitor!!!!! YET I am loosing money. Maybe I am weak at TA, but it really piss me off with me buy LONG and result in SHORT and vice versa......

    Initially I took of day trading, thinking that I could make a million bucks with it in 1 years or so,, apparently I am so wrong!! Pls if there is someone who does day trading and are successful, give me a post.

    Longer term = 2days to 1month
    Daytrading = <24hrs
  2. For me, same as u, i find intraday trading too volatile, too shorterm, that winning is little or even worse, losses.

    Whereas so far, more than 2 days trading give me my income
  3. BJL


    hi, I do a bit of both.

    I trade futures on a long term scale (3months and up) and local equities an a short term scale (15mins - 2 days).

    last year was very good for long term portfolio, this year was very good for short term plays.

    I started out doing only the short term stuff, but I found it took up a lot of my time just like a job ;), so I decided to move some or all to a longer time frame to be able to enjoy the sunny days in summer.

    Right now, I think I will keep it balanced between the two approaches. One change I made however is that I don't trade all days the short term stuff, only on volatile interesting days and don't care if I miss a good day because I have other plans.
  4. candymr2


    Long-term trading will always be more profitable -- it is for me anyways. Typically, I hold positions anywhere from one day to three months.
  5. JJ2


    If you have good setup(s), and are disciplined about quitting when you are ahead, manage your capital well and know what your goals are before you even sit down in your seat you can do very well as an intra-day trader.

    Longer term position trading has its associated types of risk (overnight gaps) but in general it requires less skill, less attention to detail and more capital to do successfully.

    Good trading,

  6. As jj said. Short term has greater potential for profit simply because you can take X% risks much more frequently.

    But the shorter decision making timeframes demand a lot more from the trader. If you can't give it then you won't get it.
  7. You are trying to compare two incompatible items.
    This may account for your poor performance in the intraday.

    As has been mentioned already, the potential for stellar intraday profits based on a relatively small brokerage account balance is huge.

    Long term trading requires deeper drawdowns and larger account balances more proportionate to the risk.

    Just two completely different things really.

  8. Daxakar


    Thanks guys :)

    At least i know where i am getting at. This Daytrading really brings out all my emotions!!!! When i lost a trade, I even try to fight back either double my initial amount traded or chase after a breakout, which usually cost me more $$$. Maybe its just my strength and weaknesses, I am not up to it. For the time being I am back to Demo on daytrading, to practise and fine tune my skills.

    Thats why I resort to longer term trading, whereby I could have my cool to analyse and study the market. Even with longer term trading I will try my best to avoid traps such as important economic annoucement when I am not sure what would be the possible out come.

    (OMG.... speaking of which I just witness GBP/USD falling from 2.0430 to 2.0370 and risen back to 2.0460. IMHO this should have wiped out lotsa daytrading positions, where their STOPS are around 30pips.) And this is why I say I stop my daytrading...
  9. From what I've read I think you are making the right decision.

    In general, to me, it is a question of capital. If you have $15k in capital and even if you are the next coming of Warren Buffet or whatever - able to earn like 30% a year - you will be hard pressed to turn that into meaningful money. Even with 20 to 1 prop firm leverage.

    If you go 20 to 1 on your $15k - you can't really have more than a 4% drawdown in your pursuit of your 30% return. And then, you'll have to pay interest on most of the difference between the $15k and the $300K you are using.

    If you are a good scalper or intraday trader, however, it is not out of the question to average a net $300 a day on a $15K account.

    So your 15K yields about $75K.

    Obviously, whatever short-term scalps and techniques you are using at the $15K level are not likely to be feasible at the $1.5mln level. Forex may be different - but with stocks - the larger your orders get, the smaller the universe of "unbudgeable liquid stocks" gets.

    So a person with only $15K almost has to day trade (or take very timely short-term overnight trades). If you have the capital to make a living off of long-term moves, then you should try to come up with a day trade approach that goes in the direction of your long-term positions - if you bother to daytrade at all.
  10. P.S. - Some equity firms will only offer 20 to 1 overnight on "hedged" (balanced long vs. short) positions. So you would have to make your long-term return in that fashion.

    For flat out naked longs or shorts, however, most equity firms top out between 5 to 1 and 10 to 1 overnight. So I guess that just underscores the point.
    #10     Dec 12, 2007