making the big bucks

Discussion in 'Professional Trading' started by FastandFurious, Aug 3, 2006.

  1. it seems that a lot of people in my firm day trade by scalping. While there is nothing wrong with that but I see scalping as just an income when you add up the various overhead costs and commisions. It seems that to me it doesn't make sense to risk 5 cents to make usually 5 cents back (even that sometimes, is questionable), and the risk/reward ratio isn't as attractive.

    My question is, how do you millionaires make it? I have a friend who trades, and he said he made most of his money by pair trading.
  2. not scalping?

    Thats my best guess since I'm not a millionaire and is a scalper.
  3. Obviously, 80% of ET'ers are multi-millionaires (just read through the threads).

    If you hang around here for a few weeks, you too can go from making $0-$400 dollars a day to making $50,000-$150,000 dollars a day just like NYSEkiller and some of the other ET traders.

    Best of luck.
  4. definitely, any one who is "accomplished", were you pair trading, fading, forex, scalping? How do you make 10 grand, 20 grand a day.... how big were you losers as well, and in what time frame did it take you from 0- well...a million +, most important of all, any advice?
  5. ddunbar

    ddunbar Guest

    The big bucks go to position traders. It's as simple as that. Why? Because they can take much larger positions. And they can pyramid to a much larger degree than daytraders can. Money goes to money. Daytraders are limited by liquidity. They can only do but some much size per trade. They can't meaningfully scale in and out. Position management is limited since their time frame is limited.

    Position traders also have to be mindful of liquidity. The larger your size, the longer your time frame. The longer your time frame, the more you need to be correct given that you now have less opportunities for profit.

    Of course, not everyone can start off as a position trader. And daytrading isn't for everyone. Sitting on your bum all day long, playing clickety-clackety with your mouse and keyboard, staring at screens all day long... So a happy medium is to swing trade. And to find instruments that lend themselves to swing trading. (Fair to medium volatility.) Swing trading is a natural segue to position trading. Swing trades can last a few hours to several days. But it sets your mind and psychology in the proper order for holding trades overnight. One of the most essential aspects of position trading.
  6. If you want to accumulate capital quickly then you need to be a successful "high risk/leverage speculator"

    If you want to make a nice income then become a successful "market maker(aka scalper)"

    "I can't tell you how it came to take me so many years to learn that instead of placing piking bets on what the next few quotations were going to be, my game was to anticipate what was going to happen in a big way."

    ...Jesse Livermore
  7. the more I think about it, I can't afford to scalp. I pay $8 per 1000 shares, and if I trade a million trades a month, I get $5 per 1000 not to mention other costs. Scalping is important as many other forms of trading uses scalping skills such as order execution speeds, reading the tape on support/resistance levels, etc...

    But I didn't get into day trading to just make a living, I want to accumulate capital and be wealthy. Some of my friends pair traded and has done very well. In fact, they made most of their money that way. The risk to reward ratio for scalping plus overhead costs makes it very difficult/impossible to go for the big bills as money management is simply out of the question in those 5-10 seconds.

    I know there will be huge win days, and loss days but just like scalping, if you trust your plan, and perfect it as you go, the loss days will get smaller, and the huge win days will be more prominent.

    I am looking into pair trading and I especially like the market neutral feature of the strategy.
  8. I think the important thing about position trading is to know what the news has said about your stock in the past, and what their predictions are for the future.

    All I can say is, its going to be interesting to see how this mess about Apple turns out (gulp) :eek: .
  9. Scalping is a "diversification" trade is a productive way to gain extra volume to reduce commission rates, while at the same time providing an additional income source (for a futures trader).
  10. The big money is of course in the big swings, at least that's the easiest money. But scalping can be very profitable providing you've got the talent and get rock-bottom commissions.
    #10     Aug 4, 2006