One of the reasons I like Position Trading

Discussion in 'Strategy Development' started by Buy1Sell2, Apr 18, 2006.

What kind opf trader are you?

  1. I am a position trader

    132 vote(s)
  2. I am a swing trader(overnight)

    136 vote(s)
  3. I am a day trader

    207 vote(s)
  1. Less commissions--My brokerage house doesn't get as rich off of me. I get more profit per commission.
  2. Thats who makes the big money and has lasting trading careers. :)
  3. A combination of all 3.
  4. Do you mean position traders or brokerage houses?
  5. Not sure if I'd qualify as a position trader or swing trader. In reality, I think I'm a long-term (months) big swing trader.
  6. I think people draw a false distinction between a "day" and "position" trader.

    Let's say that using quantitative analysis...
    You determine that a $25.00 stock is $0.50 "undervalued".

    So you buy 2000 shares at $25.00

    You can wait 2-3 weeks for the stock to revert to "historical norms"...
    And make, say, $0.40 in 12 trading days = $800

    Or you might get the chance to flip the stock for $0.08 in 30 minutes = $160

    But in the 2-3 hypothetical weeks it takes the stock to "revert to norm"...
    You can probably do that flip 5-10 times.

    So it's actually not very clear... what is the optimal time frame to exploit quant analysis.
    Your expected return is about the same no matter what time frame you use... with 2 caveats:

    (1) Your psychological makeup should dictate scalping versus position trading.

    (2) Low transaction costs enhance scalping... high transaction costs make position trading mandatory.
    With zero transaction costs... scalping is far more profitable.

    Bottom line... a good trader should employ an optimal mix of scalping/position trading.


    :cool: :cool: :cool:
  7. i mean position traders, brokerage houses make money no matter what :)
  8. I work with about 100 futures traders, 99% are scalpers. Every year one or two clear a million after split, commisions, etc. Its never the same traders year after year. They catch fire one year, the market is ripe for their strategy but the next year there is some incremental change in the way the mkt flows and they are finished, can't adapt. Now flip it around and look who has accumulated wealth in the markets. A scalper is limited, he can only make a finite amount of money. You can only trade so big if you are scalping. Its just a fact.
  9. rhymes-what exactly do you mean u work with a lot of traders?as a broker? as a trader who is among the ones that is still around and by default a very good trader? if u are the latter congrats you are in rarefied air. Interesting points about scalping though
  10. No, I'm a trader in a futures prop firm. As for my trading, I just started two years ago, profitable but nowhere near big money. These are just the observations of someone trying to go the opposite way of everybody else in the office. :)
    #10     Apr 18, 2006