The NYTime article is crap. comagnum, I have a quick question for you. If when I trade an option,if I bought puts or sold calls to hedge a long stock position, how would you know if my option trading was profitable from any metric online? Maybe I only made money because the hedge allowed me to stay with the core position. Or, it limited my losses when I was wrong. And, if I bought an ITM call instead of the stock, and the stock tanked and the option limited my losses, how would any online study value my savings? Derivatives are more complicated than just getting long or short a stock or future. It is NOT a zero sum game and has a lot of value to active investors and traders.
Thank you. Well stated . Anyone saying day traders don't make money day trading is simply just talking from there experience . People need to stop tell other people day traders do not make money. Not true.
Yes that has been my experience. I had the money, knowledge and time to try it out using a range of strategies. One of which I even paid for! It didn't make me any money. My previous long-term trading experience made sure happily I didn't lose much either so it was worth the effort and risk on the times I have tried it. If someone is consistently making money day-trading and with limited risk I would never tell them to stop. That would be senseless, 100% wrong advice. But I 100% always always tell new traders who are not trading yet and have no experience in trading and have no day-trading record, do not day-trade. I figure 99% of the time I will be right to do so.
A career? Forget it, at least for now. Invest. WITHOUT FAIL, NO EXCUSES invest a large portion of your income. Set up a 401K or a Roth, whatever, depending on where you see your income level at retirement age, vs over the course of your career. But either one is better than nothing. Set the account up with a brokerage that caters to swing or day traders. Remember though, that there are some restrictions on how you can trade IRA or 401K accounts and TBH I don't know much about that, so you need to do some research. Anyway, put the max in every year. This is extremely important, and is orders of magnitude more important while you are young and struggling than later when you are comfortable and have more bucks to invest. The magic of compounding makes the money you invest at 30 about twice as important as the money you invest at 40 or 45. A good goal for now is to build up your investment portfolio to the point that the earnings will support you in retirement. At 30 you are starting a little late, but not so late that it isn't worthwhile by any means. Keep working. Don't give up your day job, as they say. If you can free up your mornings, from about 0900 (market opens at 0930, but you need a glance at the premarket action) to 1100, you could day trade on a paper account while you study. Learn how the markets work without risking actual money. Maybe invest in ETFs, and slide your assets back and forth with the market, between bull and bear funds. That way you keep earning when the market is in decline. Stay away from leveraged funds for now. This sliding gives you an opportunity to look for good entry and exit points, and gives you hands on experience placing orders and watching your portfolio. Sort of a hybrid between swing trading and investing. To support a family by trading, with a 4%/month return, wow... let's say you need an income of $3k/month. That would be $75k in your brokerage account, and that is not even considering taxes and other expenses. Better figure $100k for your trading stake. And your 4%/month can certainly be done, by an experienced, knowledgeable, and disciplined trader. Which you are not, yet. Odds are hard against you ever becoming so. Not putting you down... it's just the percentage. Depending on whose stats you are going by, 80% to 90% of new traders fail to make it. Talking about some fairly intelligent and hard working people, simply not making it. The odds are firmly against you. What would you use for funding? How much is available?
so... if a newbie comes ask a question of 'how'... you don't just answer with how lol... newbie doesn't know what he doesn't know, so 'dont do it' is also a valid answer. 20 years and several $m profit later, ask me if I'd do it again.... I am actually not sure... I wish 20 years somebody could tell me 'dont do it' and lay out the reason.... yes I accumulate now, but I started with day trading.. and mind you it was so much easier in 1999-2002 with that volatility and no robots.... in today's environment with robot infestation and normalized volatility, my advice would be a definitive 'NO, DONT DO IT'. the opportunity cost is huge... following the 'saving calculator' there is a clear passage to success after which OP can actually live like a king in Thailand.. it's not just a matter of 'starting small, trade futures'... OP would be lucky to fail quickly and realize investing is the way to go.... worst case scenario is he gets stuck for 5-10 years, has nothing to show for, then start to invest, now he's years behind, 5-10 years he could have to live like a king, wasted pointlessly... plus if he goes to Thailand at 60 instead of 50, that is not only a difference of 10 years, but also 10 years he'd likely still have stamina to enjoy life fully. if this were a real estate forum, I'd definitely encourage a newbie to go at it, considering real estate makes the most millionaires in this country.... Trading.. is a waste of time... now... perhaps, after 20 years he has million'ed, and is already sipping from a coconut in Thailand, with the portfolio producing $50000 per year but he only needs $30000 to live on, then that $20k residual can be played with for short term trading.... at that point opportunity cost is already out of the question, so yeah, have a go at it.
Robert - I clearly stated trading options outright, not as a hedge. I provided evidence of the published study on options traders, you have not provided a lick of proof over your claims - instead your now totally twisting this around to using options as a hedge. This is what I wrote on my original post in this thread: Your at least 10 times more likely to be successful trading equities & ETFs than trading options outright. A better man would have apologized for calling me a liar about the published study ... still waiting. Now you call the published study crap. Not surprising coming from a broker which has a completely different set of motives. Options & futures are fine instruments for well capitalized & highly experienced traders, in the hands of novices the vast majority churn through at an alarming rate. My motivation is to try to help the newbie stay in the game long enough to make something of it.
Accomplishing any type of high paying success fails 90% of the time. 90% failure in trading is bullshit. Get good advice and trade.
My best advice is don't do what 90% of new traders do. Which comprises day-trading plus trading reversals plus chasing high leverage. If you are doing these things and making a consistent profit, keep doing them. But in that you're not asking for my advice and I'm not giving it to you. I speak to the new guys who aren't trading at all yet.