Risk is always there in any trading. If you are on it, you must have the risk appetite too. It is essential to know the right time to enter and exit the market controlling your greed. Trading is like a roller-coaster ride, it has its ups and downs, and you cannot win all the time. You need to accept your losses and continue trading.
Just to sit there and work, isn't that funny. Non the less, it's a necessary part of the process. But to discover how the machine works, to gather all sorts of data, based on weird questions that you came up with, to find out those answers, that will give you the so wanted edge, - that sounds exciting. And the best part is the progress, when you look back to the point A (where you came from) & compere it with the place that you're in today. An adventure. Ignoring the Dunning Kruger effect along the road, cause each 3 to 6 months, it falls upon you, yet, a new discovery is about to be made, right beside the corner. The sealing has been breached and you move into another level.
Even though i am a daytrader myself, i disagree. As a day trader you will eventually run into liquidity issues. As a long term trader you can take on much bigger positions since you can buy or sell over several days or even weeks. I don't think there are any daytraders that earned billions by doing so, yet there are quite a few famous investors who became billionaires. Not to say you can't make a lot of money daytrading, you certainly can.
Why are you then daytrading instead of long term investing? You could be making billions? What you say only applies to very rich people. You said yourself “a few famous investors who became billionaires” I am speaking about the real situation of the average ET member. 99.99999% will never run into that liquidity issue. Most of them will have more risk to run into a negative liquidity issue in their account. I hear and read that positions till 1,000 contracts ES are filled without any problem. From all the daytraders worldwide maybe 0.1% will reach that level, so your remark is irrelevant as non existing for almost any daytrader. I need less than $1 million margin to trade positions that can generate $25 million. Can you make 25 times the invested capital in profits a year as long term trader? No. On top of that I can start very small, so ideal for most people. To make billions as a long term trader, you need billions as margin or leverage are almost non existing. And the frequency (how many times you can turn around your capital each year) is massively smaller. So you need much more capital to generate the same position size and/or profits. If I would add forex, the liquidity issue will only appear if you trade positions that run into the hundreds of millions. Daytrading stocks, to me, makes no sense. Their performance is far to limited. Again mostly due to leverage, margin and frequency. Just do the math for daytrading futures ES: · Starting capital: $5,000 · Profit per day: 5 points · Compounding till max position: 250 contracts (which is far below the liquidity issue from what I hear/read) · Margin: $2,500 per contract · Period: 1 year Profits will reach over $13 million. Now show me how you make, as long term investor, $13 million profit with a starting capital of $5,000. The real question is: CAN YOU MAKE CONSISTENTLY 5 POINTS A DAY?
You said daytraders can make 10-100 times more than long term traders, than simply isn't true. Your math is really nice, the only problem is 99.99999% of all daytraders will never achieve that either. It wasn't a question about margin, how much capital one needs to start or about the odds of success, it was about who can make more money and long term traders or long term investors definitely can make more than daytraders. If you disagree, show me a real life example of a daytrader making more money than big investors or long term traders, i can give you plenty that make my case for long term trading/investing. According to your math that should be easy, no?
Your explanation is really nice, the only problem is 99.99999% of all long term traders or investors will never achieve that either. So what you tell is complete useless. You are dreaming. If you see things thru the eyes of 99.99% of all people who invest or trade, the only viable solution is try to become a good daytrader as they will make faster more money. Most traders have a rather small budget, not millions. If you don't have millions to start with, you will be dead before you will be rich as long term investor or trader. If they succeed in being consistently profitable, the chances to be soon a millionaire are much bigger than the possibility that they woul become a billionaire by trading or investing long term. I have hard proof of that but will never show it. I never show my accounts or trades. I gave the example of daytrading the ES. It took me around 10 years to become consistently profitable. If I would have invested the same amount in longterm, my actual capital would be more or less the same as my annual profits from daytrading are today. So in 1 year I make now more money each year than the total result of years of longterm investing. LOL. You don't even understand that how much money you make depends on margin, starting capital, leverage and frequency. All these parameters have an impact on how much you make. So any discussion is useless. If longterm is so good, why are you daytrading? Your behavior is just opposite of what you are saying. According to your arguments, you should give up daytrading because you are blocking yourself to become a billionaire. I gave an example from which you told that the math was nice. $13 million profit should be 10-100 times more than the result of the longterm investor or trader or my statement is not valid. To proof my statement invalid, the longterm investor or trader should make with $5,000 starting capital between 2600% and 26,000% return to proof I am wrong. Not a single longterm investor or trader ever did that. So I am right with my statement. On condition that the daytrader makes 5 point consistently a day. I make the mentioned 5 points consistently a day average.
Oh year right, i am dreaming, mister 1000 ES contracts, starting capital $5000 and over $13 million profits . You gave a completely unrealistic hypothetical example. Also, were did you get the $5000 starting capital, that was never mentioned here or a requirement in the equation until you made it one. I didn't expect otherwise. Making more money has nothing to do with % return. Good luck getting 2600% or 26,000% return on a multi million dollar account. And you say i am dreaming? Time to wake up boy. Damn, this guy is delusional. I am out of here.
Your saying 5 points per contracts per day 252 tradings days this year How many losing days do you expect in a year You need to average well over 5 points a day on winning days to maintain a 5 point daily average
I know how to calculate expectancy. So I know how much I should make to keep net 5 points profit per day. I said you should make 5 points net a day average. So that includes winning and losing trades. You cannot win so you put words in my mouth that I never said. This is what I said: So 250 contracts maximum. Not 1,000. Proof me where the calculations are wrong or unrealistic. Condition is make 5 points net per day. And based on the parameters I gave you will reach 13MM. You never answered my question: If longterm is so good, why are you daytrading? Your behavior is just opposite of what you are saying. According to your arguments, you should give up daytrading because you are blocking yourself to become a billionaire long term investor/trader. You are delusional.
You are so stupid that you don't understand anything, read things that are not written and mix up everything. Ask someone with some brains if he can explain it to you in very simple and basic language and if possible without any math. Doubt he will succeed. The 2600% or 26,000% return has nothing to do with the daytrader. The 2600% or 26,000% return should be made by the longterm investor/trader to reach the same profit in $$$, not in % return, of the daytrader who makes 5 points net a day on $5,000 capital. So the fact that these returns are according to you crazy confirms that daytrading makes more money for the majority of people. To become a billionaire longterm investor/trader, you need tens of millions of starting capital and 30 years of investing/trading. For over 99% of all traders that is impossible as they don't have that starting capital. So they will NEVER become a billionaire.