I agree with the stats in the report. remember "emg" who said "they just lose!"? I also believe there are those who stick with it and could become part of the tiny % that actually can make a living wage from daytrading. Just that they're usually not public much less selling a trading course or educational product. Kind of like a competitive individual sport like tennis where the top few thousand can make a living at doing it with at least healthy satellite or challenger tour performance, but only a few will ever make it or continue to sustain it for a full time (paying) career to some degree.
As a broker who observed/ observes many clients over the years, I can share that traders who try to combine diff. strategies do better overall than those who are strictly day-traders. Examples maybe day traders who also use weekly options or swing traders who add diff. option strategies etc.
Hi Ilan, if I may ask, and this is by no means targeted at your firm, but the retail brokerage biz in general, is the say average holding period a significant (or not) contributing element to retail profitability? How prevalent is spread trading compared to outright amongst retail clients? Again, only interested in the general retail sector, not your firm. Thanks,
Excellent pointers! Not much spread trading if at all among the retail part for us, over 60% of what i consider pro traders do use spread trading with us. Also from the retail part not many will do HFT "properly" and use too much discretionary trading where one can easily decide to break one own rules.... So yes - your question/ comment is excellent because just for example the two factors you mentioned can help separate the success rate..... Obviously there is more to it like the tools you use, who enforces the rules you need to follow, trading costs....
That's interesting! Based on what I have seen first hand in the softs trade, merchant houses are by definition basis/spread players. This is the bread and butter, the very core of the business. Buy physical sell forward, and views are taken on relative value, ye olde basis trade. There were some trade houses/exporters that were punting outright and took huge bets which went sour eventually. So I personally think, trading spreads can be very attractive and looking at the margining structure at the Merc, they can be incredibly capital efficient and by extension low volatility plays.
Do you have statistics within your company on how profitable were your company's clients who day traded? Thank you for your answer in advance.