If you a profitable scalper, you should absolutely be profitable every month given the high volume of trades. If you take 500 60/40 trades in a month, it is mathematically improbable for you to have a losing month. The logic is less so for a daytrader who averages only 50 trades per month, but still unlikely to have a losing month. For swing traders and buy-and-hold investors obviously you can have a losing month due to variance from small number of trades.
That's 25 trades per day!! I'm assuming you would have that automated and no fees? Otherwise that would be excruciating...plus that would be $350 per day in fees!
Hence no free lunch. A good scalper is essentially guaranteed a smooth equity curve on a monthly basis, but tough to overcome commissions, and also bid/ask spread. Also scalpers have to compete with algos on micro time frame. Tough. Note that prop firm SMB Capital advertises scalping equities as the "easiest" way to make money in the markets. There is some truth to this. Because you find out right away whether you were correct in the scalp, so you learn very quickly the setups that work and those that don't. The polar opposite is swing trading, which is tough for discretionary traders to master because it takes days for you to know whether your trade setup was ultimately profitable. Slower learning curve.
It's simpler, people don't understand the value they're trading, a hedge fund at 20%pa on $1mil unit with 1&10 creates $10kpa fees excluding performance. Most people trading equities can generate 5%/10%/20%pa even with 1% training budget and $10k capital, but they try to generate 50%/100%/200%pa, which can be done but is rarely trained because of the notional value. This creates $25k/$50k/$100k notional value, with futures at 50x leverage and $20k capital would create $1mil notional value at 20%pa, training or fund management at that level would cost $10kpa maintenance which most people can't do. Most don't have $5k let alone ever seen 20%pa on $50k or 20%pa on $500k, it's actually 99.5% fail to make a living wage trading, which isn't $100,000s/yr, mainly because they create a real or synthetic notional value without the experience.
im shocked at the numbers you throw around for someone who has it figured out. 5k? That should be below rounding error for a market wizard as yourself.
Totally agree with this. Most of us traders have no real edge, me included. Looking back a few years examining my butterfly trading records, most profits were eaten up by 4 x commissions, bid/ask... net/net, wasn't able to beat holding SPY or QQQ, either risk adjusted, or on an absolute basis. Recent day trading experiment is a little better but it is a lot of work for a slight beat of QQQ. It is really not worth the effort IMHO. Psychology is a clutch, for if a system has real edge, simply automate it and throw psychology out the window will solve the problem.
My paper trade experiment on day trading supports your comments. Does that mean I have a real edge in my system, or is paper trade my edge?
I left IB for the very reason you mentioned..They wouldn't cut commish,and on a 4 legged,possibly 5 leg monster,in and out,it was just brutal
The reason is the early enthusiasm to some point if you ask me, and that ends up bumming you down after a few losses.