Actually the papers he mentions in the video are very encouraging: Linnainmaa (2003, 2005): 30% of daytraders make money Jordan and Diltz (2003): 36% of daytraders make money Choe and Eom (2009): 25% of daytraders make money Kuo and Lin (2013): 19% of daytraders make money Now you want to shift the goal post to, well daytraders can make money, but they make less than an index fund. In the video he cites the paper Barber (2014) for his 1% figure. If you actually read the paper, it doesn't say 1% of daytraders beat the market in any year, it says 1% consistently beat the market over a long time. So that means there are a lot more daytraders who beat the index one year, lag the index the next year, and on average earn about the index. Yeah sure they invest time and energy which could have been spent elsewhere, but that is a separate point. Also, the paper has quotes which are very encouraging: "But luck is not the whole story. Our main result documents the presence of statistically and economically large cross-sectional variation in trader ability. In the average year, about 4,000 day traders are able to predictably profit net of a reasonable accounting for transactions costs. Specifically, we sort investors into groups based on their day trading returns in year y and analyze the performance of each group in year y+1. We document that only the 4,000 most profitable day traders (less than 1% of the total population of day traders) from the prior year go on to earn reliably positive abnormal returns net of trading costs in the subsequent year. But, the stock picking ability of these investors is remarkable. The top 500 day traders (based on prior year ranking) earn gross (net) abnormal returns of 61.3(37.9)bps per day on their day trading portfolio, while the tens of thousands of day traders with a history of losses in the prior year go on to earn gross (net) abnormal returns of −11.5 (−28.9)bps per day." Bottom line is, most daytraders fail, but if you good, you gonna make bank. Is it worth it for people to try daytrading? I don't see why not, esp if you open a $2,000 futures account to trade micros. You learn on the cheap. Sure trading requires time but so does anything: swing trading, opening a small business. By that same argument, most small businesses lose money, and they could have just put the money in an index fund, so no one should try to open a small business? I wonder if that rando youtuber will make a video about: why you should never open a small business. I won't hold my breath as that video wouldn't be as clickbaity
I highly doubt any day traders are making consistent profits...maybe scalpers with the proper setup, but not if your only trade plan is enter and exit the same day regardless. The biggest problem is getting continuously stopped out eating into profits where it would just make more sense to do a swing trade. They should do a study showing profits left on the table from missed rallies after closing at eod, or getting stopped out ---> versus losses avoided from closing at eod, or getting stopped out...I would guess that missed profits>avoided losses.
My brother has a friend whose father supported their family by daytrading (stocks specifically). The father tried to teach his son. I think the son daytraded for about a year but couldn't master it so he moved on to a regular job. This tells me daytrading is not just technical analysis, unless you have an algo.
Still, not a bad suggestion, really, given the current climate? The church certainly has its share of problems, at the moment.
Really? I find TW to be pretty good. Its charts is clear and feature rich. I especially love its scroll forward button that takes you instantly to the most recent bar, really handy when you are backtesting. And their scripting facility is another very useful feature that you don't see very often anymore from many of the platforms. It doesn't require you to learn another language and yet is powerful enough for you to program your own indicators and strategies. It's in many ways even better than Thinkscript. I just wish its compiler is more robust and consistent. TW is really good. If you do a lot of chart trading, it's well worth it imo.
Which is pretty good. If you go on morningstar, more than half of the mutual funds there make negative returns. And only a few of them make positive returns consistently and majority of the ones that are making money are the passive index funds and these are professional funds managed by the professional money managers. So comparing to that, daytraders are not doing too badly. I know this professional portfolio manager who's a CFA charterholder and everything and her niche is "bottom up" value investing and her strategy is finding undervalued gem and then invest in them for long-term gain. She manages this small cap value investing fund in this boutique investment management company. For 15 years, that fund has never earned a positive return, never. I followed that fund since its inception. The best return that it's earned is -20%. And she goes onto morningstar all the time giving interviews and etc. and she even cited that year with the -20% as that fund's best year. LOL Finally about 5 years ago, she quit that firm for personal reasons. There was even a big announcement made about her quitting and etc. And that fund has several hundred million's of dollars in its assets. Imagine we daytraders have that much money to trade and make that kind of losses each year, we would've quit long time ago and we would be so ridiculed, ostracized and humiliated like you wouldn't believe. And yet just because she's a professional, trading opm (other people's money), she gets to get away with it. I tell ya, comparing to traders like these, we retail traders are not doing too badly. Don't let those statistics discourage you.
Yes but the biggest advantage of daytrading is you can put on size you wouldn't dare with swing trading. Many times I have done 1 NQ on a daytrade, risking 50 pts, so $1,000 risk. Targeting at least 100 pts, for $2,000. No way am I holding 1 NQ on a swing trade. At least given my small capital. Maybe it all evens out since swing trading has smaller position size but targets an even larger move.
Wow... Just off the charts... Wow... That she got NO flak for 15 years while she managed a LOSING portfolio.. This may be because of the: "You go Girl" times we live in. Or is this true of most losing CFAs ? This is like Cathie Woods... Multi millionaire with ETFs that have crashed beyond belief. Do you know how much she was paid for her small cap investing position over 15 years. ? I have done a number of difficult professions in my life... and Trading... long term or short term... is by far the hardest. Bar none for me and many of the other successful professionals I know and have talked to over the last 20 years. My 2 cents: What makes trading insanely difficult is always (for every trader) being ambushed by Redic Fat Tail trades out of the blue that go against them. (Like the 24 point sell off we just had in the SPY/SPX in the last 2.5 days after weeks of 2-3 point sideway days made on low volume & low vix. Now you can also include the Short squeeze rally today that went up about 14 points to its intraday high after crashing down 7 points from its overnight prior close. Or the COVID sell off... etc.