Day trading for a living/career?

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Windylotus
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Re: Day trading for a living/career?

Post by Windylotus » Sat Feb 10, 2018 12:57 pm

You should read "The Millionaire Next Door".

KlangFool
Read it, great book.

staythecourse
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Re: Day trading for a living/career?

Post by staythecourse » Sat Feb 10, 2018 1:02 pm

I think folks on here have been very kind and PC. I will be a bit more blunt. Day trading is just dumb. Great if you are using other's money and getting paid for it to boot, but just dumb to do with your own money. Day trading is just an ultimate form of speculating. Just like any other speculation, i.e. gambling, real estate speculation, art speculation, etc... it simply is a dumb move to do with your hard earned money. It isn't like you drive down the street and go, "Hey there is an empty lot and I think I have an idea that no one else has had so let me buy it to flip it". If you don't do that then WHY would you even think of doing something that MILLIONS more folks are trying to do the exact same thing as you with the EXACT same info. that your have and think you could be any more successful with even LESS experience.

Here is the equation you are proposing: NO experience+ Same to less knowledge+ MILLIONS of competitors doing the same thing= BEING POOR!!!

Good luck.
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mffl
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Re: Day trading for a living/career?

Post by mffl » Sat Feb 10, 2018 1:18 pm

JoMoney wrote:
Sat Feb 10, 2018 10:30 am
I've seen people make it work for awhile, but my impression is that most of them were "picking up pennies in front of a steam roller". They had a strategy, but nothing that could be shown to have a positive expected value. In my estimation the strategies usually boiled down to overly complex versions of betting against the trend (hoping for mean reversion) or betting with the trend (hoping to catch a momentum streak)... and in the process betting more and more assuming more and more risk hoping to make up for prior losses. Leverage or synthetic leverage through options was usually needed to make the relatively small movements more meaningful, but that also amplifies the cost of the spread giving the market-maker middle men an even bigger edge over you. Sooner or later the expenses (some explicit, some hidden), the lack of a real advantage, and bad bankroll management / risk control, would come back to bite them. Be careful about fooling yourself into thinking you're winning, when you're really just putting yourself in a position to take big risks with bad odds offered (likely negative expected value).
Right. I'm with you on the steamroller analogy. When trying to beat the market, people inevitably come up with strategies that have some non-zero chance of losing all of your money in a single day. The most enticing ones are the ones that seem to give either consistent returns and/or consistently above the market returns for days/weeks/months on end. But, since the chance of losing everything is non-zero, and you can't see that coming ahead of time, you will end up losing it all. Look no further than traders of XIV this last week. Trading on low volatility for quite some time now has given lots of people opportunities to come up with consistent money making strategies. And then all those people lost everything on Monday.

Also, why do we give the "big boys" and "money makers" so much credit just because they get faster trades in or know more stuff or whatever? You can read Wikipedia articles for days about MIT grads and white papers and banks and scientific research and whatever who started funds that were guaranteed to make money or reduce risk. Staggering numbers of them have failed. These guys either take low enough risk that they routinely underperform the market and are saved by the fact that if they do so by small enough amounts, they can plod along for decades since the long term market trend is upwards, or they take enough risk that the "lose it all" risk goes above zero. Then it works for days, weeks, months, or even years.... until it doesn't, and they've lost everything.

Cost matters. Why would this cease to be the case just because you became a day trader? The smartest guys out there, the"big boys" we're saying we can't compete with, they just all lose to the market too in the long run (and usually in the short run).

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Re: Day trading for a living/career?

Post by Fallible » Sat Feb 10, 2018 1:36 pm

Windylotus wrote:
Sat Feb 10, 2018 8:30 am
...
My question for this thread stems from, I have the opportunity to meet and speak with a successful day trader who makes his living doing this.
...
I think with an aggressive learning period and watching and learning from someone who is successful at it, one could possibly have a shot to be a successful day trader. ...
If you are saying you plan to learn day trading from this "successful" day trader, then be sure to have proof that he is successful and truly makes his living, a decent living at least, from it. If he is successful, he should be willing to provide the proof. You seem to be basing a significant change in lifestyle on this person, so at least go into it as well informed as you can be, eyes wide open.

Is your wife also on board with all of this? Does she understand the enormous risks involved? Are there other things you could be doing, other ways to spend your valuable time with less risk and more reward?
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JoMoney
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Re: Day trading for a living/career?

Post by JoMoney » Sat Feb 10, 2018 1:39 pm

mffl wrote:
Sat Feb 10, 2018 1:18 pm
...Also, why do we give the "big boys" and "money makers" so much credit just because they get faster trades in or know more stuff or whatever?...
To some extent, because SOME OF THEM really do have an advantage, and when you are trading against them it's like a hidden expense. The market makers literally set the buy/sell spread to guarantee themselves a profit on every trade, and there are people with faster/closer connections to the exchanges that can essentially front-run your orders potentially adding in a little more. It costs a lot of money to get that kind of access, and there are probably some that don't recoup the expenses, but as far as I'm concerned, most investors would be better off if they traded as little as possible, approach the market with trepidation, do whatever buying/selling is needed to get their portfolio aligned with their plan, and then STAY AWAY. The idea of "day trading" is antithetical to that.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

mffl
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Re: Day trading for a living/career?

Post by mffl » Sat Feb 10, 2018 3:08 pm

JoMoney wrote:
Sat Feb 10, 2018 1:39 pm
mffl wrote:
Sat Feb 10, 2018 1:18 pm
...Also, why do we give the "big boys" and "money makers" so much credit just because they get faster trades in or know more stuff or whatever?...
To some extent, because SOME OF THEM really do have an advantage, and when you are trading against them it's like a hidden expense. The market makers literally set the buy/sell spread to guarantee themselves a profit on every trade, and there are people with faster/closer connections to the exchanges that can essentially front-run your orders potentially adding in a little more. It costs a lot of money to get that kind of access, and there are probably some that don't recoup the expenses, but as far as I'm concerned, most investors would be better off if they traded as little as possible, approach the market with trepidation, do whatever buying/selling is needed to get their portfolio aligned with their plan, and then STAY AWAY. The idea of "day trading" is antithetical to that.
Agreed, except that even then they still lose to the market on average. Would be hard to make a living that way if you didn't start with millions of dollars, and even then it would underperform compared to if you'd just left it alone.

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sergeant
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Re: Day trading for a living/career?

Post by sergeant » Sat Feb 10, 2018 3:22 pm

My neighbor sold his (inherited) successful business about 20 years ago for near 15 million dollars. He puttered around for a couple years, bought a boat, bought a house at the river, and went out for lunch. He disappeared for a few weeks and his wife told me that he was inside the house trading stocks.

A few months later he emerged back into the public, sold his boat and river house. He went back to work and his wife started working in the office at a nearby school. She told my wife that her husband had lost everything! :shock:

They are still both working.
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Re: Day trading for a living/career?

Post by jminv » Sat Feb 10, 2018 4:07 pm

Windylotus wrote:
Sat Feb 10, 2018 11:30 am
Thank you all for your comments.

The more I read them, the less appealing day trading sounds. (at least on my own dime)

My motivation behind this thread is I'm at a bit of a career crossroads.

I have been in the building industry for the past 28 years and currently own my own general contracting business for the last 16 years. I had major back surgery in 2005 and suffer from degenerative disc disease. Not a great combination for building homes and remodels. Truthfully, I have just lost my passion for it and it is a younger man’s game.

Fast forward a bit and I now find myself in college at age 43 for the first time. I’ve just started my junior year as a business finance major. I was fortunate to qualify for college through the Montana vocational rehabilitation program due to my back issues. I feel so blessed for this opportunity to have my college tuition, books, travel expenses to school and a lap top computer all paid for. My only issue is I have to take student loans to supplement my income while going to school. (I still have all my adult bills) I do some part-time work during the semesters and hit it hard over the summer to build and save as much as I can, but it still is not enough to cover our family expenses.

So I’m currently trying to figure out how might I obtain a gratifying career path? I have so enjoyed learning much about personal finance over the last few years through Bogleheads and other like-minded stuff that when I signed up for college, finance seemed to be the path to take. I am a little concerned when I get my degree going to work for an employer. Being self employed for the past 16 years, I kind of have gotten set in my own ways/schedule. That's where the working from home/day trading idea came from. I'm not adverse to working for an employer. Getting regular paychecks, benefits, 401(k) contributions, vacation/sick time are all welcoming things.

Maybe I should try investment banking for a career start?
You could use your expertise in general contracting to supervise the remodelling of homes using crowdfunded investments to do so. Peer street, patch of land, etc. The interest rates are attractive from a borrowers standpoint as new issues are sold out in minutes. Pretty much anything will be 'invested' in. This gets you decent leverage, plays into something you're good at, while also making use of your newly aquired knowledge.

Day trading works in an up market in that most people make some sort of money. It's below what you would get from buying and holding. As others have noted, you're competing against large teams of very smart people located next to the exchanges to trade as quickly as possible to exploit momentary inefficiencies.

If you look at a general day traders chat group you will see that people make bets based on charts and momentum. It's akin to astrology. They use lots of leverage and trade in products they don't fully understand to try to get outsized returns. Inevitably, they're wiped out or get out soon enough (or random chance) to be held up as stories of 'success'.

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Re: Day trading for a living/career?

Post by Call_Me_Op » Sat Feb 10, 2018 4:18 pm

Windylotus wrote:
Sat Feb 10, 2018 8:30 am
Could speculation be mastered with a degree of skill?
Generally speaking - no.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

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Re: Day trading for a living/career?

Post by JimmyJammy » Sat Feb 10, 2018 4:47 pm

I'll say this - as volatility comes back into the market, it becomes a much better environment for day trading. So I expect the rest of 2018 will be much better for day trading than 2017.

Not saying you should do it.

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bottlecap
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Re: Day trading for a living/career?

Post by bottlecap » Sat Feb 10, 2018 7:56 pm

I'm sorry. You are completely dreaming.

Of course, everyone would like to trade a few hours a day and study-up in the evening. Very few people can do it. Those that can have enjoyed complete luck.

But with luck, they think they can beat professional investors with far less research.

Yeah right.

JT

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Re: Day trading for a living/career?

Post by Tanelorn » Sat Feb 10, 2018 9:35 pm

mffl wrote:
Sat Feb 10, 2018 1:18 pm
Right. I'm with you on the steamroller analogy. When trying to beat the market, people inevitably come up with strategies that have some non-zero chance of losing all of your money in a single day. The most enticing ones are the ones that seem to give either consistent returns and/or consistently above the market returns for days/weeks/months on end. But, since the chance of losing everything is non-zero, and you can't see that coming ahead of time, you will end up losing it all. Look no further than traders of XIV this last week.
Maybe you should be looking at the people who were short XIV last week instead of long. That fund didn't just lose 95% of its $1B value - it lost it to other people in the market.

To OP. I wrote up some advice and guidelines for an aspiring day trader a year or two back when I was feeling charitable. You might find them of interest. Briefly, if you want to live and breathe this stuff, maybe you give it a try and see if you have what it takes to succeed. Most will not, and it will not be "easy money" at least not for a very long time (if ever).

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in_reality
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Re: Day trading for a living/career?

Post by in_reality » Sat Feb 10, 2018 9:56 pm

Windylotus wrote:
Sat Feb 10, 2018 12:53 pm

Yes, I could stay in the building industry if I wanted to. Frankly, I'm bored with it. There are no challenges left in my view. I have never been a just drive around in your pick-up truck with a clip board and tape measure and just tell people what to do kind of contractor. I have always been very hands on during my career and gained the respect of my sub-contractors and clients because of that. It's just my body is finally wearing out. I want to stay fit enough that I can at least chase the DW around in our golden years :D The only contracting I care to do anymore are my own projects. Going to build us a new home in a few years, possibly some rental properties. Tired of working on everyone else's projects.
Wow. So you have some serious skills, but the work is hard.

Those rental properties sound like a good idea.

I have no idea of what it would take to find some investors, train a team (to do the work), and manage the property; nor the risks involved. However, I would pursue that before day trading.

What I am saying is to perhaps find a way to leverage your know-how. If it isn't possible, it isn't possible but even taking a low paying job is probably better than day trading.

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ThereAreNoGurus
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Re: Day trading for a living/career?

Post by ThereAreNoGurus » Sat Feb 10, 2018 10:23 pm

There is an occasional poster here (it's not me) who is a full-time home based trader. He wrote a book titled, "How I Trade for a Living." It was published in 2000.

I purchased the book out of curiosity. I have no interest in becoming a day-trader... too much work. Again, it was just curiosity.

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Re: Day trading for a living/career?

Post by michaeljc70 » Sat Feb 10, 2018 10:25 pm

I know someone that seemingly makes their living day trading from home. I say seemingly in that his Father is rich and owned an investment company, so if he lost all his money, he would have a backup plan/money. I've never asked (as I thought it would be rude) if he gets money from his parents or entirely lives off of day trading.

I would say that if this was an easily learned skill, there would be people doing it all over the place. Even if you are experienced, I think you need a lot of capital or leverage to really make money. If there was a "system" someone could teach (or sell) you, everyone would be buying/learning it and therefore devaluing it.

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Re: Day trading for a living/career?

Post by mffl » Mon Feb 12, 2018 8:15 pm

michaeljc70 wrote:
Sat Feb 10, 2018 10:25 pm
I know someone that seemingly makes their living day trading from home. I say seemingly in that his Father is rich and owned an investment company, so if he lost all his money, he would have a backup plan/money. I've never asked (as I thought it would be rude) if he gets money from his parents or entirely lives off of day trading.

I would say that if this was an easily learned skill, there would be people doing it all over the place. Even if you are experienced, I think you need a lot of capital or leverage to really make money. If there was a "system" someone could teach (or sell) you, everyone would be buying/learning it and therefore devaluing it.
Any "expert" who isn't lying about their success is just an example of survivorship bias anyway. It's like taking tips from a lottery winner.

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Re: Day trading for a living/career?

Post by Tycoon » Mon Feb 12, 2018 8:27 pm

sergeant wrote:
Sat Feb 10, 2018 3:22 pm
My neighbor sold his (inherited) successful business about 20 years ago for near 15 million dollars. He puttered around for a couple years, bought a boat, bought a house at the river, and went out for lunch. He disappeared for a few weeks and his wife told me that he was inside the house trading stocks.

A few months later he emerged back into the public, sold his boat and river house. He went back to work and his wife started working in the office at a nearby school. She told my wife that her husband had lost everything! :shock:

They are still both working.
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Re: Day trading for a living/career?

Post by Tyler Aspect » Mon Feb 12, 2018 10:46 pm

The expected return of repeated trading is negative.

Whenever you buy or sell these are always the counter-party on the other side. Fairness would dictate an even outcome between you and the counter-party over a long series of trades. Now adding the cost of trading such as the spread and commission - expected return negative.

There are other bad effects. Your long term capital gain disappear and turns into short term capital gain. Secondary tax hit.
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jibantik
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Re: Day trading for a living/career?

Post by jibantik » Mon Feb 12, 2018 10:55 pm

Windylotus wrote:
Sat Feb 10, 2018 8:30 am
Hello fellow Bogleheads,
...

I’m not talking about wildly throwing money at Bitcoin and hoping for a get rich quick scheme, rather taking a period of time to learn the ins and outs of the industry.

I realize there would be a learning curve with something like this. Understanding trading platforms, accurate news and information feeds, understanding appropriate risk/reward ratios (surviving to trade another day), paper trading for a period of time to prove these trading methods work over and over again ect.

...

Any thoughts out there? I realize this is a pretty conservative investing advice site but are there people who day trade on this site? Thanks in advance for any comments.

A normal person trying to compete in this area might as well be wildly throwing money at bitcoin. That is exactly what this is going to be like. Speculation is speculation my friend.

I just cannot fathom how people think they can win this way. You will be competing against teams of people, computers, mathematicians, statisticians, AI, industry-experts, PhDs. How can an average person expect to beat these teams. You'd have to be Jim Cramer levels of genius :wink:

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Re: Day trading for a living/career?

Post by Cycle » Mon Feb 12, 2018 10:56 pm

3 fund. Day trading seams like professional gambling. I'm sure there would be rushes, but Id have to think it would be an unfulfilling job unless you make so much you can give back to society in some meaningful way. I read flash boys and thought, what a waste of talent.
Last edited by Cycle on Mon Feb 12, 2018 11:06 pm, edited 2 times in total.

WhyNotUs
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Re: Day trading for a living/career?

Post by WhyNotUs » Mon Feb 12, 2018 11:05 pm

Given your interest in finance and knowledge in construction a loan officer for a bank or mortgage broker might be interesting and more interesting for you.
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Re: Day trading for a living/career?

Post by NibbanaBanana » Mon Feb 12, 2018 11:15 pm

Stop. Learn to meditate.

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Re: Day trading for a living/career?

Post by Beehave » Mon Feb 12, 2018 11:29 pm

I strongly (STRONGLY) suggest no (one exception at end of this post). Here's why:

. 1 . You: bright individual with limited financial resources and very limited technology
. 2 . Your competition: a slew if individuals very similar to you PLUS a raft of deep-pocketed, world-class technology-wielding (hardware and custom software) institutions staffed by teams of the best minds money can buy 24-hour staffs co-located with exchanges who are automatedly watching and evaluating every available trade on every exchange before you are even aware of the possibility.

Odds do not look good to me. I have one friend who tried and lost a big bundle. It became an addiction he could not quit until he'd lost so much it could not continue.

Don't Do!

Okay - - I know one fellow who seems to make money. I think what he does is use his stock holdings as a basis for buying/selling puts and/or calls (forgive me, I do not understand options even though he explained it twice). I think everything he does is protected on the up-side and down-side. It sounded much safer and saner than trying to buy a position and then flip it at a higher price 200 times a day trying to make 1 or 2 or n thousand bucks.

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Re: Day trading for a living/career?

Post by denovo » Mon Feb 12, 2018 11:33 pm

Watty wrote:
Sat Feb 10, 2018 9:33 am

Many of them will have mathematical and investing related degrees from the top schools and they may have decades of experience. They also have full time staff to assist them and they trade as a team.

Companies are also experimenting with artificial intelligence to trade stocks that can not only use algorithms for trading but also adapt and learn.

There is an old phrase, "Bringing a knife to a gunfight." which would be a good analogy to what an individual trying to day trade is up against but your real odds might be more like "Bringing a knife to a nuclear war."
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Re: Day trading for a living/career?

Post by whodidntante » Mon Feb 12, 2018 11:35 pm

Sorry, but day trading is so 90's. The real money is in night trading.

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Re: Day trading for a living/career?

Post by Pajamas » Mon Feb 12, 2018 11:43 pm

No one can answer this question for you.

Maybe you should do some simulated trading and see how it goes. Be rigorously honest with the simulated trading. Don't ignore transaction costs, don't say "Oh, I had to meet Jimmy Jack for lunch but otherwise I would have blah blah blah," and if and when you lose all your capital don't pretend like you didn't.

Then come back and discuss what you've learned and ask for real advice if you still need it instead of just asking about it in general without knowing anything about it from experience.

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Re: Day trading for a living/career?

Post by pkcrafter » Mon Feb 12, 2018 11:53 pm

Windylotus, who is "the guy"? Friend or someone you just met, what? Is he in the business and is there a fee?

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Re: Day trading for a living/career?

Post by Slacker » Tue Feb 13, 2018 12:41 am

Windylotus wrote:
Sat Feb 10, 2018 12:53 pm
The only contracting I care to do anymore are my own projects. Going to build us a new home in a few years, possibly some rental properties. Tired of working on everyone else's projects.
...so you were asking about Day Trading (all I know about Day Trading is that you'd probably make more money if you were the brokerage firm)

Why not just pursue the rental property thing? Different enough from general contracting without throwing away your 28 years of experience and significantly less taxing on the body. Make it your new day job and handle the repairs and property management yourself (enough software, services and automated systems exist to make it much less painful to run a real estate business)

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Re: Day trading for a living/career?

Post by bluejello » Tue Feb 13, 2018 4:31 am

I guess you could say my husband "day trades" for a career. Not to brag, but this is his profile:

- Graduate degree from MIT in computer science and math
- 15 years of trading experience at major banks / investment houses
- Support from whole teams of people who specialize in making sure he has the fastest computers and servers, best infrastructure, low-latency wireless network communication systems, etc.
- Private deals with exchanges for more favorable fees and access
- Is provided capital to trade with (e.g. does not risk his own capital) AND gets paid a nice salary and benefits. Our personal money is in Vanguard. :)

Everyone else who works in his industry also has a similar profile. Yes, successful traders can make a lot of money doing this. Not trying to be mean, but to come in out of left field and think that you're going to "pick up" day trading and be profitable at it is kind of insane. It would be like me saying, "hey I watched some episodes of HGTV and it looks interesting, I think I'm going to open up a construction business!" when I don't know how to swing a hammer.

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Re: Day trading for a living/career?

Post by bluejello » Tue Feb 13, 2018 4:36 am

mffl wrote:
Sat Feb 10, 2018 1:18 pm
Also, why do we give the "big boys" and "money makers" so much credit just because they get faster trades in or know more stuff or whatever? You can read Wikipedia articles for days about MIT grads and white papers and banks and scientific research and whatever who started funds that were guaranteed to make money or reduce risk. Staggering numbers of them have failed. These guys either take low enough risk that they routinely underperform the market and are saved by the fact that if they do so by small enough amounts, they can plod along for decades since the long term market trend is upwards, or they take enough risk that the "lose it all" risk goes above zero. Then it works for days, weeks, months, or even years.... until it doesn't, and they've lost everything.
They don't lose everything. Their investors might lose everything, but the traders / fund managers themselves always collect a nice salary + hefty incentive fees right up until the moment their strategies stop working. Even if their funds go bust, they can still get a high-paying job elsewhere or just start up a new fund.

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Re: Day trading for a living/career?

Post by lazydavid » Tue Feb 13, 2018 6:26 am

angelescrest wrote:
Sat Feb 10, 2018 9:04 am
Compound wrote:
Sat Feb 10, 2018 8:50 am
I’m sure for every day trader who is winning, there is a corresponding loser.
Yup, for every buyer there is a seller.
I'd guess its worse than this. Since those who are winning will tend to be be trading in larger and larger volumes over time, it seems likely that for every day trader who is winning, there are multiple corresponding losers.

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Re: Day trading for a living/career?

Post by neilpilot » Tue Feb 13, 2018 8:44 am

Beehave wrote:
Mon Feb 12, 2018 11:29 pm

Okay - - I know one fellow who seems to make money. I think what he does is use his stock holdings as a basis for buying/selling puts and/or calls (forgive me, I do not understand options even though he explained it twice). I think everything he does is protected on the up-side and down-side. It sounded much safer and saner than trying to buy a position and then flip it at a higher price 200 times a day trying to make 1 or 2 or n thousand bucks.
Selling covered puts is not day trading, and can actually be a very conservative way to increase your return on individual equity holdings.

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Re: Day trading for a living/career?

Post by mffl » Tue Feb 13, 2018 10:02 am

bluejello wrote:
Tue Feb 13, 2018 4:36 am
mffl wrote:
Sat Feb 10, 2018 1:18 pm
Also, why do we give the "big boys" and "money makers" so much credit just because they get faster trades in or know more stuff or whatever? You can read Wikipedia articles for days about MIT grads and white papers and banks and scientific research and whatever who started funds that were guaranteed to make money or reduce risk. Staggering numbers of them have failed. These guys either take low enough risk that they routinely underperform the market and are saved by the fact that if they do so by small enough amounts, they can plod along for decades since the long term market trend is upwards, or they take enough risk that the "lose it all" risk goes above zero. Then it works for days, weeks, months, or even years.... until it doesn't, and they've lost everything.
They don't lose everything. Their investors might lose everything, but the traders / fund managers themselves always collect a nice salary + hefty incentive fees right up until the moment their strategies stop working. Even if their funds go bust, they can still get a high-paying job elsewhere or just start up a new fund.
That is an extraordinarily good point.

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Re: Day trading for a living/career?

Post by Fallible » Tue Feb 13, 2018 1:50 pm

bluejello wrote:
Tue Feb 13, 2018 4:31 am
I guess you could say my husband "day trades" for a career. Not to brag, but this is his profile:

- Graduate degree from MIT in computer science and math
- 15 years of trading experience at major banks / investment houses
- Support from whole teams of people who specialize in making sure he has the fastest computers and servers, best infrastructure, low-latency wireless network communication systems, etc.
- Private deals with exchanges for more favorable fees and access
- Is provided capital to trade with (e.g. does not risk his own capital) AND gets paid a nice salary and benefits. Our personal money is in Vanguard. :)

Everyone else who works in his industry also has a similar profile. Yes, successful traders can make a lot of money doing this. Not trying to be mean, but to come in out of left field and think that you're going to "pick up" day trading and be profitable at it is kind of insane. It would be like me saying, "hey I watched some episodes of HGTV and it looks interesting, I think I'm going to open up a construction business!" when I don't know how to swing a hammer.
This is valuable "inside" information that I hope will help the OP. It is similar to the tremendous advantages professional traders and money managers have over average investors trying to successfully pick individual stocks.
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Re: Day trading for a living/career?

Post by David Jay » Tue Feb 13, 2018 4:58 pm

jibantik wrote:
Mon Feb 12, 2018 10:55 pm
You'd have to be Jim Cramer levels of genius :wink:
I see what you did there...
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Re: Day trading for a living/career?

Post by Easy Rhino » Tue Feb 13, 2018 5:35 pm

I'm acquaintanced with someone who basically day trades, with his own money and a few investors. He spends all. the. time. researching "special situations" on small companies that might fly under the radar of larger institutional traders. It sounds like a ton of work. Also, his particular trading wouldn't scale up to investing a large portfolio either.

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Re: Day trading for a living/career?

Post by Pajamas » Tue Feb 13, 2018 5:36 pm

Windylotus wrote:
Sat Feb 10, 2018 8:30 am
Any thoughts out there? I realize this is a pretty conservative investing advice site but are there people who day trade on this site? Thanks in advance for any comments.
You should ask this guy if he has any suggestions for you:

viewtopic.php?f=2&t=241547

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Re: Day trading for a living/career?

Post by Stormbringer » Tue Feb 13, 2018 9:32 pm

I don't even understand how people could theoretically make a living doing this, any more than you could make a living playing craps at the casino (and I used to be a dealer).

For every good trade you make, someone else has to be making a bad trade. Yet surely there are a great many people with better access to information than you have, and faster execution speed (e.g. servers co-located in the stock exchange data centers). And then there are transaction costs.

It seems like gambling to me, and not much more than that.
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Re: Day trading for a living/career?

Post by Windylotus » Tue Feb 13, 2018 9:47 pm

pkcrafter wrote:
Mon Feb 12, 2018 11:53 pm
Windylotus, who is "the guy"? Friend or someone you just met, what? Is he in the business and is there a fee?

Paul
So "the guy" is my marketing professors husband. We were doing introductions about ourselves at the beginning of the semester and what not, and that's how I found out what he did. I met with her and asked if it would be okay to reach out to him via email to ask some questions about it and possibly meet with him over coffee or a beer.

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Re: Day trading for a living/career?

Post by Windylotus » Tue Feb 13, 2018 9:50 pm

Slacker wrote:
Tue Feb 13, 2018 12:41 am
Windylotus wrote:
Sat Feb 10, 2018 12:53 pm
The only contracting I care to do anymore are my own projects. Going to build us a new home in a few years, possibly some rental properties. Tired of working on everyone else's projects.
...so you were asking about Day Trading (all I know about Day Trading is that you'd probably make more money if you were the brokerage firm)

Why not just pursue the rental property thing? Different enough from general contracting without throwing away your 28 years of experience and significantly less taxing on the body. Make it your new day job and handle the repairs and property management yourself (enough software, services and automated systems exist to make it much less painful to run a real estate business)
I only have four more semesters to go before I have that degree. I can always play with real estate after I graduate. Trying to have a backup plan.

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Re: Day trading for a living/career?

Post by Windylotus » Tue Feb 13, 2018 9:55 pm

Pajamas wrote:
Tue Feb 13, 2018 5:36 pm
Windylotus wrote:
Sat Feb 10, 2018 8:30 am
Any thoughts out there? I realize this is a pretty conservative investing advice site but are there people who day trade on this site? Thanks in advance for any comments.
You should ask this guy if he has any suggestions for you:

viewtopic.php?f=2&t=241547
Pajamas, OUCH!! :oops: Good point, thanks.

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Re: Day trading for a living/career?

Post by Windylotus » Tue Feb 13, 2018 10:02 pm

Thank you all for your comments and advice. Weather it was a bit harsh or not you all were giving it to me like I needed to hear it. That's called tough love. I think after all the wisdom I have heard, day trading is not for me. I'm not willing to risk DW and my future on it.

Just still trying to figure out my new career path in life right now. Not sure if I want to tap in to my building experience or not. Just burned out on it. Thanks again brother and sister Bogleheads!

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Re: Day trading for a living/career?

Post by long_gamma » Tue Feb 13, 2018 10:22 pm

bluejello wrote:
Tue Feb 13, 2018 4:31 am
I guess you could say my husband "day trades" for a career. Not to brag, but this is his profile:

- Graduate degree from MIT in computer science and math
- 15 years of trading experience at major banks / investment houses
- Support from whole teams of people who specialize in making sure he has the fastest computers and servers, best infrastructure, low-latency wireless network communication systems, etc.
- Private deals with exchanges for more favorable fees and access
- Is provided capital to trade with (e.g. does not risk his own capital) AND gets paid a nice salary and benefits. Our personal money is in Vanguard. :)

Everyone else who works in his industry also has a similar profile. Yes, successful traders can make a lot of money doing this. Not trying to be mean, but to come in out of left field and think that you're going to "pick up" day trading and be profitable at it is kind of insane. It would be like me saying, "hey I watched some episodes of HGTV and it looks interesting, I think I'm going to open up a construction business!" when I don't know how to swing a hammer.
Your general assessment is good for one who starts trading. But your overall tone of the post, indicating individual traders does not have any advantage is not right. Big funds/desks do have advantage of technology.

There are some advantages being individual trader, provided they know what they doing. First one is the liquidity. Big funds and traders tend to be in very liquid names, otherwise they will move the markets. Individual traders do not have that limitation. Their edge is probably in smaller markets.
Bank prop desks also have regulatory limitation of Basel treaties and volcker rule. So they cannot trade certain stocks and they can not extract edges of index option market (infact it effects them negatively)
"Everyone has a plan 'till they get punched in the mouth." --Mike Tyson

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Re: Day trading for a living/career?

Post by Lauretta » Wed Feb 14, 2018 8:48 am

alpenglow wrote:
Sat Feb 10, 2018 12:17 pm
The bid-ask spread alone was a great way to make money. Decimalization tightened spreads down quite a bit. As others have mentioned, HFT took away profitable opportunities that I was able to do very quickly by hand. I usually made hundreds of trades daily, often being in a stock for seconds at a time.
Hi I don't know anything about day trading but could you explain what you mean by
bid-ask spread alone was a great way to make money
? I mean my understanding is that if you buy a stock, then hold it for a few seconds like you say and then sell it, unless it goes up by more than the spread you won't have made a profit. So my understanding is that the larger the spread the harder it is for you to make a quick profit. Where have I got this wrong? :confused
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Re: Day trading for a living/career?

Post by alpenglow » Wed Feb 14, 2018 8:58 am

Lauretta wrote:
Wed Feb 14, 2018 8:48 am
alpenglow wrote:
Sat Feb 10, 2018 12:17 pm
The bid-ask spread alone was a great way to make money. Decimalization tightened spreads down quite a bit. As others have mentioned, HFT took away profitable opportunities that I was able to do very quickly by hand. I usually made hundreds of trades daily, often being in a stock for seconds at a time.
Hi I don't know anything about day trading but could you explain what you mean by
bid-ask spread alone was a great way to make money
? I mean my understanding is that if you buy a stock, then hold it for a few seconds like you say and then sell it, unless it goes up by more than the spread you won't have made a profit. So my understanding is that the larger the spread the harder it is for you to make a quick profit. Where have I got this wrong? :confused
Basically I was playing market maker. I would often put in a bid where there was a lot of support. Then flip around and sell on the ask. Or vice versa. Doing this 1000 or more shares at a time could add up nicely over the course of a day. 1000 shares with a $0.25 spread = $250 profit.

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Re: Day trading for a living/career?

Post by indexonlyplease » Wed Feb 14, 2018 9:10 am

I think I am a day trader. Retired and have Vanguard fund managers trading for me daily. But then I just collect my pension and look at my investments when I am bored. Which is not often.

Keep your job and have some play money to trade. If you lose that you will be glad you still have the job.

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