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Almost 80% of Private Day Traders Lose Money

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Re: Almost 80% of Private Day Traders Lose Money

#41

Post by [deleted] »

crucialfelix wrote: post #32
yomly wrote: post #17

Earlier quoted context omitted.

So if you went in with an "algorithm" which baked in your own rules for trading and left it for a year, would it have performed better? Does a greater proportion of non-HFT bots make money?

Developing that trading strategy is a continuous job; that's what successful traders do. They don't play stocks, they play strategies. There are going to be computers involved no matter what. Your indicators, your trading platform, what analysts you trust. So what is a bot ? A "bot" suggests to me something just trading in and out of some security at some average frequency: weeks, days, intraday, minutes, seconds and…

[deleted]

Re: Almost 80% of Private Day Traders Lose Money

#42

Post by emodendroket »

crucialfelix wrote: post #32
yomly wrote: post #17

Earlier quoted context omitted.

So if you went in with an "algorithm" which baked in your own rules for trading and left it for a year, would it have performed better? Does a greater proportion of non-HFT bots make money?

Developing that trading strategy is a continuous job; that's what successful traders do. They don't play stocks, they play strategies. There are going to be computers involved no matter what. Your indicators, your trading platform, what analysts you trust. So what is a bot ? A "bot" suggests to me something just trading in and out of some security at some average frequency: weeks, days, intraday, minutes, seconds and…

Isn't it the case that essentially no traders beat the performance of index funds long-term?

Re: Almost 80% of Private Day Traders Lose Money

#43

Post by qznc »

yomly wrote: post #38
crucialfelix wrote: post #32

Earlier quoted context omitted.

Developing that trading strategy is a continuous job; that's what successful traders do. They don't play stocks, they play strategies. There are going to be computers involved no matter what. Your indicators, your trading platform, what analysts you trust. So what is a bot ? A "bot" suggests to me something just trading in and out of some security at some average frequency: weeks, days, intraday, minutes, seconds and…

Thanks - I like the idea of strategies being an extension of the trader. Until we have fully independently trained NN-based trading algorithms, I guess there will always be domain knowledge being applied. (Even with NNs the domain knowledge will be applied in choice of layers etc.) >Definitely. Discipline is tough when somebody just demolished your chinese solar stock and you are down a week's earnings. The bot would…

> What stopped you from cutting and running in that case? Was it the hope that the stock would swing back?

I believe you have to experience this yourself, since this is about emotions, bias, and insecurity. Everybody only has a sample size of one with this.

I can say that I found it very similar to playing Poker. In both cases you need to conquer your emotions and biases and simply follow the damn strategy. In both cases, the edge cases will make you constantly doubt your strategy.

Re: Almost 80% of Private Day Traders Lose Money

#45

Post by manishsharan »

chollida1 wrote: post #29

I re-read Michael Lewis' Liar's Poker once every few years. In new reprints he's added a prologue where he says something along the lines of "I tried to write a book about the horrors of wall street and instead it became a recruiting tool for wall street" In a similar vein whenever something like this comes up I write something that says don't try and do this and inevitable I get 10+ emails from people saying "Ok I u…

@chollida1 , you should write a book; help drive Michael Lewis' point home. In my last project for a brokerage system, I developed features for day traders. What was most surprising to me how much money the brokerage system generated for the bank regardless of the outcomes for the day traders.

Re: Almost 80% of Private Day Traders Lose Money

#46

Post by mistermann »

emodendroket wrote: post #42
crucialfelix wrote: post #32

Earlier quoted context omitted.

Developing that trading strategy is a continuous job; that's what successful traders do. They don't play stocks, they play strategies. There are going to be computers involved no matter what. Your indicators, your trading platform, what analysts you trust. So what is a bot ? A "bot" suggests to me something just trading in and out of some security at some average frequency: weeks, days, intraday, minutes, seconds and…

Isn't it the case that essentially no traders beat the performance of index funds long-term?

It isn't, there's fanous people like Warren Buffet of course, but I personally know of 3 individuals in investing forums who post all their trades and handily beat indexes over long periods.

Re: Almost 80% of Private Day Traders Lose Money

#47

Post by alistproducer2 »

crucialfelix wrote: post #9

I did it for a while in the very exciting year of 2008. I see-sawed back and forth and was profitable for months at a time, but in the end I was down. I strictly kept my daily losses limited at $50/day. So really small risk. At the end of that year my day trading losses were about $1500 and otherwise I was in cash just watching the world burn. My long term funds lost more than that in a day. I've lost out on more mon…

I traded a little during the crisis until I got hit with the pattern day trading rule. I cashed out up 28%. Maybe they were doing me a favor cause I probably wouldn't have done so well on a longer timeline.

Re: Almost 80% of Private Day Traders Lose Money

#48

Post by pm90 »

weavie wrote: post #34
danieltillett wrote: post #6

Earlier quoted context omitted.

I am sure someone will come here and say they have made their fortune from day trading, but every single person I know personally who has tried has lost a fortune. It is like lotto - sure someone wins each week, but nearly everybody loses.

Well, I don't make a fortune from it, but after losing a fair amount of money day trading, I wrote an iOS app where people can practice their day trading. The income from it has covered my losses from trading. So, yeah I can say I make some thing from day trading!

Do you see what the parent's point is? You may not be one of the people making money directly from day trading itself, but you are an outlier, in that you used your experience to create a product. Which is something that only you did.

I do think its a smart idea though. My comment was directed more at the appropriateness of the parents' observation.

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