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Day Trading for a Living?

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Re: Day Trading for a Living?

#41

Post by lm28469 »

tylerhou wrote: post #26
Kranar wrote: post #15

I mean you may as well say: Study shows it is impossible for an individual to build a tech start up as a living. Just because something is hard doesn't mean it's impossible. Day trading, like many other risky ventures, is something that is very hard and unlikely but for the few who succeed ends up being very profitable.

> Day trading, like many other risky ventures, is something that is very hard and unlikely but for the few who succeed ends up being very profitable. > the top individual earned only US$310 per day with great risk (a standard deviation of US$2,560). The very best day trader made around the same as an entry-level SWE, which does not scream immense profit to me.

> an entry-level SWE

In a major tech hotspot, working 8 hours a day

Re: Day Trading for a Living?

#42

Post by matwood »

docker_up wrote: post #11

Impossible? Lol I have a handful of friends that do this. It's hard work but they make 5 to 6 figures consistently per year. It's very very hard, and not everyone can do it. I tried and lost a lot of money. But it's definitely not impossible, that is simply a lie.

> It's hard work but they make 5 to 6 figures consistently per year.

For how many years, and how much seed money did they start with? The problem with making a high percentage consistently is it requires taking on huge risks. Those huge risks mean at some point a trade will go bad and your friends will be done.

Re: Day Trading for a Living?

#43

Post by mrandish »

vonmoltke wrote: post #33
cptaj wrote: post #23

Earlier quoted context omitted.

Playing the lottery is also very profitable for those who succeed.

Correct, and the statement "it is impossible to become rich by playing the lottery" is absurd. It's part of an annoying tendency to conflate "extremely low probability of success" with "impossible".

Yes, the title should have been something like "impossible for an individual to day trade stocks for a consistently reliable living".

Re: Day Trading for a Living?

#44

Post by shoes_for_thee »

mattkrause wrote: post #17

Aren't futures contracts, by definition, zero-sum? The average profit should be pretty damn close to zero (ignoring/averaging across trades with non-daytraders).

Yeah, it's a zero-sum game. I guess the study was looking at individuals competing against institutions and market-makers.

Re: Day Trading for a Living?

#45

Post by brk »

docker_up wrote: post #24
brk wrote: post #16

Earlier quoted context omitted.

All things considered, "5 figures" seems like a pretty low income for something that is "very very hard", and risky. Seems like if you have the skills and tenacity to day trade like that you could find some other job to pay you high 5 figures with a more stability.

$20,000 per year is livable in many areas of the US, especially if you have a lot of savings to back that up. The point is that saying it's "impossible" is a lie.

Where is $20,000 ‘livable’? Savings or not, I don’t know of many places where you could live on a net income of ~$1,300/mo. what do you do for medical benefits alone in that income bracket?

Re: Day Trading for a Living?

#46

Post by ineedasername »

soneca wrote: post #39
davidu wrote: post #8

I don't doubt the headline, but "We observe all individuals who began to day trade between 2013 and 2015 in the Brazilian equity futures market" seems like a weird way to come to that conclusion.

Why weird?

Because it would represent an extremely narrow slice of traders. It's possible traders of these equities find it quite hard to make a living but a larger number of other day traders do just fine.

Also it says "impossible" but the article actually shows it's difficult and rare.

Re: Day Trading for a Living?

#47

Post by flatline »

kevin_nisbet wrote: post #30
Kranar wrote: post #15

I mean you may as well say: Study shows it is impossible for an individual to build a tech start up as a living. Just because something is hard doesn't mean it's impossible. Day trading, like many other risky ventures, is something that is very hard and unlikely but for the few who succeed ends up being very profitable.

The abstract of the paper seems to suggest otherwise: We observe all individuals who began to day trade between 2013 and 2015 in the Brazilian equity futures market, the third in terms of volume in the world, and persisted for at least 300 days: 97% of them lost money, only 0.4% earned more than a bank teller (US$54 per day), and the top individual earned only US$310 per day with great risk (a standard deviation of U…

I know people who made millions day trading commodities, for no one in that cohort to have made any real money over two years is surprising to the point of disbelief. This may be something particular to the Brazilian exchange.

Re: Day Trading for a Living?

#48

Post by firethief »

vonmoltke wrote: post #33
cptaj wrote: post #23

Earlier quoted context omitted.

Playing the lottery is also very profitable for those who succeed.

Correct, and the statement "it is impossible to become rich by playing the lottery" is absurd. It's part of an annoying tendency to conflate "extremely low probability of success" with "impossible".

Is that the original goalpost? Because I'd say it is impossible to make a living playing the lottery. To make a living doing something, it needs to provide enough positive cash flow.

Re: Day Trading for a Living?

#49

Post by quaquaqua1 »

mawburn wrote: post #40
outime wrote: post #32

Putting aside the potential quality issues of the study, the headline here in HN isn't accurate and made a lot of people comment about how wrong it is. The study doesn't literally say "impossible" but "virtually impossible" and they do say that a very small percentage was able to make about $310 a day which is about ~110k a year.

> which is about ~110k a year $310 * 5 days a week * 52 weeks a year = $80,600

110k pre tax in the USA is 80k post tax per year-- it is often helpful for us to think in terms of both numbers when comparing money making methods. That's my guess at least.

Re: Day Trading for a Living?

#50

Post by soneca »

tylerhou wrote: post #26
Kranar wrote: post #15

I mean you may as well say: Study shows it is impossible for an individual to build a tech start up as a living. Just because something is hard doesn't mean it's impossible. Day trading, like many other risky ventures, is something that is very hard and unlikely but for the few who succeed ends up being very profitable.

> Day trading, like many other risky ventures, is something that is very hard and unlikely but for the few who succeed ends up being very profitable. > the top individual earned only US$310 per day with great risk (a standard deviation of US$2,560). The very best day trader made around the same as an entry-level SWE, which does not scream immense profit to me.

I agree with your point totally. But just to put in perspective that U$310/day in Brazil would be the equivalent of the top 10% software engineer salaries in Brazil.
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