Day Trading for a Living? • Hacker News Board

Re: Day Trading for a Living?

#101

Post by basseq » Wed, Sep 11, 2019, 4:01 PM UTC

osrec wrote: post #83

I've done ok trading stocks and FX, probably enough to live off. There is a caveat however; you need to have a sizeable portfolio to begin with. Otherwise, the risks you'll need to take are simply too large. If you think you're going to turn £5k into £500k in a year, forget it! But turning £5k into £5.3k is certainly doable. Scale that initial portfolio to £5m, and you can take home £300k with relative ease in a good…

But I could also sock £5m into VBIAX, with 7% annualized returns, and clear an extra £50k. At that point, other than "I like day-trading", why would you want to do that?

Re: Day Trading for a Living?

#102

Post by Kranar » Wed, Sep 11, 2019, 4:01 PM UTC

melling wrote: post #81

For anyone interested in a great story about a world class mathematician who built a company that has used algorithms to beat the market for the last few decades, James Simons has an impressive record: https://www.ted.com/talks/jim_simons_a_rare_interview_with_t... https://m.youtube.com/watch?v=QNznD9hMEh0 https://en.m.wikipedia.org/wiki/Jim_Simons_(mathematician) One other thing, the Simons Foundation funds Quanta M…

Renaissance Technologies did not use algorithms to beat the market... they used tax schemes to do so:

https://www.bloomberg.com/news/articles/2019-04-10/renaissan...

When you factor in the money they saved from dodging taxes and how they managed to compound the growth on that money, their returns end up being no more impressive than any other hedge fund.

Even if it turns out that what they did wasn't illegal, the bulk of their profits beyond what would have been made just investing in an index fund came from their tax scheme rather than from any kind of insight into the financial markets.

Re: Day Trading for a Living?

#103

Post by reverend_gonzo » Wed, Sep 11, 2019, 4:01 PM UTC

melling wrote: post #61

flatline wrote: post #47

Earlier quoted context omitted.

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.

I’ve noticed a lot of successful traders trade commodities versus equities. What makes commodities easier to trade? Ed Seykota has been doing it for decades: https://en.m.wikipedia.org/wiki/Ed_Seykota

Leverage.

You’ll quickly get big or go home.

Re: Day Trading for a Living?

#104

Post by osrec » Wed, Sep 11, 2019, 4:01 PM UTC

wbl wrote: post #86

osrec wrote: post #83

I've done ok trading stocks and FX, probably enough to live off. There is a caveat however; you need to have a sizeable portfolio to begin with. Otherwise, the risks you'll need to take are simply too large. If you think you're going to turn £5k into £500k in a year, forget it! But turning £5k into £5.3k is certainly doable. Scale that initial portfolio to £5m, and you can take home £300k with relative ease in a good…

That's less then 10٪. Long term stock market returns are around 7% and considerably less riskier.

Yes, long term 7% is the quoted number, however that can be over a couple of decades (maybe more) and you may need to endure a recession or two.

With a bit of active management, I manage to achieve 6-8% each year, but I avoid large negative hits that an index fund might endure in a bad market.

So, I'm sort of returning similar returns to market, but with less volatility in the bad times. I'm sorta happy with that.

Re: Day Trading for a Living?

#105

Post by harryh » Wed, Sep 11, 2019, 4:01 PM UTC

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).

Probably a bit negative-sum when you take into account commissions and other transaction costs?

Re: Day Trading for a Living?

#106

Post by torben-friis » Wed, Sep 11, 2019, 4:04 PM UTC

osrec wrote: post #83

I've done ok trading stocks and FX, probably enough to live off. There is a caveat however; you need to have a sizeable portfolio to begin with. Otherwise, the risks you'll need to take are simply too large. If you think you're going to turn £5k into £500k in a year, forget it! But turning £5k into £5.3k is certainly doable. Scale that initial portfolio to £5m, and you can take home £300k with relative ease in a good…

But that's like 6% interest rate. The S&P 500's average anual return is 10%... So unless I've got something wrong, you'd be earning far more if you just let your 5m chill there and go watch Netflix for the whole year.

Re: Day Trading for a Living?

#107

Post by codeplea » Wed, Sep 11, 2019, 4:04 PM UTC

wbl wrote: post #86

osrec wrote: post #83

I've done ok trading stocks and FX, probably enough to live off. There is a caveat however; you need to have a sizeable portfolio to begin with. Otherwise, the risks you'll need to take are simply too large. If you think you're going to turn £5k into £500k in a year, forget it! But turning £5k into £5.3k is certainly doable. Scale that initial portfolio to £5m, and you can take home £300k with relative ease in a good…

That's less then 10٪. Long term stock market returns are around 7% and considerably less riskier.

5k to 5.3k is a 6% increase. It seems like day trading should be just about the riskiest/hardest way to get 6% a year.

The S&P 500 returns about 10%/year since its inception. (7% if you adjust for inflation.)

Re: Day Trading for a Living?

#108

Post by eloff » Wed, Sep 11, 2019, 4:04 PM UTC

LargeWu wrote: post #53

matwood wrote: post #35

Earlier quoted context omitted.

Poker isn't gambling, but a game of skill. Are there many people making a living actually gambling on something like craps or roulette.

Making a living on poker? Absolutely. Making a living on craps or roulette? Not mathematically impossible, but highly improbable. How do they get their edge?

Not likely. But there are some strategies that amount to exploiting casino promotions and perks. There used to be some tricks around slot machines - like those near the door had a payout ratio above 1.0. There are probably still tricks along those lines, but if they become well known the casino's change them. You'd be much better of sticking to games of skill.

Re: Day Trading for a Living?

#109

Post by ones_and_zeros » Wed, Sep 11, 2019, 4:04 PM UTC

jmilloy wrote: post #78

ones_and_zeros wrote: post #56

Earlier quoted context omitted.

This is an interesting concept to be teaching business school students. Doesn't this amount to telling you your education is useless?

No, because running a business and stock trading are different things.

running a business is just the opposite side of the stock trading coin.

If the stocks themselves are random walks, then the underlying company performance must be random walks. If your education does indeed improve the outcomes of the business you manage and run then that would mean stock performance can be influenced by things other than luck.

Unless of course you are operating under the premise that company performance and stock performance are unrelated.

Re: Day Trading for a Living?

#110

Post by asdfman123 » Wed, Sep 11, 2019, 4:05 PM UTC

But this is directly in contrary to people who have told me they can make 20% a week day trading!

By my calculations, the guy who told me that a few years back should literally own the entire world by now.