Day Trading for a Living? • Hacker News Board

Re: Day Trading for a Living?

#371

Post by tobr » Thu, Sep 12, 2019, 8:29 PM UTC

vonmoltke wrote: post #64

tobr wrote: post #55

Earlier quoted context omitted.

Ignore the link text here. They’re saying it’s “ virtually impossible”, which would be true of the lottery as well.

I'm on the fence about whether adding the weasel word "virtually" is any better.

It’s not a weasel word. A weasel word is used to mask a lack of sources or data, that’s not the case here.

Re: Day Trading for a Living?

#372

Post by Bubbadoo » Thu, Sep 12, 2019, 9:34 PM UTC

You see it on Instagram all the time... charlatans hawking 'trading systems' on equities, options, fx, etc. They're targeting people who want to 'take control of their lives.' Trading is like professional sports: once in the while a natural comes around, but for most, it's a great way to lose buckets of cash. Even for traders' with a gift, it takes about three years to develop a kind of market sense or intuition. Then there are the markets themselves: with low-latency and HFT, you're almost never in control. You can only hope your algo is close to one the other traders are using. I especially love those flim-flam artists--hawking FX futures trading as a way to financial independence--their own usually. FX markets are controlled largely by central banks who don't always let the market know what they're doing and includes some of the world's most capitalized banks. It's hard to know what to do in a market with all of these massive external forces. Most importantly, the markets have evolved over the last 15 years to a point where if you're not low-touch, you're going to lose. Having said this, last year I beat the S&P soundly. It was a good year. It did take a minimum of 60 hours a week and was a stressful roller coaster at times. This year... forget it. With one of the least stable administrations in place, the market can reverse direction multiple times in a day. You'd better be automated for that.

Re: Day Trading for a Living?

#373

Post by 00N8 » Fri, Sep 13, 2019, 9:02 PM UTC

Teaching people to day trade as a career sounds kind of like teaching people to challenge NBA players to basketball games for money, as a career

Re: Day Trading for a Living?

#374

Post by ivalm » Sat, Sep 14, 2019, 6:55 AM UTC

imtringued wrote: post #358

tcbawo wrote: post #309

Earlier quoted context omitted.

Such returns would not be possible if they grew to a certain size. By closing the fund, they can keep it small enough to limit scaling issues.

That's illogical because people don't get paid in ROI. They get paid in absolute dollars. Earning a 30% ROI on 200 billion dollars is better than earning a 30% ROI on 100 billion dollars.

But they do have other funds. It's simply they want to keep their money in higher return fund and other people's money in the bigger, lower return fund.

Re: Day Trading for a Living?

#375

Post by aj7 » Sat, Sep 14, 2019, 1:58 PM UTC

bob1029 wrote: post #238

aj7 wrote: post #211

Two axioms for small investors: 1. You can’t make money by day trading. 2. Technical analysis is bunk.

I would like to expand on this point because while it is true as stated above, there is more to the picture from my perspective. Day trading and technical analysis are certainly bunk, but the problem I see is people equating day trading with making intelligent stock picks which were NOT driven solely by technical analysis nonsense. For instance, predicting that a certain company's product will steal market share from…

I do the above, but I think it might be vanity. It’s not clear I shouldn’t spread risk via ETFs.

Re: Day Trading for a Living?

#376

Post by [deleted] » Sat, Sep 14, 2019, 11:51 PM UTC

mruts wrote: post #210

inerte wrote: post #173

Earlier quoted context omitted.

Someone will always beat the market, because that's what we're looking for. I think it was on "Thinking Fast and Slow" that I read it's pointless to analyze the stock market winners, since it's a random process. Imagine there are 30 million entities that own stocks in the US - individual, companies, funds, etc... If on a given year half of them did better than average (with some rounding liberty): 1st year: 15M bette…

Okay, let’s do the math buddy. Let’s assume the null hypothesis (the market) has a mean return of 10% and vol of 10%. RenTec’s Medallion Fund has made 80% annualized return before fees in the last 20 years. Assuming the market is a random walk (it’s not), the chance of RenTec making >50% (I don’t think they’ve ever made less than that in 20 years) every year for 20 years is... 3.486 x 10^(-91) The actual probability…

[deleted]

Re: Day Trading for a Living?

#377

Post by simtel20 » Sun, Sep 15, 2019, 4:13 AM UTC

PorterDuff wrote: post #335

simtel20 wrote: post #334

Earlier quoted context omitted.

The issue with LTCM wasn't just that they didn't test sufficiently - the problem is that traders could take positions without supervision and any accountability. My understanding is that any firms that survived that period (and I believe they were all pulling the same shenanigans as LTCM, just maybe to a lesser degree) now have risk management because unlike Lehman/Bear they can't just foist that risk off onto the pu…

As I remember the book, they back tested quite a lot. It's just that whenever they went live with trading reality changed on 'em. Go figure.

They were exposed to a margin call. Trading reality changing or no, if you can get taken out by your prime broker at the end of the day, you need to account for that too and they didn't.