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Day trading- 3 months later, my experience

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This is an amazing post and perfect for me as I am just starting my journey - also from a banking and finance background. I posted something here earlier, but do you use a news feed? if so, which one? if not, why not and what are your thoughts?

Good luck with the next stage of your journey.

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Maybe you need to read about Jim Simmons. In my experience too quant trading is the right and only way to make any money if possible.  

Please note Jim Simmons never revealed any of his trading strategies but he is considered better than George S and Warren B.

 

 

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4 minutes ago, RANZ said:

Maybe you need to read about Jim Simmons. In my experience too quant trading is the right and only way to make any money if possible.  

Please note Jim Simmons never revealed any of his trading strategies but he is considered better than George S and Warren B.

 

 

cheers man, I don't know about him, What do you mean about "quant trading", can you recommend a book. 

Actually I was a quant for a long time, have a Maths PhD but my mistake before was ignoring markets and focusing purely on the numbers and theories. We strongly believed in efficient market hypothesis., the rational investor  and random walk theory but in recent years I realized that people do not act rationally at all and there are opportunities to be had. 

Although I am still in my early days at this so as time goes on I hope to have broader experience 

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28 minutes ago, Monobrow said:

This is an amazing post and perfect for me as I am just starting my journey - also from a banking and finance background. I posted something here earlier, but do you use a news feed? if so, which one? if not, why not and what are your thoughts?

Good luck with the next stage of your journey.

For investments (share dealing ) I do, e.g I bought easyJet months ago  and will sell next week as I think its no longer worth holding and prices have stabilised. 

Others like Zoom are just riding on hot air and the minute it drops I will sell immediately, the fundamentals of that company are shocking and its riding purely on speculation  in my view

And then I hold shares like Coca Cola where you can safely put them in the box and ignore for a decade

For actual day / swing trading I don't read news. I did at the start but I found the problem was that there was just so many moving parts that its was a mess, I was **** about face, jumping back and forth 2nd guessing myself all the time  I majorly cocked up twice, once with Hertz and then again with wirecard. I got caught out as although there was a massive sell off and a bounce back, I bought at the wrong time and got  hammered, I sold out at a 70% loss whereas if I held a few days it  would have made  a50% profit. I am staying out of that game for good now.

I am trying to take it from the group up, understand price action, strategies, entry exits , limits stops order types etc,  Then I will take it up more by adding news feeds, deeper analysis, market sentiment and so on.  

As for news specifically I think it's worth having twitter or any decent news feed,  for major or catastrophic events like bankruptcy, political, company news. One must remember that every indicator we look at has some form of averaging and smoothing going in. A sudden news release and it completely trumps anything in the charts. An indicator can't react fast . In this way I prefer IB platforms TWS  rather than IG (I use ProRealTime) as the software has decent news feed. IG's PRT doesn't but the problem is you can't spread bet on IB.

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Posted (edited)

Here are two examples of what I do every morning, After the trade closes, the next day I take screenshots. Its quite easy once you have a Template set up in Pro real time (10min job) . The text boxes, time frames are all saved so it's just a matter of updating the text. I also make notes (a line or two) on each trade, the minute I place it and again after it closes , as I know I'll forgot quickly when I took the trade

(1) The Silver day trade, My strategy was a long rising EMA / MACD.
The set up was decent enough,  I think but I never put in a limit and I didn't move the stop as soon as the trade was making money (IG min stops are often quite wide)

(2) The SRGY trade - 3 /4 bar play off market open
I saw this off youtube and twice before it worked out well  before I but thought it was just potluck , however I decide to give it another go . As you can see it was about  4R I think and exit timed well. For me because I am retarded I need to write these things down as in real time on 10 min charts , it's hard to think about everything and i miss obvious things. As I had tried this strategy a few times before I remember one thing was becoming clear. The the 2min charts were pointless,. I could never even make the spread back, (hence adding thet green Bid -ASK horizontal band to PRT )

anyhoo, in 3 months time I hope to be a bit wiser

SGRY.jpg

Silver.jpg

Edited by DavyJones
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49 minutes ago, DavyJones said:

cheers man, I don't know about him, What do you mean about "quant trading", can you recommend a book. 

Actually I was a quant for a long time, have a Maths PhD but my mistake before was ignoring markets and focusing purely on the numbers and theories. We strongly believed in efficient market hypothesis., the rational investor  and random walk theory but in recent years I realized that people do not act rationally at all and there are opportunities to be had. 

Although I am still in my early days at this so as time goes on I hope to have broader experience 

That's a good thing you have a math background, Jim is a renowned mathematician. For quant you just need to work on data, say last minimum 10 years of data to find patterns, for example I say if you want to trade on FTSE you need to find patterns for minimum and max high etc...and once you find patterns you need to test your strategies. Quant is much better as it's not an emotional response and it discards all the wrong **** response to news.   

 

 

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I remember testing Elders Impulse system back in 2010 ish, never used it - good post

 

 

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great post and very true i have been trading more or less every day during lockdown i have two suggestions for utube traders to follow both are free and want no money no scams no subscription fees etc  , first is brian watt also known as mr yen this guy has terminal cancer is a mean regression trader u can watch previous shows from channel  , very good over 3 months he has not had a loosing trade he is v opinionated and wont be to everyones taste ,based in usa so starts 1400/1430 uk time second one is :trades by matt : bases in usa  also excellent free and has several help videos , very calm the opposite and very different trading style of brian watt , check them both out  i assure you you will learn from these two guys .both are also on twitter , @realbrianwatt and @tradesbymatt, good luck     

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4 minutes ago, Ed365 said:

great post and very true i have been trading more or less every day during lockdown i have two suggestions for utube traders to follow both are free and want no money no scams no subscription fees etc  , first is brian watt also known as mr yen this guy has terminal cancer is a mean regression trader u can watch previous shows from channel  , very good over 3 months he has not had a loosing trade he is v opinionated and wont be to everyones taste ,based in usa so starts 1400/1430 uk time second one is :trades by matt : bases in usa  also excellent free and has several help videos , very calm the opposite and very different trading style of brian watt , check them both out  i assure you you will learn from these two guys .both are also on twitter , @realbrianwatt and @tradesbymatt, good luck    

cheers for the recommendation !

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Posted (edited)

Nick post, like DavyJones, Started 3 months ago with intention of becoming a trader. Before stepping into trading,  my suggestion is to read about Risk Management and Psychological issues around Win/Lose.  Demo account don't provide and help these issues. 

I lost many trades due to my Psychological issue about loose fear. No one suggested or guided regarding these issues.

Edited by camelliabiz

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14 minutes ago, THT said:

I remember testing Elders Impulse system back in 2010 ish, never used it - good post

This is the problem I have with a lot of these guys, they just rehash the same system and spend 3 chapters as to why its so radical from others

Impulse Trend Direction is just MACD rising, EMA rising, entry on pull back

Robert Miner from "High Probability Strategies Book" has a similar one but he uses  rising Stochastic rather than MACD  and then claims "it's the most powerful strategy in 20 years" . 

No matter how they spin it's just fannying about with a pile of moving averages or rate of change of price  . Maybe its my maths background but when I read this I think, 'how many years did these guys go to school? 2?'

tbh I don't even understand why they are called momentum, it's just rate of change of price, i.e. acceleration , I would have thought that you should take volume into account to be classified as momentum, 

e.g. like a train and a car both accelerating at the same acceleration rate. Which one is going to take longer to slow down  , Apple's share price rising fast by 10 shares a bar is not the same as rising the same price as 200k shares a bar

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1 minute ago, DavyJones said:

This is the problem I have with a lot of these guys, they just rehash the same system and spend 3 chapters as to why its so radical from others

Impulse Trend Direction is just MACD rising, EMA rising, entry on pull back

Robert Miner from "High Probability Strategies Book" has a similar one but he uses  rising Stochastic rather than MACD  and then claims "it's the most powerful strategy in 20 years" . 

No matter how they spin it's just fannying about with a pile of moving averages or rate of change of price  . Maybe its my maths background but when I read this I think, 'how many years did these guys go to school? 2?'

tbh I don't even understand why they are called momentum, it's just rate of change of price, i.e. acceleration , I would have thought that you should take volume into account to be classified as momentum, 

e.g. like a train and a car both accelerating at the same acceleration rate. Which one is going to take longer to slow down  , Apple's share price rising fast by 10 shares a bar is not the same as rising the same price as 200k shares a bar

I have Miners software which includes his DTosc Indicator  - yep they all show the rate of change but with slightly differing maths - to be fair, his DTosc is probably better than most indicators out there, however the best by far is the good old RSI (wilders)

Miner used his in conjunction with EW, which when EW works did time the turns pretty well - I don't trade EW's, although a couple of patterns i use can be classed as EW's

I published a weekly analysis showing multiple indicates - i think people thought i traded them all - the veiled message which no one picked up on was to show the Indicators and how they were similar, as well as how they moved when set correctly with price moves/cycles of the market

Saying that they can be used very well in certain ways - especially in identifying small cycles in the market, crucial turning points and divergences

Should clarify that I do/have traded with Indicators, purely because I like to win often and have one over the market, I also use pure price action and it's this that produces me the greatest % returns year on year.

William Garrett published in the early 70's a book on Investing with Torque - this included volume into the equation, which is a good read, anyone reading it will come away from the book thinking about his cycle analysis and work - if its still in print

My bookshelf use to be packed with books - hundreds - now there's just a handful of the ones that work - I used to pick up a trading book and wonder if it was going to be full of fluff or actually worth something, most books could be condensed into 10-20 straight to the point pages

Keep saying price action is doing exactly the same as it did 150 years ago, all that has changed is the growth aspect of the market

 

 

 

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Great points there Davy. It looks like stops are your big problem. Price movement is rapid both up and down and having faith definitely helps. Trading out of good positions when it swings negative and triggering a stop loss is a common occurrence. Have you tried setting stops with a - 1%, -2%, -3% or even -5% swing.  I concur that losses would be larger, but it also gives opportunity for swings to gain in your favour by similar margins. setting a stop with too much caution can create losses where it is not necessary. Bear in mind bots hoover up small price swings automatically and a very limited stop is bread and butter for said bots. Also you allow for giant trades which alter the price to be absorbed before popping stops. 

I am predominantly an oil and gasoline trader and have long stops and defined limits often smaller than the stops because when big hedge traders drop massive sells I do not get caught out in the wash and when the price swings back in my favour  I collect (often after a frantic few minutes/hours/ sometimes days). Have also been trading Dow exchange futures which is a completely different animal and does not behave according to fundamentals, it would appear to be manipulated and influenced through stimulus and an army of desk jockeys with nothing better to do and no interest on their savings, who cannot short a market as easily a we can, so feel they have to buy to survive. The Dow also swings like a trapeze artist on steroids. Have been running uphill with that and figure to exit when final hedge pops....it's taking its time.

If you believe the trade you have made is correct and have done sufficient due diligence I have found self belief will get one through times of high anxiety. The price is just the price, it is what it is, placing  subjective value on winning or losing is difficult to avoid but a philosophical attitude can get one through and keep one in the green. One's own emotions and panic are the real enemy. 

I wish you good luck and keep your nerve. Have a great weekend.

 

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I've been trading for 10 years and I've never met a day trader that's consistently profitable or lives off his trading.  You'll see a lot of guys who have a hot streak then mysteriously vanish.  I've had hot streaks myself but they don't last. 

Then you have all the wonderful youtube scammers who come and go.  They'll go on a hot streak posting videos then vanish for 6 months then resurface to find fresh suckers.  They are all fake.  Once you figure out what you're doing you have no desire to make youtube videos or share your success.  

Trading on technicals alone doesn't work.  You'll enter a trade because of a chart pattern then it'll go against you and you won't even know why you are in it.  You'll become afraid, emotional and frustrated.  You'll never have any confidence behind what you are doing and if you only focus on one instrument you'll lose sight of what's going on in the entire market.  Market conditions are very important.  Focusing on only 1-2 instruments is a huge mistake too because that instrument might not move much for 6 months or even years.  Fundamentals tell you where you need to be in the market.  Stocks, forex, commodities, ect...  That's just scratching the surface.

You mentioned Anton's class and I have taken all three of them.  I actually think they are really good but it's just a start.  There are a lot of things left out of it that you have to find a way to learn yourself.  It's not easy but at least he gives you a process.  I've also read a lot of reviews and seen youtube videos done by people who have never even taken the class.  It's really hard to get good information out there.  I also like Gregoire Dupont's class as well.  He's similar to Anton but goes much more into detail.

It all takes time.  Not months, but years.  It's a profession like being a doctor or a lawyer.  There's no way to make quick money in a profession.  You'll just get destroyed.  There are ways to cut down your learning curve but you have to find out how to do that yourself and take chances.  

 

 

 

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7 hours ago, THT said:

Keep saying price action is doing exactly the same as it did 150 years ago, all that has changed is the growth aspect of the marke

It doesent trend like it used to

especially commodities

I dont think Darvas and Turtle trading works anymore on daily timeframe? (maybe on some stocks like Tesla?)

https://www.trendfollowing.com/nicolas-darvas/

https://bigpicture.typepad.com/comments/files/turtlerules.pdf

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14 hours ago, 786Trader said:

Have you tried setting stops with a - 1%, -2%, -3% or even -5% swing.  I concur that losses would be larger, but it also gives opportunity for swings to gain in your favour by similar margins. setting a stop with too much caution can create losses where it is not necessary. Bear in mind bots hoover up small price swings automatically and a very limited stop is bread and butter for said bots. Also you allow for giant trades which alter the price to be absorbed before popping stops. 

I generally have a rule of thumb of a stop of 1 bollinger band with should in theory (well based of previous moves) cover 66% of [price moves for that time frame [BB just seems to be a 1 normal standard deviation of a specific window length], but then started to look at other 'accepted' trading strategies. For example as you mention, if your very confident with your trade perhaps a tight stop is advisable so you get several tried at it.It seems like a lot of people advocate it. On the other hand , the usual price volatility can knock you out quickly. I never considered automated trading bots, that's quite interesting! Thanks!

I find that since I started keeping detailed records , the mist is starting to SLOWLY clear. I guess many further down the line don't need this headache and have a natural feel for the markets. For me it's still a struggle to see where the bulk of the problem lies, the strategy the stops, or the market. and so  on

I think what I might do is have 5 go to assets and just work with them. Gold seems to be a good one for me as when it starts to rise a moving a MA with  retracement is a high probability strategy . I tried the same thing with banking stocks and it was unsuccessful, it could be the market conditions , no idea

My aim is to just limit the sheer amount of moving parts to a trade and focus  on my hit rate for now. As I say I have  no expectation of making money this year

 

15 hours ago, 786Trader said:

The price is just the price, it is what it is, placing  subjective value on winning or losing is difficult to avoid but a philosophical attitude can get one through and keep one in the green. One's own emotions and panic are the real enemy. 

  yes this was a big  issue for me initially but since I reduce the risk drastically, it much of a problem now

Another related point I didn't mention above is : you learn alot about yourself doing this game. For me the actual cash is not the primary driver, I never have been materialistic and If I could make modest returns in the long run I'd be happy. The real driver is being good at something as I can be pretty OCD on things. Whether that's a benefit or a hindrance I am not sure! Time will tell.

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On 17/07/2020 at 06:55, DavyJones said:

4. You are essentially trying to make cash like flipping a coin over the long run with one side weighted in your favour. 

 

Hmm.  They call this having an 'edge'.  :D

That minds me, where was @Caseynotes yesterday?   Hope he's okay!  He did say he was having a family barbecue / get together.

 

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Posted (edited)
On 17/07/2020 at 06:55, DavyJones said:

Most news, ideas is **** and pointless

I agree, trading the news isn't technical analysis anyway.  All the 'old time' tehcnical analysts never 'traded the news', Magee famously never even read the financial newspapers.  You're either looking for trends or changes in trends.

Another thing that doesn't seem to matter is volume.  Yet you read old-time technical analysts banging on about it all the time.

Stan Weinstein wrote a book on how to profit from trading stocks in the 80s, and guess what, nowadays he makes his money from hawking a newsletter to financial institutions.  He'll probably retire a wage slave just like the rest of us :)

That famous candlestick guy - Nison - makes his cash from seminars and talks and selling training courses.  This is a recurring theme ;)

Edited by dmedin
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Posted (edited)

Davy.

I am not a guru but I have been following your progress.

To me the problems are quite clear.

You need to take a pause.  You need to have a plan of how you will trade.  You need to have a better understanding of what drives the markets you are looking to trade.  You need someone to talk to (a mentor) that can keep you accountable to your actions.  You need better money management.

 

You have an idea of how to trade, you just need to form that idea into a robust trading strategy. One which allows you to take several losses in a row but doesn't wipe you out.  One which if the market conditions change (think VIX at 40 versus VIX at 25) you need to be able to say, strategy is underperforming because of X and adjust accordingly.

Edited by intexNev
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15 hours ago, Kodiak said:

It doesent trend like it used to

especially commodities

I dont think Darvas and Turtle trading works anymore on daily timeframe? (maybe on some stocks like Tesla?)

https://www.trendfollowing.com/nicolas-darvas/

https://bigpicture.typepad.com/comments/files/turtlerules.pdf

 

I've not looked at those methods for years, but funnily enough I have for years employed a sort of Darvas box to my weekly charts but my box is very very simply the monthly range movement drawn onto a weekly chart (see chart) but all i will say is if they worked once, then they will definitely work again during the same market conditions - markets aren't doing what most people think they are doing, markets are dynamic, in my How to Win thread I mention you have to view the markets in a differing perspective to that forced onto a 2 dimensional chart - the reasoning for that is the reason why the dynamics of the markets change and alter and for methods that once worked seem to have stopped working

I tell people to imagine a square box on a stick - the box is right in front of your vision so you can only see one side in your view, for years you see only one side of the box then suddenly it's rotated overnight and you get another side, only this time the market doesn't conform to the previous sides rhythms, cycles or methods

 If this happens in the markets then that could be the explanation as to why once good methods worked and then suddenly stopped [I spent 2010-12 exploring that question]

 341.thumb.JPG.d112bc479cd49ed9cf4300b6646fb3cb.JPG

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JFC, it's talking total b*llocks again.

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5 hours ago, dmedin said:

Stan Weinstein wrote a book on how to profit from trading stocks in the 80s, and guess what, nowadays he makes his money from hawking a newsletter to financial institutions.  He'll probably retire a wage slave just like the rest of us :)

That famous candlestick guy - Nison - makes his cash from seminars and talks and selling training courses.  This is a recurring theme ;)

Yeah look I am, in under no illusion that this could be a total waste of time, in fact it more satisfying the curiosity I have  had about this for years. 

I think there are other fringe benefits to trading , such as starting to take note about general money management. For example I remortgage my property a month ago. I was paying an extra 1.5% for probably 8 year than I really needed to. Leaving cash just sitting in a current account for a decade and so on all has long term significant impacts on your wealth. I am approaching 50 and the best thing I ever did money wise was getting on the property ladder , No one really thinks about this or pension funds in your 20's (i didn't)  , but the significant savings or changes in potential wealth can be huge all for a just a change in attitude . Even if you quit trading , just dumping some money into the S&P, FTSE and let it compound away for decades is well worth doing 

But like the "trading experts", I am wise after the fact 😄

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On 17/07/2020 at 15:55, DavyJones said:

I thought i summarize my experience so far day trading in case any newer folks are interested 

Day trading is much harder than swing trading and especially at those lower time frames. 

From 100+ day trades so far I am certainly no expert and I like being honest, I am on average losing  but I learnt a lot. My thoughts so far are:

1. Forget 95% of youtube,  it's full of turds just trying to market courses, **** out their channel. Same with forums, no matter what topic it is (fitness, languages), a lot of people lie their asses off and pretend they are experts but in fact know jackshit about it. Even the supposedly guru's are full of sh@t. For example the guy who wrote that best seller "Trading for a living", Dr Elder. He came up with his own "impulse system" and brags about it. It just  MACD and Moving average, nothing more . Aslo on their own private forum (which I was on for $60 a month) the group consistently underperform the S&P and even their best Gold start traders barely out perform it. Everytime you asked a question you got told, "buy this extra course for $100's  Its the same with Anton Kreil, $15k for a course? I have no idea if he is good or not but its seems to me that it's the easiest thing in the world to prove your validity. Publish your trading accounts, get them audited by an auditor, show tax statements, do live streaming etc If I was building a business as a trainer that's what I would do. 

2. Having said that there is a lot of useful information that if you look at it objectively it can be great advice. Keep a word document and write down your own points. Ignore every cherry picked chart they show you (apart from the educational content), use your own, scroll back a 500/1000 bars and then start looking at the extreme right hand bar, moving forwards bar by bar and ask yourself "ok what will I do here", you will soon  find out that even if you got the direction right, spreads, commissions, trend reversed too quickly,  stops etc killed it . It will paint a very different picture than what youtube baseball-wearing-cap-on-backwards hipster is telling you.  

3. Day trading is a job, not a hobby and a difficult one, you need to put in the hours, research, do your homework, keep a trade journal take notes and analyze what you have done etc

4. You are essentially trying to make cash like flipping a coin over the long run with one side weighted in your favour. 

5. Forget working on hunches or "I think  the stock price will go up / down" You are doomed to failure. A proper system is the only way  

6. Risk Management is the most important concept by far in my view. The generally advice is never risk more that 1 - 2% on a trade. I personally think that is too much . I would keep it at 0.5% max until you work what you are doing. 8 losing trades in a row at 1-2% and it starts to hurt and self doubt really creeps in. 

7. Demo always seems like a good idea but in reality it never worked for me. I put on trades forget about them, have no psychological connection to wins / losses. You need to use real money, even if it's just the bare minimum to see those  losing ££ . I have put on 4 trades over last few days.All 4 were up 2 x Risk but because I am a total **** I didn't cash out and all hit stops resulting in 4 losses. It was only £80 between all 4 but the fact I got greedy (yet again!) annoys me 

8. If your profitable with a year you're lucky.  My aim is to just break even by christmas to see if I can sustain a modest living in this. I have income from other sources anyway. 

9. The reality is that its a heck of a difficult job to make money day trading., Brokers  like IG, and all the others make money by continual flow of clients coming in losing cash and eventually leave, hence the large marketing. I don't blame them, it's a business model, not a hippy self help group, but just be realistic.

10. Most news, ideas is **** and pointless. I worked in investment banking on the trading floor for 15+ years. Every Monday we had to come up with a trade idea for clients , Derivatives / inflation, bonds, 90% of them were sh@t, I know I wrote them, we just had to do something. It's the same with market news, broker webinars etc, trading channels / ideas etc, the staff are tasked to do something. More noise, more videos, more website hits,  more trades = more commissions / sales.

11. Don't jump around from stock to stock, to FX, to crypto. I believe if you are not making money in two or three the problem is you, not the asset.  They all have their own personalities, e.g. Coca cola  barely moves, Tech stocks jittery as hell,  respond to news, others hardly at all, so you need to spend sufficient time on see what influences what. 

12. as above, don’t jump around  with different trading strategies, 200 different indicators etc. You need to limit all the moving parts and focus  

13. Best way I found to improve, (so far) , For every trade, I immediately write down why  I entered the trade (note 5) , for example

Long MA Strategy 
(a) Rising 200MA
(b) Rising 20MA ,
(c) 20MA crosses over 200MA
(d) price near 20MA

seems like a winner on paper but I still kept getting stopped out. Then afterwards write down what happened, e.g. after the trade exit I put  screen shots of 3 time frames (daily hourly / 15min) into a PowerPoint and detailed where I went wrong. Several things became clear such as
- 2min charts was pointless, you would never make the spread back
- The risk / reward (1:2) was to high, a 1:1.2 would have paid off > 50% of the time .
- I was fannying around with stops, for no reason. etc
- I'm putting on trades because I'm retarded, e.g. long trade,  on a bearish trend in larger time frame

The point being, you start to learn about your  technique and they way you trade which no book can possibly know.

Heck it's boring but I am starting to see patterns about the way I trade (= c@ck up). The best traders I saw in banks were the OCD ones. The wannabe Burberry wearing chavs all got pushed out or sent to Starbucks to pick up the coffee

 

The million dollar question:

can you make money? At this stage, I am still undecided.  I think there is light at the end of the tunnel but its going to require work, a plan and mental commitment for sure.

Anyway, long post but hope it's useful for some folks

(apologies for the obscenities!) 

Ive been learning to day trade for 3 months now and the amount of BS out their is staggering to say the least.Its hard to find out where to start. But with a little common sense and logic I found some learning platforms for free to learn off. I took a professional approach to this as this is a business and should be treated as such. I have been trading on the Demo account for 4 weeks now and was up and down whilst learning the platform and trading and dipping into the how thins worked. I went down to $19,100 on the demo Acc but now the balance is $41,720. Im a bit worried that things are different with trades in a live account with real money though. If any one wants good content to learn off the bullish bears are excellent, also Jared Wesley of live traders,and Ross cameron of Warrior trading great free content to learn off. Remember theirs allot to learn to be successful in day trading.

 

 

 

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A really good post Cheers. I am kind of in a same boat. I was a pharmacist for 10 plus years and due to some clever backstabbing by my buisness partner  I lost a lot of money and that made me kind of turned off from that profession for now. I used to day trade in my pharmacy school days and so when the country locked up due to Covid`0 I activated my old IB account and got into a free day trading chat room run by Really Good traders at Trade-Ideas. I would say that in the past 4 months i have learned a lot from those guys. learned to set scans pre market and aftermarket for early trades, momentum and Gap scanner set up for gapping stocks and stocks that are piercing thru the MA's and daily resistances. I am not too much of a chart indicators kind of guy i am ok with just having 9,20,50, 200 EMA and VWAP. It was my pleasure to read your post. I would suggest maybe taking out a small subscription to this servise called Trade-Ideas. It has helped me immensely. And I would love to share ideas with you and take your thoughts on things if that is ok with you. 

Cheers 

 

JB

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You certainly can make money.  Great post btw.  I only started trading April 19, and it was a trial by fire for sure.  However, within 6 months it was clearly evident that it was very difficult or impossible to trade Small Cap Stock while Spread Betting.

I'll basically sum Day Trading up and Spread Betting in one small paragraph:

You can do it, but it's extremely difficult.  The lack of Small Cap Stock available while Spread Betting is probably the only real issue that matters.  Everything else is simply Trading Good or Bad strategies.

If you consider that trading Breakouts (for instance) requires a good selection of stocks to trade and only 1 or 2 of them have the greatest potential, then realising that most of the potential Breakout Stocks aren't actually available with IG or Spread Betting dictates the odds in a forever decreasing pit of despair. 


However, finding stocks to trade Intra Day or Swing isn't at all a problem.  Buying Shares is a breeze too.

I've proven to myself very recently that with only £20 you can generate  a profit Spread Betting small cap stock.

My problem has most often been not taking profit when it's there and holding out for more.  My current win rate is 45%, but my PL is 1.4.  However, my Shares account was up 30% this week but I'm anticipating a full reversal on all of them.


 

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On 17/07/2020 at 06:55, DavyJones said:

I thought i summarize my experience so far day trading in case any newer folks are interested 

Day trading is much harder than swing trading and especially at those lower time frames. 

From 100+ day trades so far I am certainly no expert and I like being honest, I am on average losing  but I learnt a lot. My thoughts so far are:

1. Forget 95% of youtube,  it's full of turds just trying to market courses, **** out their channel. Same with forums, no matter what topic it is (fitness, languages), a lot of people lie their asses off and pretend they are experts but in fact know jackshit about it. Even the supposedly guru's are full of sh@t. For example the guy who wrote that best seller "Trading for a living", Dr Elder. He came up with his own "impulse system" and brags about it. It just  MACD and Moving average, nothing more . Aslo on their own private forum (which I was on for $60 a month) the group consistently underperform the S&P and even their best Gold start traders barely out perform it. Everytime you asked a question you got told, "buy this extra course for $100's  Its the same with Anton Kreil, $15k for a course? I have no idea if he is good or not but its seems to me that it's the easiest thing in the world to prove your validity. Publish your trading accounts, get them audited by an auditor, show tax statements, do live streaming etc If I was building a business as a trainer that's what I would do. 

2. Having said that there is a lot of useful information that if you look at it objectively it can be great advice. Keep a word document and write down your own points. Ignore every cherry picked chart they show you (apart from the educational content), use your own, scroll back a 500/1000 bars and then start looking at the extreme right hand bar, moving forwards bar by bar and ask yourself "ok what will I do here", you will soon  find out that even if you got the direction right, spreads, commissions, trend reversed too quickly,  stops etc killed it . It will paint a very different picture than what youtube baseball-wearing-cap-on-backwards hipster is telling you.  

3. Day trading is a job, not a hobby and a difficult one, you need to put in the hours, research, do your homework, keep a trade journal take notes and analyze what you have done etc

4. You are essentially trying to make cash like flipping a coin over the long run with one side weighted in your favour. 

5. Forget working on hunches or "I think  the stock price will go up / down" You are doomed to failure. A proper system is the only way  

6. Risk Management is the most important concept by far in my view. The generally advice is never risk more that 1 - 2% on a trade. I personally think that is too much . I would keep it at 0.5% max until you work what you are doing. 8 losing trades in a row at 1-2% and it starts to hurt and self doubt really creeps in. 

7. Demo always seems like a good idea but in reality it never worked for me. I put on trades forget about them, have no psychological connection to wins / losses. You need to use real money, even if it's just the bare minimum to see those  losing ££ . I have put on 4 trades over last few days.All 4 were up 2 x Risk but because I am a total **** I didn't cash out and all hit stops resulting in 4 losses. It was only £80 between all 4 but the fact I got greedy (yet again!) annoys me 

8. If your profitable with a year you're lucky.  My aim is to just break even by christmas to see if I can sustain a modest living in this. I have income from other sources anyway. 

9. The reality is that its a heck of a difficult job to make money day trading., Brokers  like IG, and all the others make money by continual flow of clients coming in losing cash and eventually leave, hence the large marketing. I don't blame them, it's a business model, not a hippy self help group, but just be realistic.

10. Most news, ideas is **** and pointless. I worked in investment banking on the trading floor for 15+ years. Every Monday we had to come up with a trade idea for clients , Derivatives / inflation, bonds, 90% of them were sh@t, I know I wrote them, we just had to do something. It's the same with market news, broker webinars etc, trading channels / ideas etc, the staff are tasked to do something. More noise, more videos, more website hits,  more trades = more commissions / sales.

11. Don't jump around from stock to stock, to FX, to crypto. I believe if you are not making money in two or three the problem is you, not the asset.  They all have their own personalities, e.g. Coca cola  barely moves, Tech stocks jittery as hell,  respond to news, others hardly at all, so you need to spend sufficient time on see what influences what. 

12. as above, don’t jump around  with different trading strategies, 200 different indicators etc. You need to limit all the moving parts and focus  

13. Best way I found to improve, (so far) , For every trade, I immediately write down why  I entered the trade (note 5) , for example

Long MA Strategy 
(a) Rising 200MA
(b) Rising 20MA ,
(c) 20MA crosses over 200MA
(d) price near 20MA

seems like a winner on paper but I still kept getting stopped out. Then afterwards write down what happened, e.g. after the trade exit I put  screen shots of 3 time frames (daily hourly / 15min) into a PowerPoint and detailed where I went wrong. Several things became clear such as
- 2min charts was pointless, you would never make the spread back
- The risk / reward (1:2) was to high, a 1:1.2 would have paid off > 50% of the time .
- I was fannying around with stops, for no reason. etc
- I'm putting on trades because I'm retarded, e.g. long trade,  on a bearish trend in larger time frame

The point being, you start to learn about your  technique and they way you trade which no book can possibly know.

Heck it's boring but I am starting to see patterns about the way I trade (= c@ck up). The best traders I saw in banks were the OCD ones. The wannabe Burberry wearing chavs all got pushed out or sent to Starbucks to pick up the coffee

 

The million dollar question:

can you make money? At this stage, I am still undecided.  I think there is light at the end of the tunnel but its going to require work, a plan and mental commitment for sure.

Anyway, long post but hope it's useful for some folks

(apologies for the obscenities!) 

 

 

thank you for sharing your experience on day trading. I must say you are absolutely spot on, i'm experiencing the exact same problems, i've been trading on my live account for a month and i'm loosing money. the problem is me failing to deal with my emotions, not being able to create and follow an effective plan, lack of discipline  etc. 

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That is a great post and is pretty much what I have discovered in a year of day trading. I've been trading and reading up as I've gone along, about 20 books thick now. 

Found demo account pretty useless part from working out how the exchange fees and interest rates would cost. (I trade a mix of swing and when I feel like staying up late I DT). I'm in Australia so only first half the year works well when the day light saving times means I can start at 1130 instead of 130AM :S.

It's interesting to see you've worked on the trading floor. When I first started, I met heaps of guys who worked as analysts, worked in finance, worked at goldman but none of them seemed to know much about day trading or how to do it. Day trading itself is a whole different ball game. A lot of these guys seems to loose a lot of money themselves anyway. I guess they are all trained just to do one thing and just that. 

We run a few businesses so I know the only real money making in this is the broker. When there's a gold rush, sell shovels. I've surprisingly made a small profit in my first year but yes, this is a full time business/job if you want to do it properly.

I remember reading somewhere that this is more control of your emotions than the technical side. And I found this very much to be true. When I lost money it was the emotions getting the most of me instead of my rules and plan. I would exit positions too early on swing trades or not hold my positions long enough according to my plan. Day trading I would get too greedy and not take profits as planned. 

No plan, no money.

*It's interesting that you mentioned the risk reward. Everywhere I read they say risk reward needs to be at least 1:2. I found this almost impossible and found just like you a 20%-30% reward was always possible. 

 

Also, to be honest, in DT/swing trading, like every business, you need lots of money to make decent money. If you're only trading with $10-20k I find it quite tiring, perhaps make $80-100k a year? That's why they say it's always easier with someone elses money, get 5% on $4 million and you're good for the year. Likewise, at largest sums, it's harder to make money, which is why firms like Renaissance eventually boot out their original investors.

On 20/07/2020 at 04:42, JB1969 said:

I am kind of in a same boat. I was a pharmacist for 10 plus years

Lol me too. I left pharmacy after 10 years, DT is a lot of difference from the normal pharmacist mentallity.

 

 

 

Edited by JackSparrow
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On 25/07/2020 at 21:00, shuheb said:

thank you for sharing your experience on day trading. I must say you are absolutely spot on, i'm experiencing the exact same problems, i've been trading on my live account for a month and i'm loosing money. the problem is me failing to deal with my emotions, not being able to create and follow an effective plan, lack of discipline  etc. 

It definitely gets better ..... very slowly.... , I still make stupid and emotional mistakes and its those that wipe out the last 10 profitable trades . I find with those trades you really need to write down and force yourself to revisit it, even if it's just have a look at the MA or something , it's too easy to block out the bad trades and move on always living on a promise of a win. Hence the YT gurus. 

 

On 26/07/2020 at 19:27, JackSparrow said:

t's interesting to see you've worked on the trading floor. When I first started, I met heaps of guys who worked as analysts, worked in finance, worked at goldman but none of them seemed to know much about day trading or how to do it. Day trading itself is a whole different ball game. A lot of these guys seems to loose a lot of money themselves anyway. I guess they are all trained just to do one thing and just that. 

 

Indeed I have a PhD in maths, was CFA registered in London but really it doesn't give you much advantage  . In fact it can quite a disadvantage as you  can be quite arrogant thinking you know more than the local plumber at trading . This ends up being costly as they wont admit they are wrong.  You get stock in your previous way of thinking Also when I worked in banking TA is often looked as financial alchemy, or reading star signs.  It's often scorned at by the boffins as stuff for the low IQ. I was like that too i have to say. E.g fibonacci series, means diddly squat in reality and there is now logic to the number series applied to finance , If you called it   三角 which means a lot of a Chinese person., It's a similar fundamental concept and predates Fibonacci by a long way but no western person would even consider it on their charts. 

But the point is that many others traders do have faith in it and draw support  resistance lines around it so will influence their decisions

 

On 26/07/2020 at 19:27, JackSparrow said:

Also, to be honest, in DT/swing trading, like every business, you need lots of money to make decent money. If you're only trading with $10-20k I find it quite tiring, perhaps make $80-100k a year? That's why they say it's always easier with someone elses money, get 5% on $4 million and you're good for the year. 

I guess that's the advantage of SB / CFD, if you are really good you can leverage out but the changes of being good are slim

 

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On 24/07/2020 at 23:10, nit2wynit said:

However, finding stocks to trade Intra Day or Swing isn't at all a problem.  Buying Shares is a breeze too.

I've proven to myself very recently that with only £20 you can generate  a profit Spread Betting small cap stock.

My problem has most often been not taking profit when it's there and holding out for more.  My current win rate is 45%, but my PL is 1.4.  However, my Shares account was up 30% this week but I'm anticipating a full reversal on all of them.

I have come to the preliminary conclusion that only fast moving stocks or big news you can make money DTing. I did ok on EasyJet recently and FTSE is absolutely tanking today (i got in late) but for the majority  of stocks  is just not worth trying .

I think I will start looking more towards swing trading in the next month and easy off DT. The overnight risk is a concern but as you say you can always use  Share dealing but with UK stocks you have the charges. US I find much better 

 

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