# Do you have to day trade to trade full time?



## nomore4s

Obviously the answer is no but I would like to know is it harder to pull a fulltime income from the markets without daytrading? And if it is harder, how much harder? Are capital requirements any higher?

I eventually want to use trading as my primary source of income but I don't really want to daytrade to do it as I find it quite stressful and tbh don't really enjoy daytrading, so I might as well keep doing what I'm doing if it came to a choice.

Thoughts?


----------



## maxiewawa

*Re: Do you have to daytrade to trade fulltime?*

As a newb i'm wondering the same question.

What tactics would someone who's only looking to trade, at most, once a week, take?


----------



## nomore4s

*Re: Do you have to daytrade to trade fulltime?*



maxiewawa said:


> As a newb i'm wondering the same question.
> 
> What tactics would someone who's only looking to trade, at most, once a week, take?




I would imagine trading once a week would make it quite hard to draw a regular income (to live off) from the markets but maybe one of the guys with a long term (weekly) system could give more details.

My question relates to trading daily and off EOD or at the most 4 hour charts (forex), I just don't want to be constantly monitioring the markets.

I know guys like Nick Radge do well without daytrading but he also runs a business.


----------



## Aussiest

*Re: Do you have to daytrade to trade fulltime?*

Yes, i think you can. You'd have to hold for more than a few days though and pick your entries and exits well. For example, if you had have bought LEI late last week for 21.47, you could have sold today at 24.50. BHP also got down to around 32, it has opened today > 35. I think you would have to have a larger capital base, something in the vicinity of 150k+ as you'd be buying 1k units+ of a few selected stocks.

I read an interview in one of those share trading mags recently (i'll try to reference it for you, i'm not in office at moment) where a particular trader said that you may not make $ for some weeks, that you have to look at it in terms of monthly or "annual" revenue.


----------



## Nick Radge

*Re: Do you have to daytrade to trade fulltime?*

My secret (ha!) is twofold:

1. A large capital base. I look to make a return on my capital and compound it over the longer term using a variety of mainly trend following techniques. nothing special with these - just taking a longer term approach to their application. 

2. Running a business on the side as a hedge for the tough times when they come along. A friend I play golf with suicided about a month ago, not because he had lost a great deal of money, but because he couldn't make ends meet from his trading. He had placed so much pressure on himself and his family that he opted for the life insurance option rather than loss of face of getting a job.

My advice to people wanting to be successful at this game is to keep your day job, learn to trade using a simple yet robust trend following approach and remain patient. The foundations of this concept are simple to grasp, however its human emotion - lack of patience, tenacity, discipline etc, is where most (the 95%?) fail.

Nick



_
This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision._


----------



## wayneL

*Re: Do you have to daytrade to trade fulltime?*

FWIW:

Delta Neutral option strategies go a long way to filling the bill. (with caveats)


----------



## mazzatelli1000

*Re: Do you have to daytrade to trade fulltime?*

Options do require higher capital requirements in general though.

Being involved with HF's that pay you a base as well is always good too, but I think the OP is to be completely independent.


----------



## Sean K

*Re: Do you have to daytrade to trade fulltime?*

Don't 'day trade' as predominant means of income. Probably because I'm crap at it.

But have been 'trading/investing' full time for 4 years, making an income.

Agree with Radge, need a decent capital base for a start.

But you don't necessarily need another business.

Just another source of income. Like a partner.


----------



## Temjin

*Re: Do you have to daytrade to trade fulltime?*

I suggest you look at this from a different perspective.

If you know there is a lot of stress in full time trading (whether it's day trading or longer term) to generate the necessary income for your day to day expense, then why do it?

I just realise Nick had made a post while I'm typing this, but his last advice is the key. KEEP YOUR DAY JOB and in my opinion, only until you have accumulate sufficient capital to generate enough passive income to live on without relying on the profits from your trading account.

Trying to generate enough profit every day to pay for your next bill is EXTREMELY stressful and should be avoided at all cost. (lack of patience, impulse trade to get back that lost, etc, like Nick was saying) 

So never expect a "wage" type income from full time trading. Treat it as an investment where you want to use your risk capital (that you can afford to LOSE, and maybe at least two or three times) and then build it up through the magic of compounding. 

Now back to your original question on how hard is it to generate "income" from the market without full time day trading, it depends on your capital of course. Nick already mentioned it too, a large enough base so you can practise your position sizing strategy while generating enough profit size. 

Day trading usually mean more trading opportunities. If you have multiple strategies on multiple markets, you can still generate enough opportunities and thus profit from it. (Of course, depends if those strategies are actually profitable!)


----------



## tech/a

*Re: Do you have to daytrade to trade fulltime?*

Firstly I don't trade full time and don't wish to.
It would bore me to death.

Any decent business with a decent return would set you back around $500k or more. (Sure there are rare exceptions). A good wage would need to be $150k + or 30% return on investment,most business brokers would agree with this returns.

While volatility is rampant the day traders can have a ball.
When it slows then they have real issues turning profit.

Getting on the right side of the long term market and being able to trade long or short is the key in my view.
Getting on the right side at the right time and sticking with the long term move brings profit in big chunks.

Setting the position will often require many short term losses.However wider initial stops and adding to positions as they mature can bring amazing returns.

I don't know if your a Chartist subscriber but if you are take a look at Radges "Growth Portfolio" and it sticks out as plain as day light. (Even without adding to positions).

So my response is no and like you not preferable.


----------



## mazzatelli1000

*Re: Do you have to daytrade to trade fulltime?*



kennas said:


> Just another source of income. Like a partner.




LOL
This is funny, but true at the same time


----------



## Trembling Hand

*Re: Do you have to daytrade to trade fulltime?*

I would ask the question who actually makes a fulltime living out of trading. Very hard gig on a small capital base. You have to realise that every week you pay yourself is a drag on performance. Like another bad trade. Probably contributes to failure more than lack of trading ability.

Nick thats shocking news!!


----------



## nomore4s

*Re: Do you have to daytrade to trade fulltime?*



Nick Radge said:


> My secret (ha!) is twofold:
> 
> 1. A large capital base. I look to make a return on my capital and compound it over the longer term using a variety of mainly trend following techniques. nothing special with these - just taking a longer term approach to their application.
> 
> 2. Running a business on the side as a hedge for the tough times when they come along. A friend I play golf with suicided about a month ago, not because he had lost a great deal of money, but because he couldn't make ends meet from his trading. He had placed so much pressure on himself and his family that he opted for the life insurance option rather than loss of face of getting a job.
> 
> My advice to people wanting to be successful at this game is to keep your day job, learn to trade using a simple yet robust trend following approach and remain patient. The foundations of this concept are simple to grasp, however its human emotion - lack of patience, tenacity, discipline etc, is where most (the 95%?) fail.
> 
> Nick




Thanks Nick.

I'm in a pretty good position atm and run a profitable business and at this stage I won't be looking to go fulltime in the market for a number of years.

I would also be thinking of 'leasing' my business out which would then let me draw an income from it still and I would also be looking to run business projects on the side - hence part of the reason of not wanting to daytrade as I would have other distractions.

Sad news indeed Nick.



wayneL said:


> FWIW:
> 
> Delta Neutral option strategies go a long way to filling the bill. (with caveats)




Unfortunately options is one thing I haven't really had a chance to study but is next on the list but until I have the time to study them properly it will have wait.


----------



## wayneL

*Re: Do you have to daytrade to trade fulltime?*



nomore4s said:


> Unfortunately options is one thing I haven't really had a chance to study but is next on the list but until I have the time to study them properly it will have wait.



Yep, good decision. Options do require a time commitment to learn.


----------



## Julia

*Re: Do you have to daytrade to trade fulltime?*



Aussiest said:


> Yes, i think you can. You'd have to hold for more than a few days though and pick your entries and exits well. For example, if you had have bought LEI late last week for 21.47, you could have sold today at 24.50. BHP also got down to around 32, it has opened today > 35. I think you would have to have a larger capital base, something in the vicinity of 150k+ as you'd be buying 1k units+ of a few selected stocks.



Agree.   I pull a living in this way.   e.g. if you have, say, 2000 MQG and it moves around $4 over a few days, that's $8000.


----------



## nomore4s

*Re: Do you have to daytrade to trade fulltime?*



Trembling Hand said:


> I would ask the question who actually makes a fulltime living out of trading. Very hard gig on a small capital base. You have to realise that every week you pay yourself is a drag on performance. Like another bad trade. Probably contributes to failure more than lack of trading ability.




The more research I do the more I realise just how big a capital base is needed to be able to do what I plan to do. Not just for trading but for my other business plans.
I already have a decent size capital base but am currently only using around 25-50% for trading but I would probably need to double my base from here to have any chance of making this work.


----------



## sleepy

*Re: Do you have to daytrade to trade fulltime?*



Nick Radge said:


> My advice to people wanting to be successful at this game is to *keep your day job*, learn to trade using a simple yet robust trend following approach and remain patient.




I agree with Nicks comments that for the majority using a trend following system would be the best and/or most profitable approach in the long run.

However, I would also imagine that most people who are looking to trade full-time would have an issue with the first point  ... as its likely they are wanting to go down that path of trading full-time because they either:

a) seriously dislike their current job/career, 
b) dont have regular work/income, 
or c) they're in a job/career that doesnt provide them with enough disposal income to fund their current lifestyle, let alone provide enough trading capital to get started.

sleepy


----------



## ajjack

*Re: Do you have to daytrade to trade fulltime?*

Right on Julia, thats the strategy I use.

Only trade the Big Blue ones eg MQG, CBA , ..these both
moved over $4 this week.
Got to be quick to get in and out.


----------



## Aussiest

*Re: Do you have to daytrade to trade fulltime?*



Julia said:


> Agree.   I pull a living in this way.   e.g. if you have, say, 2000 MQG and it moves around $4 over a few days, that's $8000.




Aww Julia, that's awesome! My problem is i don't hold for long enough. 

Julia, how do you get the patience to wait for those larger moves? Do you have a hobby that you indulge in?


----------



## bonkerrs

*Re: Do you have to daytrade to trade fulltime?*

I used to want to do it... trade full time. But through reading posts here and picturing myself in those situation some posters talk about, I've realised it isn't for me - stress/boredom/constantly monitoring the market (staring at the screen). Most of them I didn't really think about before ASF.

Sure, I hate my job (very much). But at least it is a steady income regardless of whether I have a good or bad day. Ideally, I would like to be in a position where I can make shares and employment (different job - part time only) provide an income. That is my Zen 

This brings me to ask. What do you consider a comfortable income? Being able to make mortgage repayments and take the kids out to dinner/movies every now and then (if this is you, it's me)? Or doing all that and drive the latest BMW too? My comfortable may not be your comfortable.

edit: Nick, very sorry to hear about your mate. That is terrible.


----------



## Trembling Hand

*Re: Do you have to daytrade to trade fulltime?*



ajjack said:


> Got to be quick to get in and *out*.




Funny I always thought getting out too quick was one of the big reason why people fail.

Not enough outliners to pay for the mistakes and expenses. R:R unfortunately requires letting some run.


----------



## ThingyMajiggy

*Re: Do you have to daytrade to trade fulltime?*



Aussiest said:


> Aww Julia, that's awesome! My problem is i don't hold for long enough.
> 
> Julia, how do you get the patience to wait for those larger moves? Do you have a hobby that you indulge in?




Well done to Julia if she does that....MQG is on steroids, to hold it for that long, the way that thing gaps and jumps around.

Personally, I want to day trade for a living. I'm not on much per week working my normal job, so I figure if I can get good enough, and just at least match my regular job, that is enough for me, then build from there. I can potentially make my weeks wages on 1 trade, then I can have the week off if I wanted....and not "monitor the markets all day"....not that I would, I LOVE watching the markets and wouldn't rather do anything else, even if there wasn't money to be made, I would still do it, I find it fascinating.


----------



## tech/a

*Re: Do you have to daytrade to trade fulltime?*



ThingyMajiggy said:


> Well done to Julia if she does that....MQG is on steroids, to hold it for that long, the way that thing gaps and jumps around.
> 
> Personally, I want to day trade for a living. I'm not on much per week working my normal job, so I figure if I can get good enough, and just at least match my regular job, that is enough for me, then build from there. I can potentially make my weeks wages on 1 trade, then I can have the week off if I wanted....and not "monitor the markets all day"....not that I would, *I LOVE watching the markets and wouldn't rather do anything else, even if there wasn't money to be made, I would still do it, I find it fascinating*.





Youll get over it.


----------



## nunthewiser

*Re: Do you have to daytrade to trade fulltime?*

i see no ones mentioned the weeks that go by when one takes loss after loss yet ........

but hey i dont spose that happens to all the succesful traders here hey ?

i know it does here 

some weeks are roses 

some weeks are dogpoo

at the end of the year its pizzas

thats what counts i reckon , in front at the end 

i have a supplementry income that i live off, trading pays for all the other stuff

i am not a daytrader unless something jumps down my throat as a definate probability 


more of a position trader here and that suits me and my lifestyle just fine


----------



## Aussiest

*Re: Do you have to daytrade to trade fulltime?*



ThingyMajiggy said:


> then I can have the week off if I wanted....




In theory, it's a good idea. In practice, it's not a good idea to assume you can make a weeks wage and then take a week off. If you get stopped out, you'd need extra funds to compensate for the losses. Also, we sometimes have stagnant weeks, depending on which market you trade, so during those weeks you would be without a wage. That's why you need to let your winners run. Only problem is, once you see a small profit, any profit, it's tempting to take


----------



## Trembling Hand

*Re: Do you have to daytrade to trade fulltime?*

Sam

Gee mate that's a dangerous assumption. 

In a previous life I helped people set up small business. A universal indicator of failure was, 







> I'm not on much per week working my normal job, so I figure if I can get good enough, and just at least match my regular job.




My response was that 99% of people don't get half way to their goals. If you are planing is at that level how is your life going to be on 50% of that??


----------



## ThingyMajiggy

*Re: Do you have to daytrade to trade fulltime?*



Aussiest said:


> In theory, it's a good idea. In practice, it's not a good idea to assume you can make a weeks wage and then take a week off. If you get stopped out, you'd need extra funds to compensate for the losses. Also, we sometimes have stagnant weeks, depending on which market you trade, so during those weeks you would be without a wage. That's why you need to let your winners run. Only problem is, once you see a small profit, any profit, it's tempting to take




I know, agree 100%. 
Not saying I would have the week off, not saying I'm going to quit my normal job, as I am lucky enough to be able to do both. Just saying the potential is there.


----------



## marcadrian

*Re: Do you have to daytrade to trade fulltime?*

I would say i would be comfortable at no mortgage + 100k of passive income being split between two adults through a discretionary trust. Thats about 80k of post-tax income, or $1500 a week for a family of four. I live in Sydney.

As for the "large capital base"... how big is enough? Would you call 300k a large enough capital base? What about 600k? I want to spend 2-3 hours a day and make 20-50% pa returns.


----------



## ThingyMajiggy

*Re: Do you have to daytrade to trade fulltime?*



Trembling Hand said:


> Sam
> 
> Gee mate that's a dangerous assumption.
> 
> In a previous life I helped people set up small business. A universal indicator of failure was,
> 
> My response was that 99% of people don't get half way to their goals. If you are planing is at that level how is your life going to be on 50% of that??





I'm not assuming anything? If I am lucky enough to catch a decent trade at the beginning of the week, why can't I stop for the rest of the week? 

I don't know why people are attacking me for it, I know I can have losses and WILL have losses, down weeks, up weeks. I'm not saying I'm going to rush out and ASSUME that I can just have a great trade every monday and she'll be right. Course not. 

Still have my normal job and will keep my normal job, taking it real easy as far as trading goes, I don't see the problem.


----------



## awg

*Re: Do you have to daytrade to trade fulltime?*



nunthewiser said:


> i see no ones mentioned the weeks that go by when one takes loss after loss yet ........
> 
> but hey i dont spose that happens to all the succesful traders here hey ?
> 
> i know it does here
> 
> some weeks are roses
> 
> some weeks are dogpoo
> 
> at the end of the year its pizzas
> 
> thats what counts i reckon , in front at the end
> 
> i have a supplementry income that i live off, trading pays for all the other stuff
> 
> i am not a daytrader unless something jumps down my throat as a definate probability
> 
> 
> more of a position trader here and that suits me and my lifestyle just fine





Hi Nun,

you beat me to it.

when the market goes down, its very hard to make dosh, unless you are very experienced/clever/lucky, as short side trading isnt something that comes naturally to everyone.

I got stopped out on 11 trades in a row once, took a while to bounce back from that, I can say it was as bad as any period I ever had at work!

like you I do the occasional day trade.

I have a reasonable capital base, and approx 25% of our family income is drawn down from it, I endeavour to maintain that base including inflation.

I have noticed that without the occasional outlier rising up to 50-100%, I would not be able to meet my aims


----------



## bonkerrs

*Re: Do you have to daytrade to trade fulltime?*



ThingyMajiggy said:


> I'm not assuming anything? If I am lucky enough to catch a decent trade at the beginning of the week, why can't I stop for the rest of the week?



 Not attacking you. In fact, I used to think the same way. But what about next time? By having a rest for the rest of the week you may miss other opportunities, other opps that may go towards the bigger picture, for when you have a string of losses.


----------



## prawn_86

*Re: Do you have to daytrade to trade fulltime?*



marcadrian said:


> I want to spend 2-3 hours a day and make 20-50% pa returns.




You do realise that there are hundreds (if not thousands) of fund managers (and private investors) out there who do this 40+ hours a week and cannot even get these sort of returns?

I think you are deluding yourself.


----------



## ThingyMajiggy

*Re: Do you have to daytrade to trade fulltime?*



bonkerrs said:


> Not attacking you. In fact, I used to think the same way. But what about next time? By having a rest for the rest of the week you may miss other opportunities, other opps that may go towards the bigger picture, for when you have a string of losses.




Ok then, forget I said it. 

Obviously if you take 1 trade at the beginning of the week, then have the week off, you are going to miss the other opportunities. 100% agree. 

I'm not personally going to have the week off, as I said, I like watching the markets too much to just drop it for the rest of the week. 

I was just merely stating that if one did have a good trade there is no reason why he/she can't stop if they wanted to. 

Knew there was a reason I only had 100 odd posts since 2007. 

Carry on.


----------



## marcadrian

*Re: Do you have to daytrade to trade fulltime?*



prawn_86 said:


> You do realise that there are hundreds (if not thousands) of fund managers (and private investors) out there who do this 40+ hours a week and cannot even get these sort of returns?
> 
> I think you are deluding yourself.




Ha.. you mean all those clever fund managers that were buying Allco and B&B all the way down to the bottom?

http://blog.sharefinder.com.au/index.php/2009/02/04/taking-responsibility-for-your-investmen


----------



## nunthewiser

*Re: Do you have to daytrade to trade fulltime?*



ThingyMajiggy said:


> Knew there was a reason I only had 100 odd posts since 2007.
> 
> Carry on.






LOL dont be so sensitive 

welcome to the sandpit


----------



## kam75

*Re: Do you have to daytrade to trade fulltime?*



nomore4s said:


> Obviously the answer is no but I would like to know is it harder to pull a fulltime income from the markets without daytrading? And if it is harder, how much harder? Are capital requirements any higher?
> 
> I eventually want to use trading as my primary source of income but I don't really want to daytrade to do it as I find it quite stressful and tbh don't really enjoy daytrading, so I might as well keep doing what I'm doing if it came to a choice.
> 
> Thoughts?




I've been pulling a fulltime income from the market since 2002.  All my analyses is done end of day and I never watch the market.  But everyone is different.  I think for most people, day trading will be the toughest type of trading because they will lack the discipline and ability to make decisions in an instant.


----------



## ajjack

*Re: Do you have to daytrade to trade fulltime?*

Hey kam your method sounds like Nic Darvas from the 50s.

How can you not watch the market, even when posting on ASF?

If your anayses are done end of day, arent they out of date
when placing your trade next day?

Sounds interesting, tell us more


----------



## waz

*Re: Do you have to daytrade to trade fulltime?*

My end goal is to be a full time day trader. I much prefer to be my own boss and its something I truely enjoy doing.
However before I can do this, I need enough capital to invest.

For the first 4 months this year, daytrading was my only source of income. (I was making upto 60 trades per day, mostly scalping and looking for pairs opportunities).
I came up with the below pros and cons from my experience:

PRO:
# You are your own boss
# You decided how hard and how long you work, (I could have easily just traded the aussie200 from 4pm to 4:30 and made a living off that)
# Its exciting
# You can work from home
# You can work from anywhere in the world
# You dont have to waste 10 hours a week travelling to and from work, (saving time and money).
# You learn a lot
# Its an interesting way to make a living
# Beneficial tax situation
# Uncapped earnings potential

CONS:
# You need a lot of capital to invest in the first place
# Its scarry and wreaks havoc on your emotional state
# You pretty much need to work and be in contact with your computer from 8am monday morn till 8am sat morn non stop. This was the worst part, I was struggling to sleep, staying awake for the first 30 mins of the US market, going to sleep for a few hours then waking for the last 30mins of the US market.
# You screwed if your internet connection goes down
# If you dont have enough capital you may get into cash flow problems, when your money is held in a trade which you dont want to exit just yet.
# People just assume your really unemployed and your gambling your money
# You can turn into a bit of a social recluse (your friends are people on forums that you have never met).
# Getting a loan is impossible


That being said, I still want to be a full time trader, at the moment I work in the IT industry as a contractor which gives me regular weekly income.
I will continue doing this for at least 3 years and trade part time, once I have enough capital, Im guessing I will need about 200k. 100k for weekly expenses for a year and backup funds, and 100k to trade with. Ive found the more money you have the less likely you are to take risky trades.


----------



## nomore4s

*Re: Do you have to daytrade to trade fulltime?*



ThingyMajiggy said:


> Personally, I want to day trade for a living. I'm not on much per week working my normal job, so I figure if I can get good enough, and just at least match my regular job, that is enough for me, then build from there.




I agree with TH here. If your sole aim is to make enough money to match your wage or even to only slightly increase it you will find it difficult to succeed and imo you are better off working for wages. You would only need 1 bad month and you could be in trouble, let alone trying to grow your capital.

If coming off a fairly low wage base say 35-50k pa I think you would have to be able to earn at least 3x that amount trading to make it a worthwhile and having the capital to do this and be able to cover a few bad months is a problem for most. Running any sort of business (trading included) has a lot of hidden costs and problems.


----------



## marcadrian

*Re: Do you have to daytrade to trade fulltime?*

waz, with 100k, what are you expecting to make per year?


----------



## prawn_86

*Re: Do you have to daytrade to trade fulltime?*



marcadrian said:


> Ha.. you mean all those clever fund managers that were buying Allco and B&B all the way down to the bottom?
> 
> http://blog.sharefinder.com.au/index.php/2009/02/04/taking-responsibility-for-your-investmen




If you can make 20% pa year in year out that would put you in the league of buffett, soros etc. Doing it with 2 - 3 hours per week would make you infinitely beter than them. Think about it...

Admittedly there are a lot of fund managers that dont perform well, but there are others that do.

You are essentuially saying you want to match it with the best of the best, but only commit a couple hours a week. Please let me know if you ever manage to do this


----------



## ThingyMajiggy

*Re: Do you have to daytrade to trade fulltime?*



nomore4s said:


> I agree with TH here. If your sole aim is to make enough money to match your wage or even to only slightly increase it you will find it difficult to succeed and imo you are better off working for wages. You would only need 1 bad month and you could be in trouble, let alone trying to grow your capital.
> 
> If coming off a fairly low wage base say 35-50k pa I think you would have to be able to earn at least 3x that amount trading to make it a worthwhile and having the capital to do this and be able to cover a few bad months is a problem for most. Running any sort of business (trading included) has a lot of hidden costs and problems.





Thats great, but its not my sole aim. My sole aim is to trade well, which in turn will bring profits, isn't that what everyones "sole aim" is? 

I'm still working my normal job, and not quitting anytime soon to jump into trading for a living, its one of those things...what are they called again...oh yeah, goals. no one who begins trading is instantly going to make their weekly wage. I see nothing wrong in having a few goals, to try and reach consistent trading.


----------



## Timmy

*Re: Do you have to daytrade to trade fulltime?*



waz said:


> # I could have easily just traded the aussie200 from 4pm to 4:30 and made a living off that




That sounds like what you wanted to achieve?
Can you say why you stopped doing this (market changed, volatility reduced, bored, something else)?

4s, sorry to go off topic.


----------



## nomore4s

*Re: Do you have to daytrade to trade fulltime?*



waz said:


> My end goal is to be a full time day trader.




That's nice Waz but the question was:



> Do you have to daytrade to trade fulltime?


----------



## waz

*Re: Do you have to daytrade to trade fulltime?*

My decision to trade full time is a lifestyle decision, my goal is to live an enjoyable life, not to earn a certain amount of money.

If Im living in some cheap country and all I need to survive is 30k, then that might be my goal for the year. (which I may be able to achieve in 3-4 months)

If I did have 100k, I know I could easily loose half of it in a year, or at best tripple it in a year. 

PS. I wouldn't be trading direct shares, Im more into index, currency, commodity trading on margin.

I also don't get that question 'Do you have to daytrade to trade full time?'
You would have to define daytrade and full time first.

If daytrade = short term trading
and full time = 40 hours a week and or you only source of income

Then my answer is 'no'

There is nothing stopping you making just one trade a year and calling that your only souce of income which you spent 40 hours a week for 52 weeks researching.

In answer to Timmy's question:
I was usually only making about -$50 to $200 per day in that half hour window.
Hardly enough to make a living from, I went back to full time work as it was just too risky, this being done on margin.


----------



## Julia

*Re: Do you have to daytrade to trade fulltime?*



Aussiest said:


> Aww Julia, that's awesome! My problem is i don't hold for long enough.
> 
> Julia, how do you get the patience to wait for those larger moves? Do you have a hobby that you indulge in?



I don't sit there and watch it, Aussiest!   
Often time it badly, and give back some profit.



nunthewiser said:


> i see no ones mentioned the weeks that go by when one takes loss after loss yet ........



Exactly right.   I was well in the red up until the rally this week.

I think how easy it is or isn't depends a fair bit on one's capital base.
Much harder to generate a living on multiple small moves, well for me anyway.


----------



## nunthewiser

*Re: Do you have to daytrade to trade fulltime?*



ThingyMajiggy said:


> Thats great, but its not my sole aim. My sole aim is to trade well, which in turn will bring profits, isn't that what everyones "sole aim" is?
> 
> I'm still working my normal job, and not quitting anytime soon to jump into trading for a living, its one of those things...what are they called again...oh yeah, goals. no one who begins trading is instantly going to make their weekly wage. I see nothing wrong in having a few goals, to try and reach consistent trading.




and personally thinks well done for not jumping into a pit which spits out and chews up so many bright eyed wannabe zillionaires 

nothing wrong with treading carefully and if more did it perhaps we would see more ACTUAL succesful traders not just internet champs


----------



## marcadrian

*Re: Do you have to daytrade to trade fulltime?*



prawn_86 said:


> If you can make 20% pa year in year out that would put you in the league of buffett, soros etc. Doing it with 2 - 3 hours per week would make you infinitely beter than them. Think about it...
> 
> Admittedly there are a lot of fund managers that dont perform well, but there are others that do.
> 
> You are essentuially saying you want to match it with the best of the best, but only commit a couple hours a week. Please let me know if you ever manage to do this





Hold up son, I said 2-3 hours a DAY.

Are you telling me there is no one on this forum making 20% pa returns? Surely anyone trading through 2003-2007 with a decent ASX system should have far surpassed that. Even doubling up on the index would have smashed that during those years!


----------



## nomore4s

*Re: Do you have to daytrade to trade fulltime?*



ThingyMajiggy said:


> Thats great, but its not my sole aim. My sole aim is to trade well, which in turn will bring profits, isn't that what everyones "sole aim" is?
> 
> I'm still working my normal job, and not quitting anytime soon to jump into trading for a living, its one of those things...what are they called again...oh yeah, goals. no one who begins trading is instantly going to make their weekly wage. I see nothing wrong in having a few goals, to try and reach consistent trading.




lol Sam relax. I'm not saying you're going to do anything or that you shouldn't have your goals for trading, all I'm saying is you might need to shift the goal posts a bit, earning what you're earning now might not be enough if you are trading fulltime.

There are other things to think about - Holidays (no income while on holidays), getting sick/injured and not being able to trade, a bad couple of weeks/months with negative returns, having money put aside for tax, trying to grow capital, general business expenses etc, etc.


----------



## ThingyMajiggy

*Re: Do you have to daytrade to trade fulltime?*



nomore4s said:


> lol Sam relax. I'm not saying you're going to do anything or that you shouldn't have your goals for trading, all I'm saying is you might need to shift the goal posts a bit, earning what you're earning now might not be enough if you are trading fulltime.
> 
> There are other things to think about - Holidays (no income while on holidays), getting sick/injured and not being able to trade, a bad couple of weeks/months with negative returns, having money put aside for tax, trying to grow capital, general business expenses etc, etc.




Yeah, I am relaxed, you guys are quoting me and saying these things making it sound like these are my intentions. Then saying I am making the assumptions? 

I 100% agree that earning what I earn now, might not be enough in trading full time, but that as a goal NOW, whilst still working my regular job, is a reasonable goal I think, and as I said in my original post, I can move on from there, my "sole aim" is trading well, with consistency. 

Anyway, enough of me, back on topic.


----------



## nomore4s

*Re: Do you have to daytrade to trade fulltime?*



waz said:


> I also don't get that question 'Do you have to daytrade to trade full time?'
> You would have to define daytrade and full time first.




lol, fair enough.

By daytrade I mean short term trading, not holding overnight etc etc - standard definition of daytrading I would have thought.

Fulltime is probably more open. To be able to draw a decent income - sole means of employment(ie not working for someone) but doesn't have to be sole means of income. Decent income is obviously going to vary a bit from person to person.


----------



## The_Bman

*Re: Do you have to daytrade to trade fulltime?*

I didn't believe you need to be a day trader to trade full time i.e. derive an income primarily from trading. 

However, I'm now assuming to derive the income you need to manage many trades for short term returns or have many positions for long term growth and cash them in like term deposits. 
The question I have for those who have (or say you need) a lot of capital is how would you apply it to derive the income?

Seems to me by its nature, if you need to pull ~$10K a month out you need to spend a lot of time at the screen.

*Admits have done no research into either day trading or trading strategies with large wads of cash *


----------



## bonkerrs

*Re: Do you have to daytrade to trade fulltime?*



nomore4s said:


> By daytrade I mean short term trading, not holding overnight etc etc - standard definition of daytrading I would have thought.




Not holding overnight. Isn't that called Intra-day trading 



waz said:


> # You can turn into a bit of a social recluse (your friends are people on forums that you have never met).



 Friends that are not on the internet! Man, that's sooo 80's!


----------



## prawn_86

*Re: Do you have to daytrade to trade fulltime?*



marcadrian said:


> Hold up son, I said 2-3 hours a DAY.




My bad, would help if i could read 

Obviously it is possible, but to do it consistently is the question.


----------



## waz

*Re: Do you have to daytrade to trade fulltime?*

The reason why I need to a lot of capital to make enough to earn a living, is that most of my trading is derived from scalping/arbitrage.

When you are scalping you are only going to make a very small percentage gain. Half my trades are within 0 to 1% and the rest Id be happy for up to 3%.

So If I only had 10k and made 5% for the week with approx 200 trades, thats only a profit of $500. Hardly enough to quit my full time job and rely on it as my sole income. What if I dont make any money at all that week, or loose 500. Im screwed.

Whereas If I had 100k, with the same 200 trades earning 5% for the week, I would have made 5k. Now I can comfortably quit my full time job. At the same time I could also loose 5k, but with 95k still left over, I wouldnt need to keep my eye on seek.com.au just in case.


----------



## The_Bman

*Re: Do you have to daytrade to trade fulltime?*

Exactly, to derive your income you're trading a lot and most likely everyday.

And assuming the average person would need ~$13K Gross per month for a medium family with mortgage etc you would need ~$800K trading capital on the assumption you can return 20% (Twice All Ords)

So coming back to Nomore's question, what would the capital and trading routine for someone living off trading.

There would have to be a number of constraints:
- Ensure alternative income is available
- Save for the bear
- Minimise debt (no mortgages etc)
- Minimise emotional risk (e.g. family stable, no large expenses other rely on e.g. education etc)


----------



## Mr J

*Re: Do you have to daytrade to trade fulltime?*

The less often you trade, the more capital you will need. Daytraders can making a living with a smaller capital base than swing traders, and a much, much smaller base than longer term traders.



prawn_86 said:


> You do realise that there are hundreds (if not thousands) of fund managers (and private investors) out there who do this 40+ hours a week and cannot even get these sort of returns?
> 
> I think you are deluding yourself.




This is a really silly statement. A manager of a decently sized fund plays a completely different game to a small retail trader. I could achieve far better than that with less time, but give me 50 mil and my return will take a dive. Apples to oranges. There's also the fact that many fund managers aren't skilled, or handle amounts too large for their skill.



Trembling Hand said:


> I would ask the question who actually makes a fulltime living out of trading. Very hard gig on a small capital base. You have to realise that every week you pay yourself is a drag on performance.




What's your point? To suggest that it's hard to make a career out of 10-20k? Sure. 50k? I consider that very adequate. 10-20k can  get it done if we don't have to worry about paying bills (i.e. you have plenty saved for expenses, partner paying bills etc).



The_Bman said:


> Seems to me by its nature, if you need to pull ~$10K a month out you need to spend a lot of time at the screen.




Depends on capital and trading ability. Some people may need to work 60 hours a week to make that much, others may only need to work few hours. It varies significantly even with the same amount of capital.

As for myself, I don't daytrade for a living fulltime, I just daytrade fulltime. I want to make a living, but I need more success before I'm comfortable making that claim.


----------



## marcadrian

*Re: Do you have to daytrade to trade fulltime?*

Yes, it needs to be remembered that large fund managers can't often just "go to cash" when the bad times roll. If you are managing 500m in funds, you can't just pack up bags and tell your investors you are sticking it all into the safest investment possible. They are expecting that you will find the best shares that are outperforming the market, even if the market is tanking by 50%. Point in case being most equity based funds over the last 2 years.

Being small enough to have the flexibility of applying a simple on/off valve for certain trading systems puts us way ahead.


----------



## Temjin

*Re: Do you have to daytrade to trade fulltime?*



waz said:


> The reason why I need to a lot of capital to make enough to earn a living, is that most of my trading is derived from scalping/arbitrage.
> 
> When you are scalping you are only going to make a very small percentage gain. Half my trades are within 0 to 1% and the rest Id be happy for up to 3%.
> 
> So If I only had 10k and *made 5% for the week* with approx 200 trades, thats only a profit of $500. Hardly enough to quit my full time job and rely on it as my sole income. What if I dont make any money at all that week, or loose 500. Im screwed.
> 
> Whereas If I had 100k, with the same 200 trades earning 5% for the week, I would have made 5k. Now I can comfortably quit my full time job. At the same time I could also loose 5k, but with 95k still left over, I wouldnt need to keep my eye on seek.com.au just in case.




Do you even realize that if you could achieve that kind of phenomenon return consistently over many years, you will be regarded as ABOVE the legendary?

Going back to Tech/A's previous thread on wealth accumulation idea, try using the compounding equation on that kind of return and reinvest all profit. Do this for 5 years and look at the numbers. 

If you feel you have the confident to do this, you need to think OUTSIDE the square. Compound your profits and use the accumulated capital to be financially free. 

I see too many people who want to quit their job and trade full time and hope that their $50k capital will make their dream come true. They want instant gratification and never take full advantage of compounding. 

Ok, I know you were making up the figures (5% per week), but you get the drill.  I hope.


----------



## tech/a

*Re: Do you have to daytrade to trade fulltime?*



> What's your point? To suggest that it's hard to make a career out of 10-20k? Sure. 50k? I consider that very adequate. 10-20k can get it done if we don't have to worry about paying bills (i.e. you have plenty saved for expenses, partner paying bills etc).




$500 to Joe if you can show 12 mths trading statement returning an income of $50K + ---any less and thats hardly a career.(Not a one off win but some sort of consistancy.)
Near impossible in my view,I'm sure I'm not the only one who would like to see a 20-50k capital base returning a career!


----------



## waz

*Re: Do you have to daytrade to trade fulltime?*

hehe

excactly temjin, I can't, nor can anyone else make consistant postive returns.
Which is why I went back to full time work. i.e a regular job.

Also depending on your trade strategy, you may not be able to use it everyday.
You may spend the entire week on research, 40 hours, but only place 2 trades, making a grand total profit of $50. Then the next week make $1,000. Then the next week only make $50 again.

IN short, in oder for me to do it full time, I would need to save up enough to cover my cost of living, anything extra I can use to trade, and profits can then be used to better my living standard.

No one said that in order to be a full time trader you have to be 'succesful' and beat the market.
You could happily make 5% for the year and still be happy.
You only need to make as much as you require to spend.
And if your requirement is only to spend 5% of your capital per year, why not just put the money in a bank account and live of the interest. You can spend 40 hours a week researching term deposits and future interest rate movements.

Another thing to keep in mind in this discusson is income vs assets.
One daytrader may have 1mil in assets and wants to make 10k a year in income.
Another day trader may have 50k in assets (all their investment capital) and want to make 100k a year in income.
They both spend 40 hours a week to achieve that outcome.

Different goals, same profession.


----------



## Mr J

*Re: Do you have to daytrade to trade fulltime?*

I agree that 10-20k could be a struggle if one has to pay the bills, but 50k is a walk in the park. You're willing to bet that I can't take $50k and finish with >$100k after 12 months? I don't have 50k, but I'd be interested in a 10k->50k challenge. You wouldn't be able to offer odds that interest me though, as I feel that money would be better spent on trading than sitting in escrow. Nevermind, we'll likely have this discussion in 6-12 months .


----------



## tech/a

*Re: Do you have to daytrade to trade fulltime?*



> but 50k is a walk in the park.




How do you know that?
Or should that read---I think with $50k it would be a walk in the park.
OR
200% return on $50k should be a walk in the park.

My veiw is $50k to $100K or 200% in this market is very rare!


----------



## nunthewiser

*Re: Do you have to daytrade to trade fulltime?*

hmmmmmmm so let me get this right 

50 k to 100k within a year is a walk in the park ?

but you havent actually done it yet ?

please enlighten me here as the way i see it , is that you havent actually done it but reckon its easy to do 

if it was easy , why havent you done it yet ?


----------



## Mr J

*Re: Do you have to daytrade to trade fulltime?*



tech/a said:


> How do you know that?
> Or should that read---I think with $50k it would be a walk in the park.
> OR
> 200% return on $50k should be a walk in the park.
> 
> My veiw is $50k to $100K or 200% in this market is very rare!




Both, but only for a decent short-term trader with modest expenses. I say both, because if a trader can't double $50k they're probably going to struggle, unless their strategy scales decently and they can attract more capital.

In "this market"? Are we talking weeks, months or years here? My experience is limited to this rally. A 200% return is very nice, but I do believe it's very achievable for a short-term trader. I know people will disagree about it being a walk in the park, but I find trading to be no different than driving.

Nun: I have not traded for a year, and I started with far less than $50k. I'm well aware that I don't have much credibility until I can back up these comments with results. Take my statements with a grain of salt, or see some sense in them if you wish.


----------



## tech/a

*Re: Do you have to daytrade to trade fulltime?*



> if it was easy , why havent you done it yet ?




Because



> I agree that 10-20k could be a struggle if one has to pay the bills, but 50k is a walk in the park. You're willing to bet that I can't take $50k and finish with >$100k after 12 months? *I don't have 50k,* but I'd be interested in a 10k->50k challenge. You wouldn't be able to offer odds that interest me though, as I feel that money would be better spent on trading than sitting in escrow. Nevermind, we'll likely have this discussion in 6-12 months .


----------



## nunthewiser

*Re: Do you have to daytrade to trade fulltime?*



tech/a said:


> Because




ok i see 10k to 50k there 

if it was so easy why hasnt he done it yet ?

the way i see it is all wishful thinking until reality sets in personally


----------



## nunthewiser

*Re: Do you have to daytrade to trade fulltime?*

no offence intended of course


----------



## nunthewiser

*Re: Do you have to daytrade to trade fulltime?*



Mr J said:


> Nun: I have not traded for a year, and I started with far less than $50k. I'm well aware that I don't have much credibility until I can back up these comments with results. Take my statements with a grain of salt, or see some sense in them if you wish.




i missed that bit b4


----------



## Mr J

*Re: Do you have to daytrade to trade fulltime?*

I'm not offended nun, your position is perfectly reasonable. I'm suggesting something can be done when I haven't achieved it myself. However, I'm not actually saying I can do it, just that I know it can be done. Do you doubt that? Would or agree or disagree that a good trader, with modest expenses, could start a career on 50k?



> the way i see it is all wishful thinking until reality sets in personally




No, I think that it is probable that I can achieve that or better. I am very confident I'm a +ev trader, and mathematically I don't need to perform very well to double a balance over a year. At 2%, a 200% return is achievable without compounding. So, say I make 5 trades a day, 25 a week, risking 1% per trade. I'd need an 8% edge to achieve my 2% per week. Sounds very reasonable to me.

I obviously can't prove that I've done this, but I'm quite prepared to try and show it going forward. The real question though is whether you're skeptical whether it can be done by a decent trader, or whether it can be done by me. My point isn't that I can do it (although I believe I can), but that a good trader can.



> i missed that bit b4




Because I added it after your first reply.


----------



## nulla nulla

*Re: Do you have to daytrade to trade fulltime?*

when you've done it , tell us how to do it. If you can do 10k to 50k in 12 months, then we should be able to do 100k to 500k following the same guidelines. Oddly enough the statistics indicate that the majority of day traders fail and ultimately give their money to the bigger traders, like nunthewiser . lol, be careful.


----------



## wayneL

*Re: Do you have to daytrade to trade fulltime?*

Here is something I've posted before. A little bit at a tangent, anyway  - FWIW

http://epchan.blogspot.com/2007/02/in-praise-of-day-trading.html



> Which brings me to day-trading. In the popular press, day-trading has been given a bad-name. Everyone seems to think that those people who sit in sordid offices buying and selling stocks every minute and never holding over-night positions are no better than gamblers. And we all know how gamblers end up, right? Let me tell you a little secret: in my years working for hedge funds and prop-trading groups in investment banks, I have seen all kinds of trading strategies. *In 100% of the cases, traders who have achieved spectacularly high Sharpe ratio (like 6 or higher), with minimal drawdown, are day-traders.*


----------



## nunthewiser

*Re: Do you have to daytrade to trade fulltime?*



Mr J said:


> I'm not offended nun, your position is perfectly reasonable. I'm suggesting something can be done when I haven't achieved it myself. However, I'm not actually saying I can do it, just that I know it can be done. Do you doubt that? Would or agree or disagree that a good trader, with modest expenses, could start a career on 50k?
> 
> 
> 
> No, I think that it is probable that I can achieve that or better. I am very confident I'm a +ev trader, and mathematically I don't need to perform very well to double a balance over a year. At 2%, a 200% return is achievable without compounding. So, say I make 5 trades a day, 25 a week, risking 1% per trade. I'd need an 8% edge to achieve my 2% per week. Sounds very reasonable to me.
> 
> I obviously can't prove that I've done this, but I'm quite prepared to try and show it going forward. The real question though is whether you're skeptical whether it can be done by a decent trader, or whether it can be done by me. My point isn't that I can do it (although I believe I can), but that a good trader can.
> 
> 
> 
> Because I added it after your first reply.





fair enough and yes i believe and know it can be done 

good luck with it and hopefully see ya back in a year telling us how great you been 

cheers


----------



## nunthewiser

*Re: Do you have to daytrade to trade fulltime?*



nulla nulla said:


> when you've done it , tell us how to do it. If you can do 10k to 50k in 12 months, then we should be able to do 100k to 500k following the same guidelines. Oddly enough the statistics indicate that the majority of day traders fail and ultimately give their money to the bigger traders, like nunthewiser . lol, be careful.





im just a lil fish in a big pond nulla


----------



## Mr J

*Re: Do you have to daytrade to trade fulltime?*



nulla nulla said:


> when you've done it , tell us how to do it. If you can do 10k to 50k in 12 months, then we should be able to do 100k to 500k following the same guidelines. Oddly enough the statistics indicate that the majority of day traders fail and ultimately give their money to the bigger traders, like nunthewiser . lol, be careful.




My trading wouldn't scale that efficiently. 10k into 50k is quite different to 100k into 500k, which is why the common argument of whether "fund managers can't achieve it, so how can you?" is meaningless.

Yes, the majority of traders fail, and obviously I believe that I'm in the group that are destined to succeed. It wouldn't be wrong to assume I'm biased, but I think I'm as objective as someone could be about their own trading. I must point out that I'm not the typical beginner, as I have heavy exposure to similar activities. I already have the correct mindset, knowledge of risk management, mental and emotional control, so it just comes down to whether or not the trades themselves are +ev. I believe they are, so I give myself a high chance of success. I could be fooling myself though, so I can't deny that I may not be profitable now, or ever.



> good luck with it and hopefully see ya back in a year telling us how great you been




I imagine I'll have a couple thousand posts .


----------



## wayneL

*Re: Do you have to daytrade to trade fulltime?*

As far as claims, you lot are downright conservative.

Our South Australian ex-welder friend that has been discussed before claims you can make $5,000 A WEEK, with a $20,000 capital base, daytrading options FFS. 

Another spruiker doing the rounds of the blogs claims:



> All of you have different reasons for wanting to receive personalized instruction from me, but one thing is for certain: you would like to be successful in your own trading as I am in mine. With a track record like mine, this comes as no surprise:
> 
> 2002: +2.04 (quarter year)
> 2003: +5.05
> 2004: +37.42%
> 2005: +88.20%
> 2006: +103.67%
> 2007: +144.13%
> 2008: +256.11%
> 2009: +201.10% (As of July 8, goal: +300%)




Yet another option "guru" claims:



> When you don’t actually own a stock you can still buy the rights to that stock and then turn around and sell someone rights against your rights. Just like renting and sub-leasing. The spread, or difference in price, is your profit. That profit can vary but if you do it right you should be able to generate at least a 20% profit each month - yea that’s right, I said each MONTH.




Whadaya think of them apples?


----------



## So_Cynical

*Re: Do you have to daytrade to trade fulltime?*

Q: Do you have to daytrade to trade fulltime?

A: No

Going on how ive done over the last financial year (did my tax last night) a capital base of about 600K would give me about 1K a week...don't know how i would sleep though, and that's without leverage and just going long on stocks, part time.


----------



## Mr J

*Re: Do you have to daytrade to trade fulltime?*

Wayne, I posted a chart in the SPI thread showing a nice 100 tick move downwards with 9 or so entries. It could have seen capital grow 50% in one day with responsible pyramiding. I do believe my numbers here are actually conservative. As to your friend, he may be high as a kite, but I wouldn't know!

Regarding possible returns, I think TH's Nothing to Something thread confirms that seemingly unbelievable returns are possible with great skill. That should be enough to confirm that seemingly great returns are possible with decent skill.


----------



## wayneL

*Re: Do you have to daytrade to trade fulltime?*



Mr J said:


> Wayne, I posted a chart in the SPI thread showing a nice 100 tick move downwards with 9 or so entries. It could have seen capital grow 50% in one day with responsible pyramiding. I do believe my numbers here are actually conservative. As to your friend, he may be high as a kite, but I wouldn't know!
> 
> Regarding possible returns, I think TH's Nothing to Something thread confirms that seemingly unbelievable returns are possible with great skill. That should be enough to confirm that seemingly great returns are possible with decent skill.




J

All things are possible, some things aren't, some fooled by randomness.

I'm a great fan of day trading, hence the Ernie Chan quotation a few posts back. 

Here's my 2c. It's not prudent to view day trading results the same way as investment return, because it's a job, not investing. You need some capital, but not a hell of a lot to make a good wage, if you're good at it.

So is it possible to turn $10k into $50k in a year? Sure! It's possible. Many do it. But take out your tax and living expenses and you're back to 10k. 

#### that!

I don't day trade much any more because I don't want to concentrate that hard, but still do if I feel like it. But with a decent capital base you can do very well. There are some who are trading freaks like TH who can turn $1000 into anything they like.

It's possible, no question.


----------



## nomore4s

*Re: Do you have to daytrade to trade fulltime?*



wayneL said:


> Whadaya think of them apples?




Maybe I should forget about trading and just start selling options courses, lol.


----------



## Nick Radge

*Re: Do you have to daytrade to trade fulltime?*

Wayne makes some very good points. I mean, what exactly is trading for a living? Is it sitting in front of a screen for 8 hours watching numbers tick over? There are now 11 guys here in Noosa from the SFE floor now, several of which are arguably Australia's largest traders. Some of these guys pay more a month in comm's than most people would like to make in profits in a year. However, they sit in front of the computer for 12-hours punching in orders. I don't quite get the 'lifestyle' choice there? When I play golf with them they spend 1/2 the time on the phone and not playing. 

I appreciate the original question is on day trading for a living, but just wondering where the living is? As someone else said, you will get over watching a screen all day. Its like working on the SFE floor; 7 hours of boredom interrupted by 30 mins of action.

Take a 20% return - not hard in my opinion over the longer term - and compound that for 20-years. A 30-year old can retire at 50 without issue. I think this is where most lack insight, taking the longer term view. Yes, trend following is boring. Sometimes its a grind. You spend more time below equity highs than above but for stress and lifestyle its hard to beat. Just remember that many of the interviewee's in Market Wizards were trend followers. $1000 invested with John Henry in 1985 is now worth $136,656. A $1000 invested with Buffett is worth $22,000.


----------



## Mr J

*Re: Do you have to daytrade to trade fulltime?*



> It's not prudent to view day trading results the same way as investment return, because it's a job, not investing.




I believe it's both. Investment of resources into the occupation of trading. Regardless, it's something I'm familiar with as I've been this type of thing for years. Card counting, poker, sportsbetting, trading - it's all the same to me. All about making +ev wagers day in, day out.



> So is it possible to turn $10k into $50k in a year? Sure! It's possible. Many do it. But take out your tax and living expenses and you're back to 10k.




Expenses were intentionally left out, as it was to prove a point for trading performance. I agreed earlier with TH that starting with 10-20k would be struggle, but it is possible. Requirements for starting capital will vary significantly on the trader's personal situation (expenses, partner, how long until trading profitably etc). If someone has a partner that can support them or living expenses saved in advance, it's possible to hold onto most of that profit. It may be a struggle for a couple of years, but it's still doable. If one has turned 10k into 50k, there's probably also a good possibility of finding an investor.

I'm not suggesting anyone start with 10k, but it's not impossible. 50k I would consider as a very comfortable start, at least for me.


----------



## wayneL

*Re: Do you have to daytrade to trade fulltime?*



Nick Radge said:


> Wayne makes some very good points. I mean, what exactly is trading for a living? Is it sitting in front of a screen for 8 hours watching numbers tick over? There are now 11 guys here in Noosa from the SFE floor now, several of which are arguably Australia's largest traders. Some of these guys pay more a month in comm's than most people would like to make in profits in a year. However, they sit in front of the computer for 12-hours punching in orders. I don't quite get the 'lifestyle' choice there? When I play golf with them they spend 1/2 the time on the phone and not playing.
> 
> I appreciate the original question is on day trading for a living, but just wondering where the living is? As someone else said, you will get over watching a screen all day. Its like working on the SFE floor; 7 hours of boredom interrupted by 30 mins of action.
> 
> Take a 20% return - not hard in my opinion over the longer term - and compound that for 20-years. A 30-year old can retire at 50 without issue. I think this is where most lack insight, taking the longer term view. Yes, trend following is boring. Sometimes its a grind. You spend more time below equity highs than above but for stress and lifestyle its hard to beat. Just remember that many of the interviewee's in Market Wizards were trend followers. $1000 invested with John Henry in 1985 is now worth $136,656. A $1000 invested with Buffett is worth $22,000.




But Nick,

I just received an email saying "How to Retire in One Year with Only $10,000".


----------



## wayneL

*Re: Do you have to daytrade to trade fulltime?*



wayneL said:


> But Nick,
> 
> I just received an email saying "How to Retire in One Year with Only $10,000".




I couldn't resist it. Yep I sent away for the "special report" to see what they were spruiking.

CREDIT SPREADS! LOL

The standard BS as detailed below, 90% probabiltiy with 20% profit every month.

Un-####ing-believable.


----------



## Pager

*Re: Do you have to daytrade to trade fulltime?*

What i do know is you don't have to sit in front of a screen all day unless you want too : maybe you can make abit or substantially more but each to there own on that one. 

I have and up until i did always wanted too but believe me it does your head in 

I only really trade futures and close trades end of day or hold for no longer than 2 days maximum, think the most important aspects to trading like this is risking a very low % of your account on any trade and being very disciplined in placing orders no matter what is happening in the world, this week Ive made most of my money on the short side even though the markets have been in a very bullish mood. 


The past 3 years Ive made more from trading than Ive earned from working, i still work however but feel lucky i can pick and choose when and how much work i do, TBH i actually like going to work but it is nice be able to say when and how much work i do, usually 20 to 30 hours a week.

Think its utter BS that you need to be in constant contact with the markets to make money, you don't, i place an entry, an exit and a stop with a broker and I'm happy to pay a bit more than the Internet brokers for piece of mind all my instructions are carried out, so as far as i can see everything is covered, Ive also only just checked what happened today on my account, if you start watching the market Ive found it becomes like a magnet and you can sit there watching all day, but it doesnt help if your trades are going the wrong way .


----------



## Trembling Hand

*Re: Do you have to daytrade to trade fulltime?*



Nick Radge said:


> I don't quite get the 'lifestyle' choice there? When I play golf with them they spend 1/2 the time on the phone and not playing.




Yep Nick I sit in front of the screen @ 11:30 (HSI, not trading SPI except Close) and don't move until 4:30- 6:00. I put a vid recorded on myself the other day just to see what the hell I did during this time and was very surprised to see how focused and little I moved. Other than running to get a coffee and kick the dog.

BUT,

I wake up each day and make that choice. When I wake up and decided not to do it I don't. Last fin year I didn't trade for 3 1/2 months thats something a trend trader cannot do. I also sleep very well at night. 

each method has there + & -.


----------



## MRC & Co

*Re: Do you have to daytrade to trade fulltime?*



Trembling Hand said:


> Nick thats shocking news!!




Haven't read the rest of the thread, but that is shocking news!

Out of interest, he didn't trade the SPI did he by any chance?


----------



## Nick Radge

*Re: Do you have to daytrade to trade fulltime?*



> I just received an email saying "How to Retire in One Year with Only $10,000"




Can you send it to me? 



> Out of interest, he didn't trade the SPI did he by any chance?



Yes, and FX.


----------



## Frank D

*Re: Do you have to daytrade to trade fulltime?*



Nick Radge said:


> Take a 20% return - not hard in my opinion over the longer term - and compound that for 20-years. A 30-year old can retire at 50 without issue. I think this is where most lack insight, taking the longer term view.




I made that exact point regarding 'compounding' in another thread 
'creating wealth, and an inexperience trader dismissed it because it 
was too ‘long term’

There are 10-15% moves in each Quarter trading on the ‘buy’ side, even
 in down trends

So the opportunity to make more than 20% per annum is there, and
 keep shifting a portion of any profits into long term holdings and
 accumulate.

In saying that, I make most of my dosh from day-trading, and I know 
when to switch on and off during the trading day, but I do work more than
 8 hours a day because I choose to trade other markets. I don't have to 
but I do.

*The best thing about 'day trading' are the weekends,  when I don't have to trade and look at a screen.*


----------



## nulla nulla

*Re: Do you have to daytrade to trade fulltime?*



nunthewiser said:


> im just a lil fish in a big pond nulla




Which makes me a minnow and some others white bait. The term "Day Trader", to me, does not imply opening and closing trades in one day, but trading for the day, day after day. Some trades run with the trend for weeks, others are closed out within minutes after taking a few dollars (on top of brokerages). A profit is a profit. And they all add up at the end of the year.


----------



## tech/a

*Re: Do you have to daytrade to trade fulltime?*

Couple of things from this.

These top 3 traders with Comms as large as an excellent profit.
They then trade short term and very often.
Dont have a life spend it on the phone---pretty intense--why does it need to be that intense.

So I keep wondering if they are making squillions --- how many squillions do they need.
With people dropping like flies (Friends of my own in their 50s).
2-3 Million why do you need $50 million?
Are they good traders or great gamblers?
Are they really "That Smart"? or "That Stupid"---cost one his life!--I'm sure many many more.
Do they really understand RISK mitigation?--or care?



> The best thing about 'day trading' are the weekends, when I don't have to trade and look at a screen.



What you mean if I'm longer term I have too?


----------



## Trembling Hand

*Re: Do you have to daytrade to trade fulltime?*

Guys I really don't get the criticism of trading fulltime because you have to "stare at a screen all day" 



As apposed to what?? 

Working the average job where you stare at a screen from 9 to 5. And have your income, hours, holidays, sick leave, over time, 'career' development, earning capacity, recognition, environment, colleagues, profit and life all controlled by someone else, mostly a tosser!


:bloated:


----------



## Sean K

*Re: Do you have to daytrade to trade fulltime?*



Trembling Hand said:


> Guys I really don't get the criticism of trading fulltime because you have to "stare at a screen all day"



I think it's the stare at the screen all day _by yourself_ which is the connotation. And, what's troubled me for the past couple of years. ASF is my 'work environment'.


----------



## mazzatelli1000

*Re: Do you have to daytrade to trade fulltime?*



Trembling Hand said:


> Working the average job where you stare at a screen from 9 to 5. And have your income, hours, holidays, sick leave, over time, 'career' development, earning capacity, recognition, environment, colleagues, profit and life all controlled by someone else, mostly a tosser!
> :bloated:




I second this.
Having your fate entirely in the hands of a tosser maddens me. Being a wage slave is not liberating at all, despite the "security" people seem to derive from it.


----------



## Timmy

*Re: Do you have to daytrade to trade fulltime?*



Trembling Hand said:


> Guys I really don't get the criticism of trading fulltime because you have to "stare at a screen all day"
> 
> 
> 
> As apposed to what??
> 
> Working the average job where you stare at a screen from 9 to 5. And have your income, hours, holidays, sick leave, over time, 'career' development, earning capacity, recognition, environment, colleagues, profit and life all controlled by someone else, mostly a tosser!
> 
> 
> :bloated:






mazzatelli1000 said:


> I second this.
> Having your fate entirely in the hands of a tosser maddens me. Being a wage slave is not liberating at all, despite the "security" people seem to derive from it.




Bandwagon jumper here.  I third it.


----------



## tech/a

*Re: Do you have to daytrade to trade fulltime?*

Dont work for a tosser then.


----------



## awg

*Re: Do you have to daytrade to trade fulltime?*



Mr J said:


> I believe it's both. Investment of resources into the occupation of trading. Regardless, it's something I'm familiar with as I've been this type of thing for years. Card counting, poker, sportsbetting, trading - it's all the same to me. All about making +ev wagers day in, day out.
> 
> 
> 
> Expenses were intentionally left out, as it was to prove a point for trading performance. I agreed earlier with TH that starting with 10-20k would be struggle, but it is possible. Requirements for starting capital will vary significantly on the trader's personal situation (expenses, partner, how long until trading profitably etc). If someone has a partner that can support them or living expenses saved in advance, it's possible to hold onto most of that profit. It may be a struggle for a couple of years, but it's still doable. If one has turned 10k into 50k, there's probably also a good possibility of finding an investor.
> 
> I'm not suggesting anyone start with 10k, but it's not impossible. 50k I would consider as a very comfortable start, at least for me.






If you have absolute confidence you can do what u say, then undoubtedly, you should convince your parents (or someone else) to take a home equity loan of $50k at 5.5%, then use that as trading capital, returning +20%, everyone will be smiling


----------



## tech/a

*Re: Do you have to daytrade to trade fulltime?*

90% of Businesses fail in the First 3 yrs.
90% of traders just plain fail.
One of the main reasons for business failure is Undercapitalisation.

Found this on the net.

Those in *Black* I see displayed often by wannabe full time traders.
Those in* Blue *are in my opinion THE killers for most wannabes.

*1.Lack of direction.* Business owners often fail to establish clear goals and create plans to achieve those goals, especially before starting out, when they fail to develop a complete business plan before launching their company. 

*2.Impatience.* This occurs when business owners try to accomplish too much too soon, or expect to get results far faster than is truly possible. A good rule to remember is that everything costs twice as much and takes three times as long as expected. 

*3.Greed.* When entrepreneurs try to charge too much to make a lot of money in a short period of time, failure isn't far behind. 

*4.Taking action without thinking it through first.* An entrepreneur acts impetuously and makes costly mistakes that eventually cause the business to fail.

5.Poor cost control. An entrepreneur spends too much, especially in the early stages, and spends all their startup capital money before achieving profitability. 

6.Poor product quality. This makes it difficult to sell and difficult to get repeat business.

*Insufficient working capital.* An entrepreneur expects--and requires--immediate, positive cash flow that doesn't occur, leading to the failure of the business. 

*7.Bad or nonexistent budgeting.* An entrepreneur fails to develop written budgets for operations that include all possible expenses. 
*
8.Inadequate financial records.* An entrepreneur fails to set up a bookkeeping or accounting system from the beginning.

*9.Loss of momentum in the sales department.* This leads to a decline in cash flow and the eventual collapse of the enterprise.

*10.Failure to anticipate market trends.* An entrepreneur doesn't recognize changes in demand, customer preferences or the economic situation. 

*11.Lack of managerial ability or experience.* An entrepreneur doesn't know or understand the important skills it takes to run a business.

*12.Indecisiveness.* An entrepreneur is unable to make key decisions in the face of difficulties, or decisions are delayed or improperly made because of concern for the opinions or feelings of other people.

13.Bad human relations. Personal problems and conflict with staff, suppliers, creditors and customers can easily lead to business failure.

*14.Diffusion of effort.* An entrepreneur tries to do too many things, thus failing to set priorities and focus on high-value tasks.


----------



## prawn_86

*Re: Do you have to daytrade to trade fulltime?*



tech/a said:


> 90% of Businesses fail in the First 3 yrs.




A bit off topic, but the actual figures here, and in most other Western countries is around 65% fail within the first 3 years. The 90% thrown around is not backed by any research


----------



## Pager

*Re: Do you have to daytrade to trade fulltime?*



Trembling Hand said:


> Guys I really don't get the criticism of trading fulltime because you have to "stare at a screen all day"
> 
> 
> 
> As apposed to what??
> 
> Working the average job where you stare at a screen from 9 to 5. And have your income, hours, holidays, sick leave, over time, 'career' development, earning capacity, recognition, environment, colleagues, profit and life all controlled by someone else, mostly a tosser!
> 
> 
> :bloated:





Not sure why just because anyone is in a 9 to 5 job they have someone else controlling there lives, you could say the same thing for you only your controlled by the HKFE 

Everyone trades in a different way but to be successful you don't need to be on the PC all day, some do some don't, so in answer to the opening post,  is you don't need to day trade to be successful which i guess means you can derive a livable income from just trading which i guess makes you a full time trader.

I prefer working on short term contract basis as well as trading but i can afford to be pick and choose thanks to trading which work i accept and on my conditions and i don't have to stare at a screen all day if i don't want too, but we are all made in a different mould, as in all aspects what rocks your boat wont wont rock someone else's, most of my friends think trading is a very boring subject so it rarely comes up, mind you i find the ins and outs of the plumbing or haulage business as interesting as watching paint dry


----------



## Mr J

*Re: Do you have to daytrade to trade fulltime?*



Trembling Hand]Yep Nick I sit in front of the screen @ 11:30 (HSI said:


> Guys I really don't get the criticism of trading fulltime because you have to "stare at a screen all day"
> 
> As apposed to what??
> 
> Working the average job where you stare at a screen from 9 to 5. And have your income, hours, holidays, sick leave, over time, 'career' development, earning capacity, recognition, environment, colleagues, profit and life all controlled by someone else, mostly a tosser!




As opposed to playing golf in the afternoon or something I guess. I'm with you though. I love working for myself and wouldn't have it any other way. Work for me is more like hanging around at home. I'm not glued to the screen, I do something else with my time and take regular glances. I know what I like to trade, so when I see something promising that is when I'll focus on that market.


----------



## tech/a

*Re: Do you have to daytrade to trade fulltime?*



prawn_86 said:


> A bit off topic, but the actual figures here, and in most other Western countries is around 65% fail within the first 3 years. The 90% thrown around is not backed by any research




Maybe.
But most think running a business is all about the product or service in this case trading.When infact success in the end is due to how good you are/become at business.




> I love working for myself and wouldn't have it any other way. Work for me is more like hanging around at home. I'm not glued to the screen, I do something else with my time and take regular glances. I know what I like to trade, so when I see something promising that is when I'll focus on that market.




Cant help remembering that you dont have $50k.
Seriously with the statements you have and are making youd think you actually knew.
Clearly you dont. Bit tough I know but really I dont think you qualify to make such statements.
The only one I know for sure is Radge.


----------



## Aussiest

*Re: Do you have to daytrade to trade fulltime?*



Mr J said:


> I'd be interested in a 10k->50k challenge. You wouldn't be able to offer odds that interest me though, as I feel that money would be better spent on trading than sitting in escrow. Nevermind, we'll likely have this discussion in 6-12 months .




I'm tempted to say i'll give you $200 in cash, for a bit of fun, if you can achieve this! 

Scalping average 20 points per day on the SPI @ $25.00 per point, for 262 days = $131,000. That is not including the losses occurred through being stopped out. Remember i said an _average _of 20 points per day. Is an av. of 20 points per day on the SPI a reasonable estimate?

Come on guys, what do you reckon? Let's give Mr J the challenge?!...


----------



## Mr J

*Re: Do you have to daytrade to trade fulltime?*

Tech, what does working for myself have anything to do with longterm trading success? I've worked for myself far longer than I've traded. You can't say I don't know, as you don't know me. I know myself, and despite being inexperienced at trading, I know the lifestyle, or at least my lifestyle.

Aussiest, I still have no expectation of how I will perform, other than believing I'm profitable, and knowing that with volume one doesn't need much of an edge to see large returns. I'd like to average at least 4 ticks per day, but that is just hope, not an expectation.


----------



## nomore4s

*Re: Do you have to daytrade to trade fulltime?*



tech/a said:


> Cant help remembering that you dont have $50k.
> Seriously with the statements you have and are making youd think you actually knew.
> Clearly you dont. Bit tough I know but really I dont think you qualify to make such statements.




I tend to agree, talks the talk but is yet to actually walk the walk.



Mr J said:


> I'd like to average at least 4 ticks per day, but that is just hope, not an expectation.




Mr J, do you still live at home with your parents? Because I find it hard to believe anyone could live of an average of 4 ticks a day without living with their parents or having someone else to pay most of the bills. Especially since I recall you saying your living expenses are minimal and you could compound most of your winnings.

I now understand your lack of understanding when very experienced traders have mentioned the difficultly of compounding and growing capital after living expenses and tax are removed from the profit.


----------



## Trembling Hand

*Re: Do you have to daytrade to trade fulltime?*



Pager said:


> Not sure why just because anyone is in a 9 to 5 job they have someone else controlling there lives, you could say the same thing for you only your controlled by the HKFE



hardly my point 
If I don't want to work tomorrow I don't have to or next week. Try ringing up your boss and tell him that your not coming in next week cause you don't feel like working. :

Or tell your boss that you did some really good work last week and have decided to reward yourself by taking a holiday although you have no holiday leave left :

Or telling her that you will not work on that project they need anymore because your colleges are wankers.

Or telling him that you did some really good work last week and you should get 10 x your wage. Working for yourself, which trading is, is the ultimate leverage. Effort and smarts is rewarded exponentially not so as a wage slave. Working for someone else is always 1 to 1 leverage.


----------



## Trembling Hand

*Re: Do you have to daytrade to trade fulltime?*



kennas said:


> I think it's the stare at the screen all day _by yourself_ which is the connotation.



Yep agree its a boring isolating job for sure. One of the reasons why I always keep coming back to the idea of working prop.



tech/a said:


> 90% of Businesses fail in the First 3 yrs.



That is such a **** stat. Its completely wrong. It comes from, I think, the stats of business names not being re register after the initial registration.

Which has absolutely no link to actual real business that start.  

And of course doesn't take into account the many many business that change name, especially after they are successfully on sold to the next owners who then change the biz name. So there is a very successful business, an exit strategy implemented, being thrown around as a failure.


----------



## tech/a

*Re: Do you have to daytrade to trade fulltime?*



Trembling Hand said:


> That is such a **** stat. Its completely wrong. It comes from, I think, the stats of business names not being re register after the initial registration.
> 
> Which has absolutely no link to actual real business that start.
> 
> And of course doesn't take into account the many many business that change name, especially after they are successfully on sold to the next owners who then change the biz name. So there is a very successful business, an exit strategy implemented, being thrown around as a failure.




If you consider business success making a below Average wage or No wage then it is complete ****




> hardly my point
> If I don't want to work tomorrow I don't have to or next week. Try ringing up your boss and tell him that your not coming in next week cause you don't feel like working.
> 
> Or tell your boss that you did some really good work last week and have decided to reward yourself by taking a holiday although you have no holiday leave left
> 
> Or telling her that you will not work on that project they need anymore because your colleges are wankers.
> 
> Or telling him that you did some really good work last week and you should get 10 x your wage. Working for yourself, which trading is, is the ultimate leverage. Effort and smarts is rewarded exponentially not so as a wage slave. Working for someone else is always 1 to 1 leverage.




*If you cant do this then you dont have a successful business.
Now tell me 90% of people who start a business end up with this! *



> Working for someone else is always 1 to 1 leverage



Tell me more,I'm interested in how you interpret that!


----------



## Trembling Hand

*Re: Do you have to daytrade to trade fulltime?*



tech/a said:


> If you consider business success making a below Average wage or No wage then it is complete ****



Tech you said that 90% fail based on what? A stat that you don't know where it comes from. I have told you where I think it comes from, business name registration - you can hardly count them as business. 

And I would say that someone who didn't make it to riches hasn't completely failed. Sure a lot of people end up trapped in business that they are essentially a slave to. I've been there. But where is the is failure/success line? receivership/bankruptcy? less than 2 time the average wage? If you don't reach the point of absolute freedom is that failure? Is your stat so black and white between success and failure?

As for the working for someone else you get paid based on hours X rate for most jobs. You can only increase your hours so far and your hourly rate very quickly hits a ceiling. Only jobs that can leverage other peoples work are things like managers, CEOs etc. But what % are they?


----------



## prawn_86

*Re: Do you have to daytrade to trade fulltime?*

As i have said before Tech, the actual stats for failure (defined as bankruptcy/insolvency) is around 65% in the first three years.

The 90% is just an urban legend. If you want me to provide studies to back this fact up let me know and it will take me a while to find them again


----------



## Trembling Hand

*Re: Do you have to daytrade to trade fulltime?*

As for the original thread question to "do you have to daytrade to trade fulltime?" here is a formula that I would think goes to answering the question,

Capital required =  Current income X 4
_____________  _________________________
_______________  (% Return /100)

If you earn $50,000 and think you can make 40% per year I reckon you would need at least $500,000 capital to replace your wage. I don't think the method has a lot to do with trading fulltime. Its got more to do with capital and return. I wouldn't give up the day job on 2 times your wage earnings as that is essentially the same as you lose 1/2 on tax, expenses, blah blah. 3 times dosn't leave you much for compounding and the 1 in 3 month DD etc. When you get to 4 times current earning the R:R starts moving in your favour in regards to compounding.

IMO.


----------



## tech/a

*Re: Do you have to daytrade to trade fulltime?*



> Is your stat so black and white between success and failure?




You may have noticed that's the way I look at everything in life.
No grey.
Black/White.
Right/Wrong.
Leave/Fix.

I'm quoting the urban myth.

So will re phrase. As it seems to get people excited.
A large majority of business fail my measure of success.
My idea of a successful business is one which allow you (The owner) the freedom of the restraints of both time and money.



> Capital required = Current income X 4
> _________________________
> (% Return /100)
> 
> If you earn $50,000 and think you can make 40% per year I reckon you would need at least $500,000 capital to replace your wage.




Maths not a strong point T/H?


----------



## Trembling Hand

*Re: Do you have to daytrade to trade fulltime?*



tech/a said:


> Maths not a strong point T/H?




I don't think there is anything wrong with the maths, its HTML editing that I have problems with : (better now?)


----------



## Trembling Hand

*Re: Do you have to daytrade to trade fulltime?*



tech/a said:


> So will re phrase. As it seems to get people excited.
> A large majority of business fail my measure of success.
> My idea of a successful business is one which allow you (The owner) the freedom of the restraints of both time and money.




Well by your measure then being successful at trading is more likely to be a "successful business" than most business. Not having staff, suppliers nor customers problems leaves you with just 1 worry - profit. Get that right and you have far more freedom than a 'normal' biz from my experience.


----------



## nunthewiser

*Re: Do you have to daytrade to trade fulltime?*



tech/a said:


> You may have noticed that's the way I look at everything in life.
> No grey.
> 
> My idea of a successful business is one which allow you (The owner) the freedom of the restraints of both time and money.





i operate and live in one big GREY area  i am comfortable moving along with change and adapting to whatever enviroment i find me or my intrests in 

view nothing but black and white and miss 80% of the world pass you by

agree re business and success but with every walk one takes , one must still build the foundation to create the freedom.


----------



## tech/a

*Re: Do you have to daytrade to trade fulltime?*



> Not having staff, suppliers nor customers problems leaves you with just 1 worry - profit




Now there is that!


----------



## Mr J

*Re: Do you have to daytrade to trade fulltime?*



nomore4s said:


> I tend to agree, talks the talk but is yet to actually walk the walk.
> 
> Mr J, do you still live at home with your parents? Because I find it hard to believe anyone could live of an average of 4 ticks a day without living with their parents or having someone else to pay most of the bills. Especially since I recall you saying your living expenses are minimal and you could compound most of your winnings.
> 
> I now understand your lack of understanding when very experienced traders have mentioned the difficultly of compounding and growing capital after living expenses and tax are removed from the profit.




"Talk the talk and walk the walk" is a pretty foolish line. It suggests that an opinion is only worthwhile if it has results behind it, and this is quite shallow. An opinion should be judged on its own merit. If it is clever or insightful, I don't care who said it. I'm not suggesting that everything I say is clever or insightful, but it's not garbage either. Feel free to point out any errors in my posts. If most of it is fine, what's the problem?

My knowledge is drawn from experience, and most of my trading knowledge was aquired though my previous activities. I've been doing those a while, so yes, much of what I say has experience behind it. Just about the only thing I'm inexperienced with in trading are the trades themselves, and I've never suggested otherwise.

No, I don't live with my parents. My expenses are small, necessary expenses being $400. As for 4 ticks a day, please consider that one can trade multiple contracts. I believe I can compound most of my profit as I expect my profit to be far larger than my expenses. I admit this year probably won't be great, but I'm in this for the long haul, not to make a quick buck over a year or two.

I don't lack understanding of compounding at all. I always point out that it depends on personal circumstance, perhaps you missed that.


----------



## Frank D

*Re: Do you have to daytrade to trade fulltime?*



Mr J said:


> I find it hard to believe that a trader wouldn't compound. Increasing position size after gaining capital is compounding, and I would think all traders do this.





That has nothing to do with compounding. Leverage and unknown profits 
and losses and the theory of compounding aren't the same.

'Compounding' is based the accumulation of interest paid back to the 
principle over the long term. The greater the interest and the longer 
the timeframe, the larger the interest is paid back to the principle.

You want to get to the point of earning enough interest so that you don’t
 have to work ever again. That's compounding and it should be part of a 'long term plan'.

You’re trying to compare compounding with  leverage positions through a 
form of speculation or gambling. You shouldn't. You can’t 
separate potential losses to the exact same concept of compounding.

The 'short term plan' is working with leverage positions so you increase
 your primary income. That can be as a full time trader, or adding
 extra income to your own primary job, which then leads to a higher 
standard of living and wealth creation.

A smart trader would and should be working on a long term plan all the time.

If they're not then it probably means that they 'couldn't give a toss about 
a long term plan', or  'they don't fully understand the concept',  or 'they 
are under capitalised', or  their short-term plan isn't going too well and 
they continually lose money trading.

Mr J,

Maybe you don't give a toss about a long term plan....

But I think either you don't fully understand the concept, you're
 under capitalised, or your short-term plan isn't going too well.


----------



## Mr J

*Re: Do you have to daytrade to trade fulltime?*



> 'Compounding' is based the accumulation of interest paid back to the
> principle over the long term. The greater the interest and the longer
> the timeframe, the larger the interest is paid back to the principle.




That is one definiton. Another is to increase, such as what would be achieved by reinvesting profits (or losses)  into the initial capital.



> Maybe you don't give a toss about a long term plan....




I do, but it's not currently a focus. I would like to see that my trading can sustain myself before thinking about long-term strategies. I have no problem admitting that I no nothing about long-term strategies, and don't talk about them, which is why my comments in Tech's thread were quite limited (to arguing that one can compound short-term).


----------



## professor_frink

*Re: Do you have to daytrade to trade fulltime?*



Mr J said:


> "Talk the talk and walk the walk" is a pretty foolish line. It suggests that an opinion is only worthwhile if it has results behind it, and this is quite shallow. An opinion should be judged on its own merit. If it is clever or insightful, I don't care who said it. I'm not suggesting that everything I say is clever or insightful, but it's not garbage either. Feel free to point out any errors in my posts. If most of it is fine, what's the problem?




Most people will be annoyed and call you out when you are misrepresenting yourself- you speak as if you have quite a bit of experience when in fact you have barely enough to be a danger to yourself(not saying that this has been done intentionally on your part, but up until this thread I thought you had at least a little bit more experience than you actually do)

Personally, I've been trading since early 2001 and consider myself to be only just moving past the stage of being a rank amateur.I was profitable pretty quickly in my early trading years, but looking back on it now I put it down to being fairly lucky in the way my trading developed in relation to the general state of the market at the time. It wasn't until the middle of 2007 when I realised exactly how little I knew, and it's something that I've been working on ever since. 2 years on and I'm still a massive work in progress. 

You'll have to excuse mere mortals like myself for having a few doubts when someone shows up with what only amounts to a drop in the ocean of experience and says that trading is easy and that certain things can be done when you haven't actually done them  yet


----------



## tech/a

*Re: Do you have to daytrade to trade fulltime?*



> barely enough to be a danger to yourself




Hahaha.

Still its getting more and more each day.


----------



## Mr J

*Re: Do you have to daytrade to trade fulltime?*



> Most people will be annoyed and call you out when you are misrepresenting yourself- you speak as if you have quite a bit of experience when in fact you have barely enough to be a danger to yourself




That's their problem for making assumptions. I don't misrepresent myself at all. I have regularly stated that I'm relatively new to trading. If people choose to dismiss everything I say, then that is their choice. It's typical human behaviour to judge the person rather than the opinion, but I can't help that.



> You'll have to excuse mere mortals like myself for having a few doubts when someone shows up with what only amounts to a drop in the ocean of experience and says that trading is easy and that certain things can be done when you haven't actually done them yet




One can't argue with a subjective opinion. I never said trading was easy as a fact, I said that I find it easy. You can't argue that it isn't easy for me. If you have doubts, again that is not my problem.

Let's come back to this:



> but up until this thread I thought you had at least a little bit more experience than you actually do




If I sound like I have more experience than I do, then perhaps I know more than what should be expected of someone with my limited experience. That may be true, and it might not as I don't know how others here see me. However, if what I say generally makes sense, then judge me by my opinions and not my inexperience.



> Personally, I've been trading since early 2001




Are you a day trader? Just wondering, as when internet poker came about there was a similar situation. The older, "live poker" crowd suddenly found themselves competing with a lot of apparent young rookies. These young kids had been playing for just a year or few - if that. However, the old crowd discovered these kids were pretty damn good. Why? These kids were multitabling online poker and gaining tremendous experience in a short amount of time. Possibly a few months online saw similar action to what a live poker player would see in a lifetime. 

I bring this up because if you're not a day trader, and for whoever is not, then it's reasonable to expect that I will become experienced far more quickly. In a few months, I will probably see more than what slower traders might see in years. Sure, they will have experienced situations that I will not have experienced, but overall my rate of experience will grow at a much faster rate. 

Not only am I a daytrader, but I also trade fast charts. I will make more trades than a 5 min chart trader for example. It's quite possible that a year of trading will see me with as much relative experience as an EOD trader would see in a lifetime.

There is also the possibility that maybe I'm just a quick learner. Perhaps something that takes someone a year to learn, I can do in a few months. Perhaps after 6 months I'm as good as someone may be after six.

The point I'm making (since the last quote) is not to suggest that I'm a trading genius, and I'm not stating any of it is true. All I'm saying is that time is not necessarily a good judge of experience, and that I may be more or less experienced than anyone can assume. All anyone is doing here is making an uninformed assumption. A good trader wouldn't do that, and would acknowledge the possibilities, so I'm surprised so many are so quick to make assumptions about me (actually I'm not, it's human nature, but traders should know better).

I hope these comments are considered rather than automatically skipped because I'm "inexperienced". Otherwise, there's no point in posting.


----------



## gooner

*Re: Do you have to daytrade to trade fulltime?*



Trembling Hand said:


> hardly my point
> If I don't want to work tomorrow I don't have to or next week. Try ringing up your boss and tell him that your not coming in next week cause you don't feel like working. :
> 
> Or tell your boss that you did some really good work last week and have decided to reward yourself by taking a holiday although you have no holiday leave left :
> 
> Or telling her that you will not work on that project they need anymore because your colleges are wankers.
> 
> Or telling him that you did some really good work last week and you should get 10 x your wage. Working for yourself, which trading is, is the ultimate leverage. Effort and smarts is rewarded exponentially not so as a wage slave. Working for someone else is always 1 to 1 leverage.




Ah but if you have a job, you save lives, teach or do something useful.

Instead of transferring bits of money back and forward all day when trading full time. You do not grow food, or teach or contribute in any meaningful way to the production of the resources that you consume


----------



## sleepy

*Re: Do you have to daytrade to trade fulltime?*



gooner said:


> Ah but if you have a job, you save lives, teach or do something useful.




Thats debatable .... 
For every job that does one of the above you could name 3 that dont .....



gooner said:


> Instead of transferring bits of money back and forward all day when trading full time. You do not grow food, or teach or contribute in any meaningful way to the production of the resources that you consume.




Although you make a moot point ...and its a question that Brett Steenbarger addressed on Friday ....

*What is the value of trading beyond making money?*

It's a question that arises for many traders. So many occupations derive their nobility from contributing to the welfare of others in direct ways. Where is the nobility in trading?

In my reply, echoing Ayn Rand, I challenged the notion that nobility is solely or primarily a function of assisting others.

In mastering risk and uncertainty; in learning to pursue opportunity in effortful ways; in making ourselves better as decision makers; in becoming more disciplined actors; _we improve ourselves as human beings. That carries over to many areas of life, so that we can become better business partners, spouses, parents, and friends._

Indeed, this might be the most important distinction between trading well and trading poorly: When we trade well, we make ourselves stronger, better; we tap into the best within us. When we trade poorly, we succumb to our lowest common denominators.

The value of trading is the value of any competitive performance activity: _in its mastery, we become just a bit closer to our ideals--and that ripples throughout our lives._

http://traderfeed.blogspot.com/2009/07/what-is-value-of-trading.html

sleepy


----------



## gooner

*Re: Do you have to daytrade to trade fulltime?*



sleepy said:


> Thats debatable ....
> For every job that does one of the above you could name 3 that dont .....
> 
> Although you make a moot point ...and its a question that Brett Steenbarger addressed on Friday ....
> 
> *What is the value of trading beyond making money?*
> 
> It's a question that arises for many traders. So many occupations derive their nobility from contributing to the welfare of others in direct ways. Where is the nobility in trading?
> 
> In my reply, echoing Ayn Rand, I challenged the notion that nobility is solely or primarily a function of assisting others.
> 
> In mastering risk and uncertainty; in learning to pursue opportunity in effortful ways; in making ourselves better as decision makers; in becoming more disciplined actors; _we improve ourselves as human beings. That carries over to many areas of life, so that we can become better business partners, spouses, parents, and friends._
> 
> Indeed, this might be the most important distinction between trading well and trading poorly: When we trade well, we make ourselves stronger, better; we tap into the best within us. When we trade poorly, we succumb to our lowest common denominators.
> 
> The value of trading is the value of any competitive performance activity: _in its mastery, we become just a bit closer to our ideals--and that ripples throughout our lives._
> 
> http://traderfeed.blogspot.com/2009/07/what-is-value-of-trading.html
> 
> sleepy




I think most jobs are useful in some way to running our society - garbos, bank clerks, accountants. They all work to produce, service or support production or service. That said, there are what I call negative occupations that we would be better without - murderers, car thieves, prostitutes. Day trading as an occupation sits above these in my view.

And the mastery piece - it may well make you more disciplined and help in your private life, but you are still contributing nothing to society


----------



## wayneL

*Re: Do you have to daytrade to trade fulltime?*



gooner said:


> And the mastery piece - it may well make you more disciplined and help in your private life, but you are still contributing nothing to society




Nonsense.

Traders buy stuff, hire people to do stuff. 

Look deeper.


----------



## beerwm

*Re: Do you have to daytrade to trade fulltime?*



gooner said:


> I think most jobs are useful in some way to running our society - garbos, bank clerks, accountants. They all work to produce, service or support production or service. That said, there are what I call negative occupations that we would be better without - murderers, car thieves, prostitutes. Day trading as an occupation sits above these in my view.
> 
> And the mastery piece - it may well make you more disciplined and help in your private life, but you are still contributing nothing to society




Its distributing money from the unaware/uneducated to the wise/cunning.
- think natural selection.

- same as a casino really.


----------



## Trembling Hand

*Re: Do you have to daytrade to trade fulltime?*



gooner said:


> And the mastery piece - it may well make you more disciplined and help in your private life, but you are still contributing nothing to society




How many foreign dollars do you bring from outside the country? I know I bring a few here and there. My business is an export business. That increases the wealth of Australia and I'm guessing you too :. Most jobs support the consumption industry. Whats the value of them?


But besides that I consider my "job" similar to a tennis player or football player or even an artist? What "value" do they have? What lives do they save? Probably none but they entertain the poor masses. Does that has value? it obviously does that's why some of the biggest earners are entertainers of some sort. That's why I get paid so well and upset dudes who scrape out there existence with a 50 hour week. :

And I could go on about the importance of speculators to set price in a capitalist system for it to work. But I guess you're just trying to get a ride out of someone.


----------



## Bobby

*Re: Do you have to daytrade to trade fulltime?*



Mr J said:


> If I sound like I have more experience than I do, then perhaps I know more than what should be expected of someone with my limited experience. That may be true, and it might not as I don't know how others here see me. However, if what I say generally makes sense, then judge me by my opinions and not my inexperience.




Hey Mr J , I find you most interesting , keep up your posts .


----------



## nomore4s

Mr J said:


> "Talk the talk and walk the walk" is a pretty foolish line.




It is true though. At the moment all you have is theory, in every endevour I've ever done there is always a gap between theory & practical application.




> As for 4 ticks a day, please consider that one can trade multiple contracts. I believe I can compound most of my profit as I expect my profit to be far larger than my expenses. I admit this year probably won't be great, but I'm in this for the long haul, not to make a quick buck over a year or two




You say you don't have $50,000 but now you say you trade multiple contracts. I'm not saying this isn't possible but it would mean you are very under capitalised imo. You will also need to produce amazing returns on your capital every year just to pay for your expenses (after tax) let alone be able to grow your capital.

You'll have to forgive me for taking what you say with a grain of salt. You portray yourself as some accomplished trader when in fact you're anything but, the internet is full of wannabe legends and tbh I'm yet to see anything from you except theories & trading cliches that you can find in a million places on the net.

I'm not saying you won't be successful at trading or that you won't achieve your goals - hell you might turn out to be the next TH but you have only just begun your journey.


----------



## It's Snake Pliskin

*Re: Do you have to daytrade to trade fulltime?*



gooner said:


> Ah but if you have a job, you save lives, teach or do something useful.
> 
> Instead of transferring bits of money back and forward all day when trading full time. You do not grow food, or teach or contribute in any meaningful way to the production of the resources that you consume



Wealth creation benefits a society. Communism doesn't.


----------



## sleepy

*Re: Do you have to daytrade to trade fulltime?*



gooner said:


> Ah but if you have a job, you save lives, teach or do something useful.




AND what about all those people who currently dont have jobs or have recently lost their jobs because of the recession?

Trading is a *performance activity* that rewards the successful and spits out the weak ... just like any other job/profession. Its also why trading can provide _opportunities_ that other career paths dont provide, and why more and more people are pursuing self-directed trading and investment as a _way of taking control _of their futures.

At the end of the day, unless you have true financial freedom you need money to live and trading can provide that if you are any good. Although like most things it requires lots of work and hundreds of hours of deliberate practise and review.

------------------------------------

...... _ "To be sure, trading is not exactly the kind of secure occupation with benefits that many mid-career individuals might be expected to seek. What I hear from many of these newer market participants is that they feel a need to take control of their lives. Some are looking to take control of their finances after receiving disastrous buy-and-hold advice from advisers. Others are looking to take control by creating jobs for themselves when traditional alternatives are lacking.

Many see trading as ultimate control: *you eat what you kill; your income is solely dependent upon your efforts and your success*.

Think of those who are traumatized by child or spouse abuse, by violent crime, or by debilitating accidents. In every case where there has been a psychological recovery, it has been because the victim rose above victimhood and found ways to regain control. For many people, it seems, self-directed trading and investment have become a means for crafting a future in the wake of economic losses and tattered social contracts.

It's a sobering lesson, but it's also empowering: You cannot rely on any outside agent--not government, not employers--to secure your financial future. As one who works with traders, I worry for those who enter the market arena without proper training and preparation. As a psychologist, however, I laud the entrepreneurial spirit that leads people to rise above their losses and pursue fresh, creative horizons." _

http://traderfeed.blogspot.com/2009/07/thoughts-on-changing-demographic-face.html
------------------------------------

sleepy


----------



## MRC & Co

*Re: Do you have to daytrade to trade fulltime?*



Bobby said:


> Hey Mr J , I find you most interesting , keep up your posts .




I'll back that.

Enjoy your posts.


----------



## Bobby

*Re: Do you have to daytrade to trade fulltime?*



MRC & Co said:


> I'll back that.
> 
> Enjoy your posts.




Thanks MRC , 

 Mr J may well surprise , scalping  feed I think could be his forte


----------



## Mr J

Thanks Bobby.



			
				nomore4s said:
			
		

> It is true though. At the moment all you have is theory, in every endevour I've ever done there is always a gap between theory & practical application.




It's not true, because my knowledge comes from experience. It just seems that you choose to dismiss that experience because it is not trading. 



> You say you don't have $50,000 but now you say you trade multiple contracts. I'm not saying this isn't possible but it would mean you are very under capitalised imo.




It's fine unless IB goes down during a crash while I'm in a trade.



> You'll have to forgive me for taking what you say with a grain of salt. You portray yourself as some accomplished trader when in fact you're anything but, the internet is full of wannabe legends and tbh I'm yet to see anything from you except theories & trading cliches that you can find in a million places on the net.




I haven't portrayed myself to be anything other than what I am. Like I said before, I'm not the one to blame if you make assumptions about me. I'm not trying to be an internet legend, I just want to make a living from trading.



> I'm not saying you won't be successful at trading or that you won't achieve your goals - hell you might turn out to be the next TH but you have only just begun your journey.




I freely admit I'm a novice at trading, but that doesn't make me a novice at everything related to trading. Yes, most of my posts aren't specifically about trades or markets, but that is because it is my weakness, and I'm not the type to talk about something I know nothing about. My strength is in what you dismissed as 'theory'. I consider it valuable, and I couldn't be a profitable trader without it. I feel I've had to experience a lot to find myself in a position to jump comfortably into trading. I might be a novice, but I've spent 7 years to get to this point.


----------



## gooner

*Re: Do you have to daytrade to trade fulltime?*



wayneL said:


> Nonsense.
> 
> Traders buy stuff, hire people to do stuff.
> 
> Look deeper.




Hmm, a few thousand bucks to an accountant, some brokerage fees. That is just expenditure. The actual action of day trading does not add generate goods or services for the population as a whole.



beerwm said:


> Its distributing money from the unaware/uneducated to the wise/cunning.
> - think natural selection.
> 
> - same as a casino really.




Quite right. And we agree that casinos are a great addition to our society. Actually, they are entertainment for some people, a service. So casinos are a service to the community.



Trembling Hand said:


> How many foreign dollars do you bring from outside the country? I know I bring a few here and there. My business is an export business. That increases the wealth of Australia and I'm guessing you too :. Most jobs support the consumption industry. Whats the value of them?
> 
> 
> But besides that I consider my "job" similar to a tennis player or football player or even an artist? What "value" do they have? What lives do they save? Probably none but they entertain the poor masses. Does that has value?




Scalping a few dollars off foreigners via trading does not add make anything or provide a service. Yes you are reducing the financial wealth of foreigners - if that makes you proud, so be it.

As for sports stars, they provide entertainment to the masses as you say. So there is value in that - lots of people get great joy from watching sports. Not so, your day trading.



It's Snake Pliskin said:


> Wealth creation benefits a society. Communism doesn't.




And you think that buying and selling shares all day creates wealth for a society? No increase in value, if you are a winner, someone else is a loser.



sleepy said:


> AND what about all those people who currently dont have jobs or have recently lost their jobs because of the recession?
> 
> Trading is a *performance activity* that rewards the successful and spits out the weak ... just like any other job/profession. Its also why trading can provide _opportunities_ that other career paths dont provide, and why more and more people are pursuing self-directed trading and investment as a _way of taking control _of their futures.
> 
> sleepy




Not sure about the spit out the weak comment, but otherwise agree. However, the activity does not generate services or goods for society. You are living off  everyone's else's production of real goods and services.


And I think someone said I was just trying to get a rise from someone. Not really. I don't feel as strongly about this issue as my posts may suggest, however find it interesting to sometimes argue a position strongly. I am unemployed and living off my savings/investments and I trade a bit on the side, so could be argued to be a hypocrite. However, I am actively looking for a job....


----------



## tech/a

> However, I am actively looking for a job....




Why arent you consifering Trading for a living.
Or is it that you dont wish to work for youself----many dont.

(I have had staff come to me and make it clear that they will work all day everyday at a fair rate of pay BUT do nor want any leadership or responsibility rolls. These people are great employees loyal and hard working who I would dearly love to take on more responsibility as they short sell themselves in my view---but I adhere to their wishes as I value them.)

Point is not everyone is cut out to work for themselves and even fewer could trade for a living--they wouldnt be cut out for it.


----------



## wayneL

*Re: Do you have to daytrade to trade fulltime?*



gooner said:


> Hmm, a few thousand bucks to an accountant, some brokerage fees. That is just expenditure. The actual action of day trading does not add generate goods or services for the population as a whole.




That's not really looking very deep.

_Que sera sera - vive le difference_ etc


----------



## gooner

tech/a said:


> Why arent you consifering Trading for a living.
> Or is it that you dont wish to work for youself----many dont.
> 
> (I have had staff come to me and make it clear that they will work all day everyday at a fair rate of pay BUT do nor want any leadership or responsibility rolls. These people are great employees loyal and hard working who I would dearly love to take on more responsibility as they short sell themselves in my view---but I adhere to their wishes as I value them.)
> 
> Point is not everyone is cut out to work for themselves and even fewer could trade for a living--they wouldnt be cut out for it.




tech/a

In terms of running a real business (not trading), I personally do not have the self-motivation to run one. I am too laid back. But better that I know that than blow $500k on buying a franchise and destroying the value.

However, as an employee, I am happy to work hard and indeed to manage people and take responsibility.

As for day trading - two reasons I would not do it. Firstly, as mentioned in my post, I personally want to make some contribution to society and I can not do that via day trading. Secondly, I don't think that I would be particularly good at it. [Although, I started investing in May last year, was down 30% at one stage, but managed to get in the green and am now 5% up. But I put that down to luck]


----------



## cutz

Hi gooner,

So we can assess your contribution to society, what do you do for a crust ?


----------



## mazzatelli1000

gooner said:


> As for day trading - two reasons I would not do it. Firstly, as mentioned in my post, I personally want to make some contribution to society and I can not do that via day trading.




Who said you had to contribute to society via your job? I help out with charity work for my sister and also help instruct at our local martial arts school to teach folk self defence. 

Trading/being a participant in the market will aid liquidity e.g. anyone who has shares they no longer desire can pass the parcel. Without it how would companies, who in your opinion contribute to society, raise equity capital as a form of finance if the intial potential investors do not have a way out?


----------



## nomore4s

> I haven't portrayed myself to be anything other than what I am. Like I said before, I'm not the one to blame if you make assumptions about me. I'm not trying to be an internet legend, I just want to make a living from trading.



Really?


Mr J said:


> Give me your $10500, and I'll give you back double that at year's end.






Mr J said:


> Chaka, give me 4k and I'll have you double the other 6.5k within a couple of months.






> My strength is in what you dismissed as 'theory'. I consider it valuable, and I couldn't be a profitable trader without it. I feel I've had to experience a lot to find myself in a position to jump comfortably into trading. I might be a novice, but I've spent 7 years to get to this point.




The point I'm making is there is always a difference between theory and practical application. Theory is important as a starting point but it is the practical application that actually makes the money.

An example:


Mr J said:


> I agree that 10-20k could be a struggle if one has to pay the bills, but 50k is a walk in the park. You're willing to bet that I can't take $50k and finish with >$100k after 12 months?




50k to 100k in 12 months in theory is achievable and might even sound like "a walk in the park" but in reality it is not so easy and very few traders can actually do it and even less can do it consistently. Maybe you are one of these traders but neither of us know that yet.

Mr J, I actually think you have the makings of a good trader and have a good foundation to build on what I'm calling you out on is how you bang on about how easy it is and how this & that is possible but you haven't actually done any of it yet. I think you'll find the practical application of some of these claims will be a bit harder then you think.

You're welcome to a reply but this is my last post on this subject.


----------



## cutz

mazzatelli1000 said:


> Who said you had to contribute to society via your job?




Exactly, 

Many of us choose to help out through other means, that and taxes paid due to realized gains on trading profits, unlike other form of investments, (i.e. property investor tax routs) traders are happy to pay up.

Gooner, i can understand your cynicism, getting caught up in last years sucker rally must have hurt, ouch.


----------



## Pager

I think many who think day trading is boring or a negative experience "starring at a screen all day", have had a bad experience or cant do it and lets face it, most of us cant !

I have day traded as in intra day trading in front of a screen holding from a minute to a few hours and my results were mixed, i didnt lose money but i didnt make very much either, so it became frustrating and boring for me so my opinion of it is as i stated in another post, maybe if i had made money i would have a different view from more positive experience.

My point in earlier posts is that you don't need to day trade to make enough to live on and so could be a full time trader and i firmly believe there are plenty of other people who make a good living from trading without having to day trade in front of a screen all day.


----------



## wayneL

cutz said:


> Gooner, i can understand your cynicism, getting caught up in last years sucker rally must have hurt, ouch.




Great point cutz.

I don't know gooner's circumstances, but I have noticed that many traders get all moral and Calvinistic after a ball breaking loss or two.

Who says you *have* to contribute to society anyway. This should be a choice (though often by force via taxes etc). As Mazza points out, one can choose to do so in any number of ways.

_Dum Vivimus, Vivamus_ - Epicurus 
(While we live, let us live)


----------



## gooner

cutz said:


> Hi gooner,
> 
> So we can assess your contribution to society, what do you do for a crust ?




Unemployed as mentioned. But normally work as an accountant. So let the barbs flow



mazzatelli1000 said:


> Who said you had to contribute to society via your job? I help out with charity work for my sister and also help instruct at our local martial arts school to teach folk self defence.
> 
> Trading/being a participant in the market will aid liquidity e.g. anyone who has shares they no longer desire can pass the parcel. Without it how would companies, who in your opinion contribute to society, raise equity capital as a form of finance if the intial potential investors do not have a way out?




I also do voluntary work.

Agree on liquidity point, but not sure much additional value added by day traders



wayneL said:


> Great point cutz.
> 
> I don't know gooner's circumstances, but I have noticed that many traders get all moral and Calvinistic after a ball breaking loss or two.
> 
> Who says you *have* to contribute to society anyway. This should be a choice (though often by force via taxes etc). As Mazza points out, one can choose to do so in any number of ways.
> 
> _Dum Vivimus, Vivamus_ - Epicurus
> (While we live, let us live)




As mentioned, I was down 30%, but now in the green, but I am not moral and Calvanistic about it.  Even when I was in the red, I understood the risks I took and certainly blamed no one else but me.

I agree lots of ways to contribute and does not have to be via a day job.

I'm not suggesting day trading be banned.  I think it can be an interesting hobby.  It is a perfectly legal way to earn a crust. I just think you are kidding yourself if you think it adds much if any value to society.


----------



## wayneL

gooner said:


> I just think you are kidding yourself if you think it adds much if any value to society.




Nup, couldn't give a fat rat's whether trading does or not. My profits do however and you're kidding yourself if you think they don't.


----------



## prawn_86

gooner said:


> I just think you are kidding yourself if you think it adds much if any value to society.




I can see what you are trying to say, but as Wayne said, if you look deeper there are a lot more benefits.

Lets assume someone can make daytrading, double what he is worth in the workforce (consistently). So if he were employed he would get 100k pa, whereas trading he can make 200k pa. This therefore gives him 100k pa extra to fund the economy. 

Extend the house, buy another house, pay for tradies, go out for meals, give to charity, splurge on the kids, travel etc etc all of these things are providing employement for others and therefore contibuting to society


----------



## mazzatelli1000

gooner said:


> Unemployed as mentioned. But normally work as an accountant. So let the barbs flow




Accountants [I was formerly one], some arms like auditing and financial reporting don't add sh*t all value. The information reported is past the balance date, and the fees charged are enormous. If there is any value added it is to those who have vested interests in the entity in question, not society.

The theory is it provides "assurance", but tell that to shareholders and parties related to Allco.

You will no doubt have learnt about the conceptual framework etc, accounting is a profession built on BS theory not natural law, with standards produced in a web of complexity to make it specialised and hence charge a high fee for its service.

How about insolvency? 

In the end, people have jobs to make a living for themselves and their family, if you really want to add value, work for very minimal pay - i.e. enough for you to survive so that your service/product can be helpful and cost effective for society.


----------



## bonkerrs

prawn_86 said:


> Lets assume someone can make daytrading, double what he is worth in the workforce (consistently). So if he were employed he would get 100k pa, whereas trading he can make 200k pa. This therefore gives him 100k pa extra to fund the economy.
> 
> Extend the house, buy another house, pay for tradies, go out for meals, give to charity, splurge on the kids, travel etc etc all of these things are providing employement for others and therefore contibuting to society



 And... pays stacks of tax and brokerage - which pays for someone's wages, who goes out for dinner and buy's vegemite for the kids and so on and so on. Keeping the economic wheel turning!


----------



## gooner

prawn_86 said:


> I can see what you are trying to say, but as Wayne said, if you look deeper there are a lot more benefits.
> 
> Lets assume someone can make daytrading, double what he is worth in the workforce (consistently). So if he were employed he would get 100k pa, whereas trading he can make 200k pa. This therefore gives him 100k pa extra to fund the economy.
> 
> Extend the house, buy another house, pay for tradies, go out for meals, give to charity, splurge on the kids, travel etc etc all of these things are providing employement for others and therefore contibuting to society




prawn_86

Assuming equity markets are broadly flat,  the $200k has simply  been made at someone else's expense. If equity markets are going up, then there is money for everyone, but the act of day trading does not increase the amount of money. If you work for $200k your labour is making something or serving someone, so there is an increase in output.

In both cases you spend your $200k which creates jobs, but only in one case are you also directly producing a good or a service.


----------



## prawn_86

gooner said:


> Assuming equity markets are broadly flat,  the $200k has simply  been made at someone else's expense.




I disagree. (going off topic i know  )

You buy (or short) a stock and it goes up (or down). This does not mean the person you bought it off has lost out. Perhaps they had reached their profit target, or now thought the valuation had changed and wanted to sell. They have lost the opportunity cost, but not actual money, everything has an opportunity cost.

Just because you made money, doesnt mean someone else lost it IMO. The markets dont have to be a zero sum game


----------



## wayneL

gooner said:


> prawn_86
> 
> Assuming equity markets are broadly flat,  the $200k has simply  been made at someone else's expense.




DING DING DING DING DING... AWOOOOGA!

Fallacy alert.

A shocking statement coming from an accountant.


----------



## gooner

wayneL said:


> DING DING DING DING DING... AWOOOOGA!
> 
> Fallacy alert.
> 
> A shocking statement coming from an accountant.




err, perhaps you would like to explain then?


----------



## Cartman

gooner said:


> the act of day trading does not increase the amount of money. If you work for $200k your labour is *making something or serving someone*, so there is an increase in output.
> 
> In both cases you spend your *$200k which creates jobs*, but only in one case are you also directly producing a good or a service.




the 200K 'Joe Bloggs' is earning may also possibly be putting 'Jim Bloggs' and 'Jane Bloggs'  (who are happy to work for 100K each) on the unemployment queue ... 

whether you day trade or fudge balance sheets, you are nearly always cutting into someone elses lunch ... its a fact of life


----------



## Trembling Hand

Gooner your lack of understanding of the participants in the market is surprising.Then again you are an accountant: So a daytrader is of no value but where do you draw the line on participants that are of value?

Traders that hold for longer then 1 month?
So called long term "investors" holding for a couple of years?

You are kidding yourself if you think someone who hold a stock for 2 years is any different to myself who will hold for 2 minutes. We are just playing a big game of pass the parcel. Investors are not investor they are traders, they are just passing on a share that they have got from other traders.

There is no investors that add direct value to the economy. (outside of cap raising and floats etc)

The value of the share market is to create an actual liquid market and the infrastructure to enable companies to attract money when they need it (cap raising). And daytraders create that infrastructure not your Mum and Pop "investors". As an example I paid about 2 times the yearly average wage in commissions alone just to the ASX last fin year.

That's more value to the system than a so called "investors". Traders like me pay for the infrastructure everyone else uses cheaply. Not to mention all the buying that daytraders do when everyone else were losing their heads last 2 years.


----------



## >Apocalypto<

gooner said:


> err, perhaps you would like to explain then?




gooner,

If you feel this why about trading and investing???

why are you on this site? 


Back onto the topic.......

In my belief if you are successful at day (i am referring to scalping) trading then 1-2% per day is something you should be able to achieve on average.

Size of your account.... more the better, allows you to have better control of the trades u take with out the pressure of having to trade and open up risk to your stake. Anything under 20K is to risky IMO 

Do you need to day trade to make a living out of the markets?

No you don't as long a you have the right size account and you have the right type of market. Take the last bull run 2003-2007 many people made a living from buy and holding while collecting dividends. I personally knew a few that did this.

I knew one guy that started on 15k swing trading with options he took 90% calls and held till in the money. He was on fire till 2007 ended up with 150K till the first real selling.

Its amazing but he got so bored of trading he went back to work. Mind u he did get a small hiding but he still took 90k with him.

I believe anything is possible in the markets to the risk or gain side. I have the period of time from 2003 - 2009 to thank for showing me that.

Great thread........

cheers,


----------



## wayneL

gooner said:


> err, perhaps you would like to explain then?




Here's a small conundrum for you.

I buy 10,000 shares of XYZ fo 27.50.

They drop a little the next day, I sell 500 of those shares for a loss.

They drop again, I sell another 500 at a bigger loss.

They drop again by a bigger amount, I sell another 1,500 at a hefty loss.

The stock then gaps back up to 27.50 and I buy back 2,500 shares.

But then the stock starts slipping back again and I start the selling process all over again, in dribs and drabs like before, incurring further losses.

The stock eventually finishes at $21.50 and I bail out of the remaining position.

I've copped a pasting on the shares, yet I'm deliriously happy.

How so?


----------



## Timmy

wayneL said:


> I've copped a pasting on the shares, yet I'm deliriously happy.
> 
> How so?




Alcohol and drugs.


----------



## beerwm

wow,

check out the flaming on gooner.

obviously traders add nothing to society.
- its the same situation as putting 10 monkeys in a room fighting for 10 bananas.
-whatever the outcome society is no better off [10 bananas]. But individually a stronger monkey will get more bananas.
- ofcourse you can argue the inequality of each monkey not receiving a fair portion of bananas could create social problems among society - in which tradings actually detracts value from society.

dont feel bad though,
you're one of the strong monkeys
-and every monkey is a willing participant


----------



## Trembling Hand

beerwm said:


> wow,
> 
> check out the flaming on gooner.
> 
> obviously traders add nothing to society.
> - its the same situation as putting 10 monkeys in a room fighting for 10 bananas.
> -whatever the outcome society is no better off [10 bananas]. But individually a stronger monkey will get more bananas.
> - ofcourse you can argue the inequality of each monkey not receiving a fair portion of bananas could create social problems among society - in which tradings actually detracts value from society.
> 
> dont feel bad though,
> you're one of the strong monkeys
> -and every monkey is a willing participant




Hehe. But the monkey fight needs lots of ticket collectors and cleaners. that's value.


----------



## beerwm

Trembling Hand said:


> Hehe. But the monkey fight needs lots of ticket collectors and cleaners. that's value.




well,

considering that if the fight didnt occur - the monkeys would not need to clean the arena or collect tickets.

- so its really a cost to society in manpower [ monkeypower ]

dont get me wrong, trading is great.
And i'm sure I/We spend the money much better than accountants :


----------



## nomore4s

Anyone else find it ironic an unemployed accountant who trades is flaming daytraders for being an unproductive part of society?


----------



## malachii

nomore4s said:


> Anyone else find it ironic an unemployed accountant who trades is flaming daytraders for being an unproductive part of society?




I love it!!!!!


----------



## Trembling Hand

beerwm said:


> well,
> 
> considering that if the fight didnt occur - the monkeys would not need to clean the arena or collect tickets.
> 
> - so its really a cost to society in manpower [ monkeypower ]




So a capitalist system doesn't need monkey fights to function?


----------



## awg

without going into my unusual personal circs too much,

I am learning to trade because I virtually had to

as I am no longer in a position to do much other "work"

I pay GST when I spend my ill-gotten gains, so I am still contributing to the tax base 

One of the most well paid guys I know is Sales manager of a large tobacco company.

The wealthiest guy I know is worth a 9 figure sum.

He used to have 70+ people work for him, he now has about 8

You could have a long debate about the harmfulness of many occupations

day traders are harmless to the earth IMO.

Mr J... I presume you are going bananas on a Demo account, if your strategies dont work on that, they wont work with real money.

The other thing to consider is due to the rise in the markets since March, you would expect the majority of traders to have been cleaning up.

I also totally agree with Frank D about long term compounding, that is one of the main reasons I have sufficient capital, as I always re-invested every cent of dividends into my account, never drew one cent out, added additional on a regular dollar cost average, and pumped more in on rising markets.

While working full-time for many years.

btw, some of that time I was staring at a screen most of the day


----------



## beerwm

Trembling Hand said:


> So a capitalist system doesn't need monkey fights to function?




i dont see how?

if you're trading an oil contract without intention to buy oil - then i dont see how this would help valuation. - only distort price


----------



## cutz

beerwm said:


> i dont see how?
> 
> if you're trading an oil contract without intention to buy oil - then i dont see how this would help valuation. - only distort price




So without speculators, how do producers lock in prices ?


----------



## beerwm

cutz said:


> So without speculators, how do producers lock in prices ?




are speculators crucial to a marketplace?


----------



## It's Snake Pliskin

gooner said:


> Assuming equity markets are broadly flat,  the $200k has simply  been made at someone else's expense. If equity markets are going up, then there is money for everyone, but the act of day trading does not increase the amount of money. If you work for $200k *your labour *is making something or serving someone, so there is an increase in output.
> 
> In both cases you spend your $200k which creates jobs, but only in one case are you also directly producing a good or a service.




With regard to the losers part who is to say they are losers? In stocks time and investment intention are important to consider. Traders provide liquidity for investors that want MORE and NOT JUST FOR APPRECIATION purposes. An investor may be living off the dividends and the holding time is far longer than the trader whis is looking for a gain in as short a time as possible.

Now those investors that live off dividends can contribute to society by paying ACCOUNTANTS to do their tax returns. 

Communism isn't cool and is fault ridden as an ideology. 

Microlending in Africa is helping people get out of poverty - they borrow money and pay it back. They are better off because of capitalistic principles - not handouts. When they discover trading they will be far better off because they can then help each other instead of relying on the lendings of foreigners.
http://www.kiva.org/
http://www.amazon.com/You-Can-Hear-...=sr_1_1?ie=UTF8&s=books&qid=1248059182&sr=8-1


----------



## beerwm

It's Snake Pliskin said:


> Communism isn't cool and is fault ridden as an ideology.




who said anything about communism?

the debate about value is an economic one.


----------



## It's Snake Pliskin

beerwm said:


> who said anything about communism?



I did.


----------



## cutz

beerwm said:


> are speculators crucial to a marketplace?





Of course they are, how is an airline suppose to set ticket prices without knowing what they'll be paying for fuel next month/next 6 months/next year.


----------



## Trembling Hand

beerwm said:


> i dont see how?
> 
> if you're trading an oil contract without intention to buy oil - then i dont see how this would help valuation. - only distort price




Arrh so here comes a lack of understanding about price discovery.

When you are given a piece of jewelry how do you get it valued? ask an expert.

When you want to sell/buy a house how do you judge current value? Look at market prices. The more sales the greater you weigh the info from the price.

When you get a quote from 3 plumbers to fix your dunny what are you doing? Getting a valuation from an expert.

Speculators operate on both the long and short side of the coin. They are in theory experts at valuing price.


----------



## Cartman

LOL at your edit above !!




Trembling Hand said:


> When you get a quote from 3 plumbers to fix your dunny *what are you doing?*




generally wasting valuable time, unless you have more than one dunny in your house 




Trembling Hand said:


> They are in theory experts at valuing price.




Investors sometimes forget that the the market would be a pretty sad old place without the the traders doing their business


----------



## beerwm

cutz said:


> Of course they are, how is an airline suppose to set ticket prices without knowing what they'll be paying for fuel next month/next 6 months/next year.




I dont understand your argument, an airline can just buy a futures contract for next month.

my definition of trader is: never have intention to buy product- just trade price movement
-many traders dont even take the value of the product into consideration.
eg, buy high, sell higher.



Trembling Hand said:


> Speculators operate on both the long and short side of the coin. They are in theory experts at valuing price.




yes... this is all very good.

but what value is being created?


----------



## Trembling Hand

beerwm said:


> I dont understand your argument, an airline can just buy a futures contract for next month.
> 
> yes... this is all very good.
> 
> but what value is being created?




 have you every placed a trade?

Go put an order of some volume in an illiquid market and see what happens!!


----------



## cutz

beerwm said:


> I dont understand your argument, an airline can just buy a futures contract for next month.




My point exactly, who do you reckon is on the other side of that trade providing the required liquidity.


----------



## nunthewiser

Trembling Hand said:


> : Go put an order of some volume in an illiquid market and see what happens!!





yep .. comes in very handy if one has a closing order on the other side


----------



## beerwm

Trembling Hand said:


> have you every placed a trade?
> 
> Go put an order of some volume in an illiquid market and see what happens!!




I dont understand, are you saying traders make the market more competitive?
--because that would add 'value' to society... and it maybe true... but in my opinion it is inconclusive.


----------



## Trembling Hand

beerwm said:


> I dont understand, are you saying traders make the market more competitive?
> --because that would add 'value' to society... and it maybe true... but in my opinion it is inconclusive.




!!!!

I'm saying if Mr fundie went to market in the SPI right now to hedge he's long 50 mil of trades he has done today the XJO would drop 300 points in an instant without traders providing liquidity.

If Qantas wanted to pre-purchase oil contracts for the next month and went to market the oil price would rise massively without liquidity.

You don't trade do you?


----------



## cutz

beerwm said:


> I dont understand, are you saying traders make the market more competitive?
> --because that would add 'value' to society... and it maybe true... but in my opinion it is inconclusive.




Off course it adds value to society, going back to the airline example, without forward contracts the cost no hedging would show up in the form of much higher airfares, knock on effects, i'll leave that for you to work out.


----------



## skyQuake

beerwm said:


> I dont understand, are you saying traders make the market more competitive?
> --because that would add 'value' to society... and it maybe true... but in my opinion it is inconclusive.




more _liquid_

Traders and speculators are essential to capital markets otherwise it will simply collapse. Even academics who scorn traders have admitted as much.


----------



## freddy2

beerwm said:


> I dont understand your argument, an airline can just buy a futures contract for next month.
> 
> my definition of trader is: never have intention to buy product- just trade price movement
> -many traders dont even take the value of the product into consideration.
> eg, buy high, sell higher.
> 
> 
> 
> yes... this is all very good.
> 
> but what value is being created?




Some of the value created is due to redistribution of risk. In effect the traders are insuring a risk and are making a profit from doing so and thus counter-parties can create more value because their risk is reduced. Overall society is better off as a whole with insurance/risk redistribution. Many people seem to think insurance is a bad bet because the insurer makes a profit but actually both parties usually benefit. Mathematically this is due to the utility of money not being linear.


----------



## Trembling Hand

freddy2 said:


> Some of the value created is due to redistribution of risk. In effect the traders are insuring a risk and are making a profit from doing so and thus counter-parties can create more value because their risk is reduced. Overall society is better off as a whole with insurance/risk redistribution. Many people seem to think insurance is a bad bet because the insurer makes a profit but actually both parties usually benefit. Mathematically this is due to the utility of money not being linear.




Nice post freddy


----------



## gooner

One of the best things about being unemployed is that I get lots of time to spend with my kids. Which is where I have been for the last four hours - up the park, playing on swings etc. And perfect weather for it as well - a beautiful, warm, Sydney day. And a very useful contribution to society in bringing my kids up to be responsible members of society.

Am somewhat surprised  at the amount of heat generated by my fairly innocuous (and to me obviously factual) post on the social value of day trading. I am unemployed, I have a share portfolio - these are facts. If I do nothing all day, but live on my dividends and capital growth, is that making a contribution to society? Sure I buy things and generate activity that way. But I do not make anything or service anything - I rely on others to do this. Given I am unemployed, I might expect to be called a bludger (although I am not on the dole), but I would be surprised if people said I made a great contribution to society by having a share portfolio. However, posters on this thread appear to think that if you are in my situation, but sit in front of a screen all day and make a few trades, then you suddenly make a great contribution to society.

Come on, seriously guys, if you want to make your money that way fine, but accept the reality that you are not making much of a contribution.  But hey probably better than marketing cigarettes and whisky.

Gooner has a thick skin - has to given Arsenal's failure to win anything for a while, so looking forward to more responses.

Got an interview this week, so wish me luck.


----------



## Trembling Hand

I do always love when a punter holds stocks and righteously refuses to acknowledge that they are doing exactly the same as a trader just over a longer period.


----------



## skc

gooner said:


> One of the best things about being unemployed is that I get lots of time to spend with my kids. Which is where I have been for the last four hours - up the park, playing on swings etc. And perfect weather for it as well - a beautiful, warm, Sydney day. And a very useful contribution to society in bringing my kids up to be responsible members of society.
> 
> Am somewhat surprised  at the amount of heat generated by my fairly innocuous (and to me obviously factual) post on the social value of day trading. I am unemployed, I have a share portfolio - these are facts. If I do nothing all day, but live on my dividends and capital growth, is that making a contribution to society? Sure I buy things and generate activity that way. But I do not make anything or service anything - I rely on others to do this. Given I am unemployed, I might expect to be called a bludger (although I am not on the dole), but I would be surprised if people said I made a great contribution to society by having a share portfolio. However, posters on this thread appear to think that if you are in my situation, but sit in front of a screen all day and make a few trades, then you suddenly make a great contribution to society.
> 
> Come on, seriously guys, if you want to make your money that way fine, but accept the reality that you are not making much of a contribution.  But hey probably better than marketing cigarettes and whisky.
> 
> Gooner has a thick skin - has to given Arsenal's failure to win anything for a while, so looking forward to more responses.
> 
> Got an interview this week, so wish me luck.




Contribution to society is such a subjective term your debate will go absolutely no where. 

A mobile phone call centre staff think he's contributing to society by enhancing and enabling communication, others think he's annoying people in their own homes.

A car designer may think he's contributing to society by producing more efficient means of transport, others think he's promoting even more personal lesiure travel and hence polluting the environment.

An accountant doing the books for a miner think he's contributing to society by enabling raw materials to be harvested, others think he's part of the system that leads to excess, consumerism, environmental degredation and inequality in developing countries.

Good luck trying to get consensus.


----------



## Cartman

gooner said:


> Am somewhat surprised  at the amount of heat generated by my fairly innocuous (and to me *obviously factual*) post on the social value of day trading.





lol ---- i thought the heat generated was fairly luke warm myself  --- 

regarding your *factual* observation  

so when i donate a  % of my income each year to charity, i'm not helping society?

when i pay tax each year that doesnt help society ?  

when i buy my stuffed olives etc at Woolies i'm not helping those young people stacking shelves and punching cash registers to earn some spare cash and gain job experience?

when i fill up my BMW with fuel (ok its a ford -- but it goes just as fast) that doesnt help either etc etc etc

95% of people dont work to 'help' society --- they work to earn money to look after their own 'society' 

no offence Gooner, but a successful trader is indirectly (maybe inadvertently) adding a lot more value to society than u seem to realise 

even an unsuccessful one who 'just' keeps himself off the dole is lowering the burden on the welfare system eh?

your view from a supposedly intelligent fella seems a little narrow minded


----------



## Trembling Hand

The value argument is a poor one. I don't think you are going to get a trader saying that they are more important than say, someone who cures cancer or discovers a life changing technology. 

But if you think a capitalist system can work without price discovery that a large group of traders provide you are kidding yourself. They are just as important as any 1 level on a food chain. Take out the plankton and the whales starve to death.


----------



## moXJO

Anyone employed adds to society through taxes I would have thought. When has 'adding to society' been the prime motivation(if any) for getting a job?
It's an odd thing to bring out.


----------



## tech/a

moXJO said:


> Anyone employed adds to society through taxes I would have thought. When has 'adding to society' been the prime motivation(if any) for getting a job?
> It's an odd thing to bring out.




Not really.
Its a reason.You and I value it as a poor reason.
My personal view is that its an excuse.
The REAL reason has not been put forward.
Only the poster knows this.

I liken it to selling a larger item.
Often you'll get all sorts of "excuses" why they won't purchase and a larger majority of the time the buyer will not tell you the REASON.
For example---I cant afford it (Real reason) as opposed to Your too expensive (excuse).


----------



## Surfer35

After stopping for a quick bite to eat at a McDonalds on the F3 on Saturday and seeing the type of society we have become (American mall society writ small), I'll withhold my contribution.


----------



## gooner

Cartman said:


> so when i donate a  % of my income each year to charity, i'm not helping society?
> 
> when i pay tax each year that doesnt help society ?
> 
> when i buy my stuffed olives etc at Woolies i'm not helping those young people stacking shelves and punching cash registers to earn some spare cash and gain job experience?
> 
> when i fill up my BMW with fuel (ok its a ford -- but it goes just as fast) that doesnt help either etc etc etc
> 
> 95% of people dont work to 'help' society --- they work to earn money to look after their own 'society'
> 
> no offence Gooner, but a successful trader is indirectly (maybe inadvertently) adding a lot more value to society than u seem to realise
> 
> even an unsuccessful one who 'just' keeps himself off the dole is lowering the burden on the welfare system eh?
> 
> your view from a supposedly intelligent fella seems a little narrow minded




Cartman - not disagreeing with you on the expenditure side - this keeps the wheels moving. It is more an argument that the actual act of trading does not add value, or negligible value to society compared to most other jobs. Sure there is minor price discovery (see below) but apart from that there are not goods produced, or services provided.  A garbo keeps the streets clean, a call centre worker fixed your mobile phone problem, a bank clerk gives you cash, a doctor heals you, an architect designs building, a trader............

However, if someone is good at trading and can earn good money doing it, then I can see why that person would choose to do it. They are looking after there family. And whilst values are always subjective, IMHO it is above marketing cigarettes or running a casino in the values stakes.



Trembling Hand said:


> The value argument is a poor one. I don't think you are going to get a trader saying that they are more important than say, someone who cures cancer or discovers a life changing technology.
> 
> But if you think a capitalist system can work without price discovery that a large group of traders provide you are kidding yourself. They are just as important as any 1 level on a food chain. Take out the plankton and the whales starve to death.




OK price discovery is important. There are hundreds of institutional traders and hedge funds moving billions around the market. Playing around with a few hundred k of equities really does not add much additional price discovery IMHO.



tech/a said:


> Not really.
> Its a reason.You and I value it as a poor reason.
> My personal view is that its an excuse.
> The REAL reason has not been put forward.
> Only the poster knows this.
> 
> I liken it to selling a larger item.
> Often you'll get all sorts of "excuses" why they won't purchase and a larger majority of the time the buyer will not tell you the REASON.
> For example---I cant afford it (Real reason) as opposed to Your too expensive (excuse).




tech/a - my key motivation for getting a job is to earn money. However, I like to feel that I am also contributing something via my job - however for me, this is a secondary consideration to earning money to support my family.


----------



## Timmy

Here is my contribution for today, just for you Surfer ...




Surfer35 said:


> After stopping for a quick bite to eat at a McDonalds on the F3 on Saturday and seeing the type of society we have become (American mall society writ small), I'll withhold my contribution.




The McDonalds on the F3 has an unusual distinction:
See this link

and this one.

Enjoy!


----------



## Surfer35

Thanks Timmy!

LOL

I am somewhat surprised given that I would have thought any rat game enough to hang around might have been on the menu should the hamburgers ever run out. Looks like most of the people there would eat anything not bolted down.


----------



## Trembling Hand

gooner said:


> OK price discovery is important. There are hundreds of institutional traders and hedge funds moving billions around the market. Playing around with a few hundred k of equities really does not add much additional price discovery IMHO.




Who said a good day trader plays around with a few K 

Its was not that uncommon for me to do 1 or 2 % of the aussie futs when I got going. And I know that most of the locals do far far more than me. They are day traders.

You clearly haven't a clue what a day trader actually does.


----------



## Timmy

Surfer35 said:


> Looks like most of the people there would eat anything not bolted down.




LOL - been there plenty of times myself, rats or not.  And you're right about the need to have stuff bolted down.


----------



## Trembling Hand

gooner said:


> Playing around with a few hundred k of equities really does not add much additional price discovery IMHO.




Really on second read this just sums it up. Gooner you really are clueless, Absolutely clueless. And i guess thats where miss understanding comes from.

Day Traders provide I would guess looking at the lack of change in open interest of futures and number of trades over 50% of the volume.


----------



## gooner

Trembling Hand said:


> Who said a good day trader plays around with a few K
> 
> Its was not that uncommon for me to do 1 or 2 % of the aussie futs when I got going. And I know that most of the locals do far far more than me. They are day traders.
> 
> You clearly haven't a clue what a day trader actually does.




Trembling Hand.

If you are doing 1 or 2% of the turnover of the "aussie futs" (what is that - the whole exchange, AUD currency futures, interest rates), then you are obviously operating towards the top end and providing a reasonable amount of price discovery. However, you only have to read posts on this and other forums to know that lots of day traders (most) are not.

And I said a "few hundred k" not "a few k"


----------



## Mr J

nomore4s said:


> Really?




Those quotes were just me having a bit of fun.



> The point I'm making is there is always a difference between theory and practical application. Theory is important as a starting point but it is the practical application that actually makes the money.




I admit if I'm guilty of something, it's drawing conclusions based on limited experience. I say trading is easy, I am confident I'll do well etc, but it is truthful for me. I can see how some would only expect these from someone with a lot more experience, but I'm just being truthful. I do find trading easy. 

In poker or sportsbetting, it was always far easier to to judge skill based on the actions rather than a sample of results. Results weren't all that important, because we know that over time, skill will likely achieve good results. My confidence comes from the trust in the theory of my trading strategy, and from the analysis of my actions rather than results. When I make trades, I'm placing them when the probabilities are in my favour. I can see whether or not I'm getting a good price, and how things play out compared to the way I expected. I know my trades have an edge, and I know I can apply that edge over time. I know I seem a bit too sure of myself for a novice, but it's just how I'm used to analysing skill - actions rather than results.



> 50k to 100k in 12 months in theory is achievable and might even sound like "a walk in the park" but in reality it is not so easy and very few traders can actually do it and even less can do it consistently. Maybe you are one of these traders but neither of us know that yet.




I have no idea how many traders can achieve this. I just know that even a small edge applied over good daily volume will see seemingly unbelievable results. I was regularly involved in this sort of discussion in sportsbetting. Most people just couldn't believe the possible returns, but they also had no idea that one could be making 30+ bets to achieve that return. A good example is TH's Nothing to Something thread. I know that is exceptional, but even with a far smaller edge and far lesser volume, it would achieve a very strong return.



> what I'm calling you out on is how you bang on about how easy it is and how this & that is possible but you haven't actually done any of it yet. I think you'll find the practical application of some of these claims will be a bit harder then you think.




Sure, and it's logical that you're skeptical. I may not have done it, but I'm doing it. While I may have a small sample of results, past experience tells me that I almost certainly have an edge, and that any conservative estimates with a small edge are triple figure returns. It's just maths. A 400% return wouldn't make me a great trader, it would make me one who took a small edge and applied it to a large number of trades. Quantity alone can achieve. I don't think I'm a good trader, just a trader with a small edge that knows how to apply it. I think most people could probably be taught to do what I do reasonably quickly. Unlike what TH does, it's not rocket science .


----------



## MRC & Co

You say a sports star adds value, but not a day trader?

I would argue, TH has provided as much excitement, inspiration, hope and belief to a large number of people (obviously not on the same scale of distribution as a mainstream sports star), but to me, that is adding a LOT more value to society than a regular day job generating a measly % of GDP.

These emotions are more important than a tiny bit more tangible consumption.  

Some find the markets spectacularly fascinating, and for them to be able to live out this fantasy, or live that fantasy, could be a life-long accomplishment, a whole lot more fulfilling than a regular job and perhaps the difference between a 'complete' life and a life of regrets and boredom (let's not pretend everybody loves their job).  

Now, we do need the monkeys to do the regular jobs, but society also needs a huge element of fantasy, the backbone of childhood and something that should not end with adulthood.


----------



## Krusty the Klown

gooner said:


> Am somewhat surprised  at the amount of heat generated by my fairly innocuous (and to me obviously factual) post on the social value of day trading.




It could be worse - you could have said you were a financial planner!!!!!:


----------



## skc

gooner said:


> Trembling Hand.
> 
> If you are doing 1 or 2% of the turnover of the "aussie futs" (what is that - the whole exchange, AUD currency futures, interest rates), then you are obviously operating towards the top end and providing a reasonable amount of price discovery. However, you only have to read posts on this and other forums to know that lots of day traders (most) are not.
> 
> And I said a "few hundred k" not "a few k"




So volume determines contribution?

So a factory worker who is but a small part of the whole system, that he can be replaced or fired without affecting the production does not contribute to the society?


----------



## beerwm

Trembling Hand said:


> You don't trade do you?




I can see this discussion is getting to you TH, but are the put-downs regarding other's trading ability necessary.



freddy2 said:


> Many people seem to think insurance is a bad bet because the insurer makes a profit but actually both parties usually benefit.




This doesnt make sense,
- if my home insurance cost $1000
- and my house burnt and i receieved $100,000
:. the insurance company is -$99,000 ... they have lost.
:. if my house doesnt blow up, im -$1,000 worse off.
-how can both parties benefit?

if you are looking at whether insurance "adds value" to society, i cant see how it does?



Trembling Hand said:


> The value argument is a poor one. I don't think you are going to get a trader saying that they are more important than say, someone who cures cancer or discovers a life changing technology.
> 
> But if you think a capitalist system can work without price discovery that a large group of traders provide you are kidding yourself. They are just as important as any 1 level on a food chain. Take out the plankton and the whales starve to death.




im open to being challenged on this debate, I dont care if im wrong.

but i cant see how if you have 

Oil CompanyA/B/C selling oil. and Qantas/British Airways/Virgin buying it.

you need a middleman to create value.
-now if the middlmen increases the production/sale of oil. that adds value.


----------



## Trembling Hand

beerwm said:


> I can see this discussion is getting to you TH, but are the put-downs regarding other's trading ability necessary.






Its not a put down its a legit question. From your answers it makes me think you don't know why prices move.

Illiquid markets are very erratic.


----------



## Mr J

beerwm said:


> This doesnt make sense,
> - if my home insurance cost $1000
> - and my house burnt and i receieved $100,000
> :. the insurance company is -$99,000 ... they have lost.
> :. if my house doesnt blow up, im -$1,000 worse off.
> -how can both parties benefit?




Insurance provides a hedge against what would otherwise be a catastrophic loss. It's not a good bet by itself, but is for most when risk management is considered.

As far as Gooner's comments go, much of society is service-based, in services that we could do without. If you really want to contribute, do medical science or something.


----------



## Trembling Hand

beerwm said:


> This doesnt make sense,
> - if my home insurance cost $1000
> - and my house burnt and i receieved $100,000
> :. the insurance company is -$99,000 ... they have lost.
> :. if my house doesnt blow up, im -$1,000 worse off.
> -how can both parties benefit?
> 
> if you are looking at whether insurance "adds value" to society, i cant see how it does?



Mate sorry to attack you but here goes,

You sure you cannot see the value for both parties here?? I'm sure you don't think that an insurance company has 1 customer or that all their customers houses burn down  surely you can see why an insurance company issues the insurance. 



beerwm said:


> I cant see how if you have
> 
> Oil CompanyA/B/C selling oil. and Qantas/British Airways/Virgin buying it.
> 
> you need a middleman to create value.
> -now if the middlemen increases the production/sale of oil. that adds value.



 Your definition of value is too limited.


----------



## MRC & Co

beerwm said:


> im open to being challenged on this debate, I dont care if im wrong.
> 
> but i cant see how if you have
> 
> Oil CompanyA/B/C selling oil. and Qantas/British Airways/Virgin buying it.
> 
> you need a middleman to create value.
> -now if the middlmen increases the production/sale of oil. that adds value.




You have been challenged and you are wrong.

Without speculation, i.e. traders (most done through funds and proprietary trading), you will not have a free market.  You cannot always guarantee a buyer and a seller argeeing at a given point in time at a specific price, which will cause market shocks, inability to budget for given costs and hence no way to forecast profit.  At the same time, you will get great companies going bust and many others that do not begin in the first place due to unknown risk. 

There is a reason there are locals in markets, nearly all day traders.  

Of course, speculation can go over the top at times, but to say it does not add a large amount of value, makes you completely wrong.


----------



## skyQuake

beerwm said:


> This doesnt make sense,
> - if my home insurance cost $1000
> - and my house burnt and i receieved $100,000
> :. the insurance company is -$99,000 ... they have lost.
> :. if my house doesnt blow up, im -$1,000 worse off.
> -how can both parties benefit?
> 
> if you are looking at whether insurance "adds value" to society, i cant see how it does?




The relative utility of money as mentioned a few posts above. The insurer loses maybe 0.1% of their fund pool when they pay you out. They are relatively not that much worse off. 
When you pay the $1000 prem, assume $500k avg family networth, you are 0.2% worse off... Not a crippling blow. But losing your home + contents, you're significantly worse off as its such a large hit. Insurance merely tries to set things even.




> Oil CompanyA/B/C selling oil. and Qantas/British Airways/Virgin buying it.
> 
> you need a middleman to create value.
> -now if the middlmen increases the production/sale of oil. that adds value.




Speculators also help match durations. If airliner ABC wants to hedge oil for the next 5 years would the oilers do it? Probably not. A speculator will. Speculators actually create stability and smooth out things :O
If an oil company dumps futures onto the market cause it needs $ and airliners won't buy, the markets get screwed.
Globalization also allows efficient arbitrage and price discover -> which in turn leads to competitive advantages of countries being brought to bear.


----------



## Trembling Hand

Just on that thing about middlemen. Have a look at the mess each year with iron ore price fight/negotiation without a transparent market.


----------



## beerwm

Trembling Hand said:


> Mate sorry to attack you but here goes,
> 
> You sure you cannot see the value for both parties here?? I'm sure you don't think that an insurance company has 1 customer or that all their customers houses burn down  surely you can see why an insurance company issues the insurance.
> 
> Your difination of value is too limited.




ok,ok

the way i see it,

an insurance company collects
$1.1 million in fees.
pays
$1 million in claims

0.1 million risk premium

society has paid 1.1million and recieved 1million.
0.1 million is paid for doing this service.

apple grower
buys $1million of trees, labour
sells $2million of apples

value created = $1million


----------



## tech/a

I reckon most day traders are simply gambling.
Few directly add anything.


----------



## motorway

There are plenty of historic example

they revolve around shortages

Speculators cause prices to rise above the current barriers of supply
such that reward and risk get back into balance

speculators price tomorrow's price today
Such that is does not have to be ..

example

Blockade during WAR
Speculators cause prices to rise so high
That some will run the blockade ( Food, FUEL, ARMS etc )

However governments often ban speculation and hoarding
and no rewards means no one prepared to run risks
of the supply barriers
HENCE severe shortages even starvation


Same principles with less extreme examples
Speculators make what might well be  tomorrow's price happen today such that endeavours arise that mean it does NOT, have to come to pass.

( OIL at $150 )

PRICE is INFORMATION
Speculators price tomorrow
So it does not have to happen in a bad way

motorway


----------



## MRC & Co

tech/a said:


> I reckon most day traders are simply gambling.
> Few directly add anything.




ha ha, sneaky.


----------



## awg

beerwm said:


> ok,ok
> 
> the way i see it,
> 
> an insurance company collects
> $1.1 million in fees.
> pays
> $1 million in claims
> 
> 0.1 million risk premium
> 
> society has paid 1.1million and recieved 1million.
> 0.1 million is paid for doing this service.
> 
> apple grower
> buys $1million of trees, labour
> sells $2million of apples
> 
> value created = $1million




OR

Warren Buffet buys Insurance company

uses cash flow to buy other solid companies, creating goods and jobs


Apple farmer spends $1 million on crop

hail and fireblight ruin his harvest

value destroyed


----------



## wayneL

tech/a said:


> I reckon most xxx traders are simply gambling.
> Few directly add anything.




Corrected for accuracy.


----------



## Trembling Hand

tech/a said:


> I reckon most day traders are simply gambling.
> Few directly add anything.




No not true. They pay for my holidays.


----------



## Nick Radge

I can't see the point of the argument. I have been a foster parent for 10-years as well as raising my own kids. I can assure you that there is plenty of scum walking the streets, not only abusing children but abusing any part of society they can get away with. Just in my local area there are 65 kids a month needing a home. 

I think the least of societies issues are what constituents the value-add that traders offer.


----------



## tech/a

wayneL said:


> Corrected for accuracy.




Yes quite correct--apologies for the glaring error!



Trembling Hand said:


> No not true. They pay for my holidays.




Yes of course and everything else.
Good to see you have a positive expectancy .


----------



## gooner

MRC & Co said:


> You have been challenged and you are wrong.
> 
> Without speculation, i.e. traders (most done through funds and proprietary trading), you will not have a free market.  You cannot always guarantee a buyer and a seller argeeing at a given point in time at a specific price, which will cause market shocks, inability to budget for given costs and hence no way to forecast profit.  At the same time, you will get great companies going bust and many others that do not begin in the first place due to unknown risk.
> 
> There is a reason there are locals in markets, nearly all day traders.
> 
> Of course, speculation can go over the top at times, but to say it does not add a large amount of value, makes you completely wrong.




I disagree with the need for traders, if defined as speculators.

If you look at the foreign exchange market for Australia (something I know about, having run the accounting function for one of the majors), the major banks act as intermediaries. There are exporters wanting to sell foreign currencies and buy Aussie and there are importers wanting to buy foreign currency and sell Aussie - this can be spot and/or forward. The reality is that the exporter, say BHP, does not want to trade currencies with the importer, say Harvey Norman. There are credit issues, tenor differences and  volume differences. The major banks by acting as intermediaries resolve all these issues. The majors employ traders to manage the positions created by all these deals. However, the reality is that although there is a large volume of deals, the net position run is always relatively small to avoid major losses to the bank (note by small, I mean that daily VAR for the whole trading floor might be $20m). The bank makes money by putting a margin on the exporter deal and the importer deal (known as sales or enhancement income). The bank also receives speculative/hedging flows from other banks and hedge funds which it manages as part of its overall position. Thus, there is no need for the majors to run significant FX risk to make money due to margins earnt on the deals. However, most majors recognise that seeing all the daily flows gives them a competitive advantage and thus the ability to make trading income as well as sales income.

So yes intermediaries are important, but speculators, I don't think so


----------



## wayneL

Nick Radge said:


> I can't see the point of the argument.



Agree :sleeping:

It's getting just tedious now.

Over and out.


----------



## sidious

*Re: Do you have to daytrade to trade fulltime?*



waz said:


> My end goal is to be a full time day trader. I much prefer to be my own boss and its something I truely enjoy doing.
> However before I can do this, I need enough capital to invest.
> 
> For the first 4 months this year, daytrading was my only source of income. (I was making upto 60 trades per day, mostly scalping and looking for pairs opportunities).
> I came up with the below pros and cons from my experience:
> 
> PRO:
> # You are your own boss
> # You decided how hard and how long you work, (I could have easily just traded the aussie200 from 4pm to 4:30 and made a living off that)
> # Its exciting
> # You can work from home
> # You can work from anywhere in the world
> # You dont have to waste 10 hours a week travelling to and from work, (saving time and money).
> # You learn a lot
> # Its an interesting way to make a living
> # Beneficial tax situation
> # Uncapped earnings potential
> 
> CONS:
> # You need a lot of capital to invest in the first place
> # Its scarry and wreaks havoc on your emotional state
> # You pretty much need to work and be in contact with your computer from 8am monday morn till 8am sat morn non stop. This was the worst part, I was struggling to sleep, staying awake for the first 30 mins of the US market, going to sleep for a few hours then waking for the last 30mins of the US market.
> # You screwed if your internet connection goes down
> # If you dont have enough capital you may get into cash flow problems, when your money is held in a trade which you dont want to exit just yet.
> # People just assume your really unemployed and your gambling your money
> # You can turn into a bit of a social recluse (your friends are people on forums that you have never met).
> # Getting a loan is impossible
> 
> 
> That being said, I still want to be a full time trader, at the moment I work in the IT industry as a contractor which gives me regular weekly income.
> I will continue doing this for at least 3 years and trade part time, once I have enough capital, Im guessing I will need about 200k. 100k for weekly expenses for a year and backup funds, and 100k to trade with. Ive found the more money you have the less likely you are to take risky trades.




Good post!
More or less, we have the same plan. I have a full time job but I am also trading on the side. Sometimes day trading and sometimes weeks. I officially started trading / investing this year. Some days good and most days bad. But I am learning. BTW all my trades are long positions (similar to my investment portfolio) because I do not know how to short sell. Do I do  it in POWER ETRADE? So much to learn... I'll appreciate if someone would answer that. Thanks.

I'm currently saving income. 

What I've learned so far is to maximise profits there should be diversification in trades as well. Some for weekly, monthly trades and some for day trades. Sometimes there are market actions that you just want to get into. To name a few: BTA, ESI, BCI, LNC, NEU, etc.... Off course, there is risk here. However, there is risk here and there are days when you have to face your losses with courage.


----------



## tech/a

> What I've learned so far is to maximise profits there should be diversification in trades as well.




Found the exact opposite.


----------



## MRC & Co

Gooner, the forex market is completely different to other markets but I can't be bothered getting into the debate.  

As to the original question, I would say you could day trade a lot easier with a small capital base as opposed to trying to swing or position trade (due to both leverage and tighter stops), but like everything, a lot comes down to luck and the market environment you hit.


----------



## Bobby

wayneL said:


> Agree :sleeping:
> 
> It's getting just tedious now.
> 
> Over and out.




Nice one  Wayne


----------



## Julia

Mr J said:


> I do find trading easy.



I keep reading this from you.   But yet you say you haven't actually done it yet.  Which is it?







> I may not have done it, but I'm doing it.



Huh? 



beerwm said:


> This doesnt make sense,
> - if my home insurance cost $1000
> - and my house burnt and i receieved $100,000
> :. the insurance company is -$99,000 ... they have lost.
> :. if my house doesnt blow up, im -$1,000 worse off.
> -how can both parties benefit?
> 
> if you are looking at whether insurance "adds value" to society, i cant see how it does?



You can't be serious in quoting the above as an example of your assertion that insurance doesn't add value to society!
You can't make any assessment on the basis of one contract.









beerwm said:


> ok,ok
> 
> the way i see it,
> 
> an insurance company collects
> $1.1 million in fees.
> pays
> $1 million in claims
> 
> 0.1 million risk premium
> 
> society has paid 1.1million and recieved 1million.
> 0.1 million is paid for doing this service.
> 
> apple grower
> buys $1million of trees, labour
> sells $2million of apples
> 
> value created = $1million



Are you just making up whatever figures come into your head?


----------



## beerwm

Julia said:


> I keep reading this from you.   But yet you say you haven't actually done it yet.  Which is it?
> 
> 
> 
> 
> 
> 
> Huh?
> 
> 
> You can't be serious in quoting the above as an example of your assertion that insurance doesn't add value to society!
> You can't make any assessment on the basis of one contract.
> 
> 
> 
> 
> 
> 
> 
> 
> Are you just making up whatever figures come into your head?




the figures arent important, just the concept;

the definition of value has not been defined well enough anyway; but i think we've all moved on.

lets get back to flaming Mr J :

haha, nothing wrong with a controversial thread


----------



## skc

Mr J said:


> I do find trading easy.




J, I believe what you meant to say is trading is simple. You find an edge, get enough volume and the maths will show indisputably that you are able to generate pretty good returns.

But simple does not equal easy. Running a marathron is simple, but it's not easy. I have never done a marathron in my life, but as I see it, if I train enough, wear the right shoes, have the right hydration strategy (as gatorade says) etc, it will be like a _walk in the park_.

What reactions do  you expect from those who's done it?

You end up engaging in a debate that is pointless. Because your argument is that "If I am good I can make great returns..."

No one can dispute the conclusion (make great returns) given the premise (if you are good), at the same time no one can really dispute the premise, since people can't prove / disprove how good you are. All people can do is judge base on probability - and probability says you are more likely to not achieve the returns you described.

For what it's worth, I believe most of your posts are quite informed and intelligent and I don't doubt your potential to be successful. But at this stage the only way to presuade the crowd is to actaullyy do it. Good luck.


----------



## nunthewiser

skc said:


> J
> For what it's worth, I believe most of your posts are quite informed and intelligent and I don't doubt your potential to be successful. But at this stage the only way to presuade the crowd is to actaullyy do it. Good luck.




amen

have chatted to mr j a few times in the livechat and have no doubt he has what it takes to become a profitable trader , and by the looks of his posts he seems to think so too 

will be intresting to see how this story turns out after a year tho 

words are cheap, results tell the tale


----------



## Mr J

> I keep reading this from you. But yet you say you haven't actually done it yet. Which is it?




To have done it requires completion. To be doing it simply requires for me to be in the process.



> lets get back to flaming Mr J




Take your best shot . 



			
				skc said:
			
		

> J, I believe what you meant to say is trading is simple. You find an edge, get enough volume and the maths will show indisputably that you are able to generate pretty good returns.
> 
> But simple does not equal easy. Running a marathron is simple, but it's not easy. I have never done a marathron in my life, but as I see it, if I train enough, wear the right shoes, have the right hydration strategy (as gatorade says) etc, it will be like a walk in the park.




This is an excellent point, but I find it both simple and easy. I don't find it easy just because I can do it, I find it easy because it requires little from me. A marathon is tough because it requires one to push themselves. I am not pushed with trading. It's like driving a car. I know suggesting that it is a walk in the park is controversial at best, but to be fair that was when comparing starting with 50k to starting with 10-20k.



> What reactions do you expect from those who's done it?




I wasn't thinking about the reactions. However, since someone did react I've taken the time to post in detail to address those reactions.



> You end up engaging in a debate that is pointless. Because your argument is that "If I am good I can make great returns..."




No, my argument is that if I have an edge I can achieve great returns. I don't have to be good, and I certainly don't consider myself to be good.



> But at this stage the only way to presuade the crowd is to actaullyy do it.




This conversation really only continued because I like to study the way people think, so I tend to make points and raise questions that suit that purpose. I have no need to prove myself here. In case anyone wants to challenge that last sentence, the 10-50k challenge suggestion was for personal gain, not to prove performance. I just don't think I'd get the odds that would make the challenge attractive.

*I think the cards are on the table, so the discussion has probably run its course.*


----------



## >Apocalypto<

Mr J said:


> To have done it requires completion. To be doing it simply requires for me to be in the process.
> 
> 
> 
> Take your best shot .
> 
> 
> 
> This is an excellent point, but I find it both simple and easy. I don't find it easy just because I can do it, I find it easy because it requires little from me. A marathon is tough because it requires one to push themselves. I am not pushed with trading. It's like driving a car. I know suggesting that it is a walk in the park is controversial at best, but to be fair that was when comparing starting with 50k to starting with 10-20k.
> 
> 
> 
> I wasn't thinking about the reactions. However, since someone did react I've taken the time to post in detail to address those reactions.
> 
> 
> 
> No, my argument is that if I have an edge I can achieve great returns. I don't have to be good, and I certainly don't consider myself to be good.
> 
> 
> 
> This conversation really only continued because I like to study the way people think, so I tend to make points and raise questions that suit that purpose. I have no need to prove myself here. In case anyone wants to challenge that last sentence, the 10-50k challenge suggestion was for personal gain, not to prove performance. I just don't think I'd get the odds that would make the challenge attractive.
> 
> *I think the cards are on the table, so the discussion has probably run its course.*




don't worry J 

the only way to learn is to ask............


----------



## Bobby

MR J , your going to do OK , remember those who bagged you when it happens ,  traders will congratulate you .   

 Milk the MMs feed


----------



## nomore4s

Bobby said:


> MR J , your going to do OK , remember those who bagged you when it happens ,  traders will congratulate you .
> 
> Milk the MMs feed




To be fair I don't think anyone has bagged Mr J out. No one has said he can't do it or that he won't do it.

He has been questioned over some of his statements which I think is fair enough, if you want to make claims on a public forum you have to expect to be questioned about them.


----------



## Trembling Hand

nomore4s said:


> To be fair I don't think anyone has bagged Mr J out. No one has said he can't do it or that he won't do it.
> 
> He has been questioned over some of his statements which I think is fair enough, if you want to make claims on a public forum you have to expect to be questioned about them.




Unless you are a Gannist 

So Nomore now this thread exploded with the usual :topic nonsense D) have you come to any conclusions about  do you have to day trade to trade full time?

EDIT: And will you be able to live with yourself being a parasite to society?


----------



## nomore4s

Trembling Hand said:


> Unless you are a Gannist
> 
> So Nomore now this thread exploded with the usual :topic nonsense D) have you come to any conclusions about  do you have to day trade to trade full time?
> 
> EDIT: And will you be able to live with yourself being a parasite to society?




lol, due to my now new moral beliefs thanks to gooner enlightening me I have decided not to daytrade due to it adding nothing to society. I will instead open a brothel as it provides an essential service so I can contribute to society in a meaningful way.:

I don't think you need to daytrade to trade full time but you do probably need a bigger capital base. I don't have the time to daytrade now due to business commitments and when I do look to go to trading fulltime I want to do it in a more semi retirement way with various passive income streams, hence again not wanting to daytrade.

TBH my trading atm is nothing more then a hobby type activity with a hobby type income (compared to my 'normal' income) - although it earns nearly as much as my wifes income so it is probably more like a part time business then a hobby. All I'm doing atm is trying to accumulate along the lines of what FrankD and Nick Radge were talking about - all tax is paid out of my normal income and all profits are re-invested in the various portfolios.

I was just curious as to other peoples view on how essential daytrading is to pulling an income from trading, and there has been some good discussion about it - as well as some interesting off topic discussions


----------



## gooner

nomore4s said:


> lol, due to my now new moral beliefs thanks to gooner enlightening me I have decided not to daytrade due to it adding nothing to society.




nomore4s

Enlightenment is a wonderful thing. I did not realise the power of stock market chat forums. Perhaps I should ditch the accounting job and move into the enlightenment business - great value to society and might be a few dollars in it.


----------



## skyQuake

nomore4s said:


> lol, due to my now new moral beliefs thanks to gooner enlightening me I have decided not to daytrade due to it adding nothing to society. I will instead open a brothel as it provides an essential service so I can contribute to society in a meaningful way.:




LOL. Gee you're worth more than that apple farmer!

Any discounts for ASF members ?


----------



## Bobby

nomore4s said:


> To be fair I don't think anyone has bagged Mr J out. No one has said he can't do it or that he won't do it.
> 
> He has been questioned over some of his statements which I think is fair enough, if you want to make claims on a public forum you have to expect to be questioned about them.




The above is fine with me Nomore


----------



## AlterEgo

nomore4s said:


> I don't think you need to daytrade to trade full time but you do probably need a bigger capital base. I don't have the time to daytrade now due to business commitments and when I do look to go to trading fulltime I want to do it in a more semi retirement way with various passive income streams, hence again not wanting to daytrade.




That raises an interesting point. How does someone build up a large enough capital, and build up enough screen-time and skill to be able to trade full-time, when having limited time to devote to trading because of their full-time job? Seems to be a bit of a catch-22 situation to me.

How have others on here made that transition from part-time to full-time trader?


----------



## nomore4s

AlterEgo said:


> That raises an interesting point. How does someone build up a large enough capital, and build up enough screen-time and skill to be able to trade full-time, when having limited time to devote to trading because of their full-time job? Seems to be a bit of a catch-22 situation to me.
> 
> How have others on here made that transition from part-time to full-time trader?




This is a problem when starting most businesses imo. Getting enough capital together to get off the ground and then to continue to grow the business.

As far as getting enough experience and skill, you just need to practise, review, practice, review (isn't this how it goes TH?) when & where you can find the time to do it.


----------



## tech/a

A very good point.

If your going to buy into ANY business you'll need capital.
Trading is no different.

You either
(1) Find the capital in other areas and use Leverage (we do it when buying Investment properties.).
So with IB you get $400k for $100K down day trading and $200K if held over night.

(2) You wait till you have saved enough to do 1 or have enough from other investments or inheritance.

(3) You start small and build to it (Most attempting to do that).You however need either amazing consistency or the ability to hold in long trends in you direction.

(4) You dont trade full time as either you cant afford it or as is my case youd need to be damned good to have me sell my company!(I can and do have both).


----------



## wonderrman

Tech beat me to it but margin is the answer. Put down 50k and take out another 150k. w


----------



## AlterEgo

nomore4s said:


> As far as getting enough experience and skill, you just need to practise, review, practice, review (isn't this how it goes TH?) when & where you can find the time to do it.




Yes, but if you didn't have to go to work, you'd be able to get much more done and learn at a much faster rate. But on the other hand you can't give up work because you need the money. Kind of like doing a uni course full-time vs part-time.


----------



## nomore4s

AlterEgo said:


> Yes, but if you didn't have to go to work, you'd be able to get much more done and learn at a much faster rate. But on the other hand you can't give up work because you need the money. Kind of like doing a uni course full-time vs part-time.




Yep or working 2 jobs.


----------



## Mr J

nomore4s said:


> To be fair I don't think anyone has bagged Mr J out. No one has said he can't do it or that he won't do it.
> 
> He has been questioned over some of his statements which I think is fair enough, if you want to make claims on a public forum you have to expect to be questioned about them.




This is true, nothing has been personal. Really just comes to me suggesting that high returns are possible with a small edge and volume, and others suggesting that I shouldn't suggest that is possible unless I've done it myself, even though it is!  :



> Yes, but if you didn't have to go to work, you'd be able to get much more done and learn at a much faster rate. But on the other hand you can't give up work because you need the money. Kind of like doing a uni course full-time vs part-time.




It's not really a Catch-22 situation, it just means progress is slower. If I was working 9-5, I'd just have to trade the European session for a few hours rather than trading the Asian session for 6 hours. I'd also get software with playback to watch on the weekend. If one is willing to sacrifice personal time, I don't think progress will be that much slower.


----------



## acouch

if you have the right set up, you can get 300+ out of the market each day.. no sweat..
300 x 5 = 1500 per week..
with a 5 tic stop max..
so you could start trading the spi with 6k..
as you build so do the contracts..
but you have to do the time..

have fun 
ac 

ps and that is half the fun


----------



## IFocus

Nick Radge said:


> I can't see the point of the argument. I have been a foster parent for 10-years as well as raising my own kids. I can assure you that there is plenty of scum walking the streets, not only abusing children but abusing any part of society they can get away with. Just in my local area there are *65 kids a month needing a home.
> *
> I think the least of societies issues are what constituents the value-add that traders offer.




65 kids a month? strewth Nick I would have thought your part of the world have been better, shows what a sheltered life I lead.

Admire your and Trish's commitment to your community.


----------



## tech/a

> Admire your and Trish's commitment to your community.




65 kids a month now thats commitment!


----------



## chode84

> 65 kids a month now thats commitment!




I don't think they foster 65 kids a month, just that there are that many that need fostering.

But back to the thread, I agree with the point above about trading the european markets in the evening. I work full time but spend a couple of hours a night doing this.


----------



## nunthewiser

acouch said:


> if you have the right set up, you can get 300+ out of the market each day.. no sweat..
> 300 x 5 = 1500 per week..
> with a 5 tic stop max..
> so you could start trading the spi with 6k..
> as you build so do the contracts..
> but you have to do the time..
> 
> have fun
> ac
> 
> ps and that is half the fun




hi


i have no probs with tales of ppl starting small too lead too ppl that are not so small which grow too ppl that make a difference 

in this thread i have seen suggestions of outlandish leverage, foolproof plans, ingenious schemes where everyones a winner BUT not too many stories of the time, effort , hardship being stuck behind the 8 ball or just the personal cost of isolating yourself as the person that gunna be the one that takes the cash.

we live in a different world

i may be rambling but im sure some may relate


----------



## Paul Ellis

I think full time trading would make me too nervous - I like having a full time job which can replenish the bank balance after taking some hits on the market!

I can't help but think it would also drive me insane!  I need interaction with people


----------



## It's Snake Pliskin

Paul Ellis said:


> I think full time trading would make me too nervous - I like having a full time job which can replenish the bank balance after taking some hits on the market!
> 
> I can't help but think it would also drive me insane!  I need interaction with people



I can understand the interaction part. 

You make money as soon as you walk through the door.


----------



## Mr J

Paul Ellis said:


> I think full time trading would make me too nervous - I like having a full time job which can replenish the bank balance after taking some hits on the market!




View a hit in the market as similar to losing your job in a recession . We can all potentially take hits of some sort, and all can be quite devastating, financially and emotionally.


----------



## virago

Hi,

Its quite stressful day trading, swing trading is probably the best way to go, not huge capital required, averaging out weekly or monthly is quite sustainable.


----------



## impala_group

IMO you are either pimping the market ($$$) or you are getting pimped.
Honestly, it doesnt matter how you go about making your cash - just make it. 

Mix up the techniques and if you continously get good returns why not??


----------



## nulla nulla

Mr J said:


> This is true, nothing has been personal. Really just comes to me suggesting that high returns are possible with a small edge and volume, and others suggesting that I shouldn't suggest that is possible unless I've done it myself, even though it is!  :
> 
> 
> 
> It's not really a Catch-22 situation, it just means progress is slower. If I was working 9-5, I'd just have to trade the European session for a few hours rather than trading the Asian session for 6 hours. I'd also get software with playback to watch on the weekend. If one is willing to sacrifice personal time, I don't think progress will be that much slower.




Sounds a bit like studying the form guide and trying to pick winners at the horce races. One day you will realise the return, on your investment of time and money, is even less than you make at your day job.


----------



## Mr J

Care to explain how that sounds in anything like trying to pick winners at the track? I simply said a small edge over volume can yield a high return. Nothing unreasonable about that.


----------



## nulla nulla

It's not really a Catch-22 situation, it just means progress is slower. If I was working 9-5, I'd just have to trade the European session for a few hours rather than trading the Asian session for 6 hours. I'd also get software with playback to watch on the weekend. If one is willing to sacrifice personal time, I don't think progress will be that much slower.

and i repeat...."Sounds a bit like studying the form guide and trying to pick winners at the horse races. One day you will realise the return, on your investment of time and money, is even less than you make at your day job". 

Software playback to watch at the weekend?  sheeesh


----------



## OzTrader

Nulla Nulla,

Where do you get the playback software from?
What do you use?

Many thanks.


----------



## Mr J

OzTrader, that first paragraph of Nulla's is a quote. You can get playback from Amibroker.

Nulla, I see what you're saying, but whether it's "trying to pick winners at the track" really depends on the approach, not the time involved. A few hours each night may just be a waste of time, but so could 6-7 hours during the day. Trading is a waste of time for most people, so why even consider taking a shot? Because they want to, and if they're going to do so then it is sensible they give themselves the best chance possible. Spending a few hours a night is certainly better throwing darts, as there is at least potential.


----------



## OzTrader

Mr J,
Thanks, I'll check them out?
Do you know how much it costs for ASX and futures?
Sounds interesting.


----------



## Trembling Hand

OzTrader said:


> Mr J,
> Thanks, I'll check them out?
> Do you know how much it costs for ASX and futures?
> Sounds interesting.




If you are after daytrading setups Ninja trader is probaly as good as it gets.


----------



## OzTrader

Thanks TH
Do you know what it costs?


----------



## Trembling Hand

OzTrader said:


> Thanks TH
> Do you know what it costs?




Nothing if you are just simming except the cost of data you feed it from your data provider.


----------



## OzTrader

TH, Thanks again.
I must give it a go, especially if it don't cost?
hard to believe it don't cost, must be the first thing I've heard of in trading that don't cost.


----------



## Edwood

this may well have been posted before on ASF, apologies if it has but this looked as good a place as any for it

http://www.nasaa.org/content/Files/Day_Trading_Analysis.pdf


----------



## Trembling Hand

Edwood said:


> this may well have been posted before on ASF, apologies if it has but this looked as good a place as any for it
> 
> http://www.nasaa.org/content/Files/Day_Trading_Analysis.pdf




No surprise hey?



> Indeed, an analysis of all the trading conducted in all the accounts shows that the average losing
> trade was held twice as long (9.53 days), as the average winning trade (4.52 days). The average
> intraday trade was also a losing trade. *In short, these public short-term traders were cutting their
> profits short and letting their losses run*.



 Classic.


----------



## nulla nulla

Mr J said:


> OzTrader, that first paragraph of Nulla's is a quote. You can get playback from Amibroker.
> 
> Nulla, I see what you're saying, but whether it's "trying to pick winners at the track" really depends on the approach, not the time involved. A few hours each night may just be a waste of time, but so could 6-7 hours during the day. Trading is a waste of time for most people, so why even consider taking a shot? Because they want to, and if they're going to do so then it is sensible they give themselves the best chance possible. Spending a few hours a night is certainly better throwing darts, as there is at least potential.




The first part was definitely quoting a previous poster, I have never heard of "replays" of trading on the share market.

1. The "time involved" is the key to any degree of success. If you are not prepared to put the necessary time in, stick to your day job, otherwise you will lose;  
2. Read anything and everything you can get your hands on; 
3. Test the waters with small trades; 
4. Don't try to trade willy nilly across the spectrum of shares; 
5. Try to know as much as you can about 3-4 sectors; 
6. Choose your targets in those sectors; and 
7. Limit your efforts to those shares in your chosen sectors that have reasonable turnover (liquidity) and spread of movement in share price;
8. Be prepared to cut your losses when you make a mistake, so that you retain the greater part of your capital; and 
9. "take your profits". 

You will make mistakes, the key is to learn from your mistakes and try not to be emotionaly involved with your shares.


----------



## marknz88

nulla nulla said:


> The first part was definitely quoting a previous poster, I have never heard of "replays" of trading on the share market.




Possibly referring to NinjaTraders (or similar app's) ability to replay recorded market data and trade it on sim/review your trades...allows you to break down the trades and analyse them frame by frame after the market has closed rather than trying to do so while you are actually trading


----------



## nunthewiser

marknz88 said:


> Possibly referring to NinjaTraders (or similar app's) ability to replay recorded market data and trade it on sim/review your trades...allows you to break down the trades and analyse them frame by frame after the market has closed rather than trying to do so while you are actually trading





intresting.........

has this method helped anyone with there trading ?


sincere question

edit........... actually i keep notes so looking at the above its just another form of review 

as you were sorry for the interuption


----------



## Edwood

Trembling Hand said:


> No surprise hey?
> 
> Classic.




lots of potential flaws in the research but a warning nuntheless for wanabees - should be essential reading really but can't see the brokerages providing this alongside their t's & c's


----------



## nunthewiser

Edwood said:


> but a warning nuntheless for wanabees




i  resemble that comment


----------



## Trembling Hand

nunthewiser said:


> intresting.........
> 
> has this method helped anyone with there trading ?
> 
> 
> sincere question
> 
> edit........... actually i keep notes so looking at the above its just another form of review
> 
> as you were sorry for the interuption




Actually its a bit better than that. I use it alot. For the why the hell did I do that review . Also I'm in the process of sorting days. Most days fall into about 6 different plays. All very similar yet diff. Some times helps to replay to see whats what.


----------



## nunthewiser

thanks


----------



## shortlist

Edwood said:


> this may well have been posted before on ASF, apologies if it has but this looked as good a place as any for it
> 
> http://www.nasaa.org/content/Files/Day_Trading_Analysis.pdf





Interesting read. Shame it didn't go into why day-trading was less profitable than longer trades. Any ideas here? Maybe the immediacy of it all encourages impulsive decision-making, or the extra screen-time required was not appreciated. Or is it all just maths?


----------



## Trembling Hand

shortlist said:


> Interesting read. Shame it didn't go into why day-trading was less profitable than longer trades. Any ideas here? Maybe the immediacy of it all encourages impulsive decision-making, or the extra screen-time required was not appreciated. Or is it all just maths?




The reason is actually no different to why all others are also not profitable. Most people cannot trade. The problem with daytrading is that it just compresses their failure into a quicker time frame.

That is 300 trades in 2 months = blow up where a swing trader takes 1 year to do that. Same result though. :


----------



## Wysiwyg

shortlist said:


> Interesting read. Shame it didn't go into why day-trading was less profitable than longer trades. Any ideas here? Maybe the immediacy of it all encourages impulsive decision-making, or the extra screen-time required was not appreciated. Or is it all just maths?




Do you prefer roulette, blackjack or poker? It is all gambling. You bet on the price going your way from the buy in.


----------



## shortlist

Trembling Hand said:


> The reason is actually no different to why all others are also not profitable. Most people cannot trade. The problem with daytrading is that it just compresses their failure into a quicker time frame.
> 
> That is 300 trades in 2 months = blow up where a swing trader takes 1 year to do that. Same result though. :




That's as good explanation as I there is, I guess. I'm still "paper trading" on demo accounts with reasonable results, though I doubt the demo platforms bear much resemblance to the real thing (immediacy of trading for one thing). The interest for me is in the research and the hopefully successful execution of that research.


----------



## shortlist

Wysiwyg said:


> Do you prefer roulette, blackjack or poker? It is all gambling. You bet on the price going your way from the buy in.




I have no problem with the term gambling, and have gambled in the past, but the difference with the stock market is that you have many more variables to guide you to an educated decision, so if you lose your money most often it's lack of research or unsuccessful interpretation of data. If you lose your money on a lottery or a card game this is because 1) the outcomes are harder to predict and/or 2) there are fewer or no tangible factors contributing to the end result in cards or lotteries, as opposed to following the foreign policy of a country and making a forex decision based on a government press release.


----------



## Mr J

Trembling Hand said:


> The reason is actually no different to why all others are also not profitable. Most people cannot trade. The problem with daytrading is that it just compresses their failure into a quicker time frame.
> 
> That is 300 trades in 2 months = blow up where a swing trader takes 1 year to do that. Same result though. :




Yes, the main factors is lacking skill, but day trading is tougher than swing trading. Faster decisions, less precision, higher fees, higher exposure of letting one trade affect others etc.



			
				shortlist said:
			
		

> Shame it didn't go into why day-trading was less profitable than longer trades.




Don't read too much into it, it's not much of a study as the samples are insignificant. There is some value in it though, such as showing how most do not use sensible management, and that chance was a larger factor (that a single trade could account for the majority of winnings).

Not so long ago I would have said that day trading is certainly more profitable than swing trader or longer, if skill is equal. This would be due to much higher volume with day trading. Something I overlooked is the power of having money in play when we wouldn't otherwise be trading. Having money in play 24 hours a day goes a long way towards making up for lesser volume. I wouldn't be surprised if good swing traders outperformed most day traders.



> Or is it all just maths?




Everything is about maths.



			
				nulla nulla said:
			
		

> 1. The "time involved" is the key to any degree of success. If you are not prepared to put the necessary time in, stick to your day job, otherwise you will lose;




The necessary time yes, but that varies greatly. Some trading methods are time-intensive, some are not. It doesn't necessarily take a lot of time to trade, and I also don't think it necessarily takes a lot of time to learn how to trade decently.


----------



## James Austin

*Losing Accounts*

Eleven (11) of the seventeen (17) day trading accounts lost money. More importantly, all 11 accounts were traded in a manner that realized a Risk of Ruin of 100%. That is, 65% of these accounts would almost certainly
lose any and all funds put at risk in them.

*Winning Accounts*

Only six (6) of the seventeen (17) day trading accounts made a profit. Four of these six accounts realized a significant risk of ruin. Clearly, accounts that have over a 25% chance of ruin are not successfully traded accounts.

*Conclusions (Day Trading)*

*There was only one successful day trading account* in the 17 accounts analyzed. 

Fifteen of the 17 accounts analyzed had a significant risk (probability of ruin over 27.6%) of losing all funds. Eleven of these 17 accounts had a 100% chance of ruin. That is, 65% of these accounts would almost certainly lose any and all funds put at risk in them. Five of the six accounts, which realized net profits, were no more than marginally profitable and realized a large percentage of their profits from a single trade.


*a peak performance activity is day trading*


PS 
perhaps the above, signed by any who opens a trading account, would act as a reminder, a caution, to any aspiring day-trader . . . . or would it!?




Edwood said:


> this may well have been posted before on ASF, apologies if it has but this looked as good a place as any for it
> 
> http://www.nasaa.org/content/Files/Day_Trading_Analysis.pdf


----------



## James Austin

Mr J said:


> Don't read too much into it, it's not much of a study as the samples are insignificant. There is some value in it though, such as showing how most do not use sensible management, and that chance was a larger factor (that a single trade could account for the majority of winnings).





true, but still representative no doubt


----------



## Mr J

Only because we know that's roughly what to expect .



			
				shortlist said:
			
		

> I have no problem with the term gambling, and have gambled in the past, but the difference with the stock market is that you have many more variables to guide you to an educated decision, so if you lose your money most often it's lack of research or unsuccessful interpretation of data. If you lose your money on a lottery or a card game this is because 1) the outcomes are harder to predict and/or 2) there are fewer or no tangible factors contributing to the end result in cards or lotteries, as opposed to following the foreign policy of a country and making a forex decision based on a government press release.




Shortlist, 'gambling' means to wager on an event with an uncertain outcome. This literally includes trading and any other sort of investment, and can also be interpreted to mean any action with reward and risk (i.e. everything we do).

If we lose a lottery or card game, it isn't because the outcomes are harder to predict, in fact it's far simplier. We lose because of shorterm variance or negative expectation. If intelligent traders/investors took the same approach to a card game, they would be profitable there as well.


----------



## shortlist

Mr J said:


> Only because we know that's roughly what to expect .
> 
> 
> 
> Shortlist, 'gambling' means to wager on an event with an uncertain outcome. This literally includes trading and any other sort of investment, and can also be interpreted to mean any action with reward and risk (i.e. everything we do).
> 
> If we lose a lottery or card game, it isn't because the outcomes are harder to predict, in fact it's far simplier. We lose because of shorterm variance or negative expectation. If intelligent traders/investors took the same approach to a card game, they would be profitable there as well.




Sure, like I said I have no problem with the word gambling. I'm just trying to make a distinction between two different forms of gambling. If I hear a piece of news that I know will send the yen down agains the dollar, I can use that information to make a decision - a gamble perhaps. But I cannot think of an equivalent analogy in cards or lotteries other than for the croupier to tell me when the Ace is coming up.


----------



## Real1ty

shortlist said:


> Sure, like I said I have no problem with the word gambling. I'm just trying to make a distinction between two different forms of gambling. If I hear a piece of news that I know will send the yen down agains the dollar, I can use that information to make a decision - a gamble perhaps. But I cannot think of an equivalent analogy in cards or lotteries other than for the croupier to tell me when the Ace is coming up.




But what you think will send the Yen down is not always what happens.

You are not taking into account, in this hypothetical example, what is already built into the price. Obviously there is always a number that will move the market if it is good or bad enough but how often do you see news releases for the price to jump up and down before finding a direction?

How often do you see good news sold off?

Plenty.....


----------



## Mr J

They are the same, as for each we weigh up the risk, reward, and probability of success (if we're to be informed bettors). Like I said, everything is about maths, and 'gambling' is no different. Probabilities can be expoited to give a bettor a mathematical edge in almost any form of 'gambling'.

Lottery - possibly if the jackpot is high enough.
Cards - placing people on hand ranges, reading betting patterns, knowledge of hand strength against ranges etc.
Roulette - physics.
Blackjack - exploiting the variable distribution of cards (more high cards left in deck is good for the player).
Sportsbetting - too easy. Lines vary like the prices in the financial markets.

Interestingly, your example of using news is actually the least informed unless you can assign some rough probabilities to the outcomes (i.e. the chance it moves the way you want).


----------



## tech/a

Arguementum infinitum.

I cant understand the constant pondering.
Of course you can trade for a living without day trading and you don't have to scalp and you don't have to trade fut's.

You just need to know how to trade profitably.
Who cares if its one trade or 50 trades that make the $$s
Below is trades I am currently holding the oldest is a week old.
If you cant exist off of this sort of $$s then drop the mansion and live in a tent like the rest of us!

No I don't trade full time and I don't wish to.
No its not using $500k.


----------



## shortlist

Real1ty said:


> But what you think will send the Yen down is not always what happens.
> 
> You are not taking into account, in this hypothetical example, what is already built into the price. Obviously there is always a number that will move the market if it is good or bad enough but how often do you see news releases for the price to jump up and down before finding a direction?
> 
> How often do you see good news sold off?
> 
> Plenty.....




I'm not talking about just news though. I mean longer-term analysis of government policies on wide-ranging issues. There are certain theories that help us to understand the way governments wil or must act, if we assume they are rational actors (and we do assume that). We can use these theories to interpret the actions of a government and allow us to see what its next action will be. None of this gets in the news for weeks afterwards.


----------



## shortlist

tech/a said:


> Arguementum infinitum.
> 
> I cant understand the constant pondering.
> Of course you can trade for a living without day trading and you don't have to scalp and you don't have to trade fut's.
> 
> You just need to know how to trade profitably.
> Who cares if its one trade or 50 trades that make the $$s
> Below is trades I am currently holding the oldest is a week old.
> If you cant exist off of this sort of $$s then drop the mansion and live in a tent like the rest of us!
> 
> No I don't trade full time and I don't wish to.
> No its not using $500k.




It's reassuring to know you can trade for al iving without day or scalp trading. I don't want to do it for al iving because I want to talk to other human beings through my week! But you have made me more positive about it. 

Excuse newbieness, but why do you say that "not it's not using $500k" - should I be able to infer that from the chart? What kind of figures are you talking about? What's the 200,000? Looks scarily large to me. This is like kindergarten for me....


----------



## prawn_86

shortlist said:


> I'm not talking about just news though. I mean longer-term analysis of government policies on wide-ranging issues. There are certain theories that help us to understand the way governments wil or must act, if we *assume they are rational actors (and we do assume that*). We can use these theories to interpret the actions of a government and allow us to see what its next action will be. None of this gets in the news for weeks afterwards.




Bad assumption to make.

It looks to me as though you are confusing economics with the stock market. The stock market really doesnt care what the actions of the gov will be, unless it is a major fundamental shift. Even then it generally prices those things in before it happens.

The market is a leading indicator and more based on a collective group of opinions of what will happen, rather than what actually does happen. Hence why stocks are never 'fair' value all the time.


----------



## shortlist

prawn_86 said:


> Bad assumption to make.
> 
> It looks to me as though you are confusing economics with the stock market. The stock market really doesnt care what the actions of the gov will be, unless it is a major fundamental shift. Even then it generally prices those things in before it happens.
> 
> The market is a leading indicator and more based on a collective group of opinions of what will happen, rather than what actually does happen. Hence why stocks are never 'fair' value all the time.




The market can only be a leading indicator in things it knows about though. And while I agree that the stock market doesn't care about the government's actions, specific companies and other governments absolutely do care.


----------



## Real1ty

shortlist said:


> I'm not talking about just news though. I mean longer-term analysis of government policies on wide-ranging issues. There are certain theories that help us to understand the way governments wil or must act, if we assume they are rational actors (and we do assume that). We can use these theories to interpret the actions of a government and allow us to see what its next action will be. None of this gets in the news for weeks afterwards.




You were talking about news when you said this which is what i replied to.



shortlist said:


> Sure, like I said I have no problem with the word gambling. I'm just trying to make a distinction between two different forms of gambling. *If I hear a piece of news that I know will send the yen down agains the dollar, I can use that information to make a decision - a gamble perhaps*. But I cannot think of an equivalent analogy in cards or lotteries other than for the croupier to tell me when the Ace is coming up.




You were giving an example of why it isn't gambling and my reply to you was that it is to some extent as while you might think the news will send the Yen lower, in your example, you don't know how much of that news release was built into the price, hence the price may not perform how you expect it to.

Call it gambling, risk, what ever you want but markets don't always act like they are "supposed to", hence the "gamble"


----------



## Real1ty

shortlist said:


> The market can only be a leading indicator in things it knows about though.




How could the market know what will happen in the future?

They are expectations and they are either met or not.


----------



## tech/a

> Call it gambling, risk, what ever you want but markets don't always act like they are "supposed to", hence the "gamble"




Those that cant profit consistently from Trading call it "Gambling"
People think business is a gamble.
Those that run business's call it business.
If something doesn't act like its supposed to then get out of it.
If it does then stay in it.

If you think its a gamble then you shouldn't be trading (or attempting to).

The 200K is an 18K trade 200000@9.6c.
Not that scary.


----------



## shortlist

tech/a said:


> Those that cant profit consistently from Trading call it "Gambling"
> People think business is a gamble.
> Those that run business's call it business.
> If something doesn't act like its supposed to then get out of it.
> If it does then stay in it.
> 
> If you think its a gamble then you shouldn't be trading (or attempting to).
> 
> The 200K is an 18K trade 200000@9.6c.
> Not that scary.




Thanks tech/a. This is the point I was trying to make. I have no problem with the term gambling, but I was just trying to make the case that there is a difference between putting $500 on a deck of cards and studying a company or a government or a specific stock for months.


----------



## prawn_86

shortlist said:


> The market can only be a leading indicator in things it knows about though. And while I agree that the stock market doesn't care about the government's actions, specific companies and other governments absolutely do care.




Yeh i agree with Reality here. Unless you have specific inside information, which relates soley to one stock (which is illegal although it happens), then the market is going to have priced in its expectations. The saying "the market is always right" has come about for a reason, due to the fact that it is based on expectations being met or not, rather than news as such.

And even if you did have inside info about a gov decision it would have to be a huge change of law or something to specifically effect companies. Most co's have too much going on at the micro level to be worried about minor macro factors.

It appears you are going for the top down approach, but unless you are investing in entire sectors, you will still need to drill down into each individual company. Hence why i prefer the bottom up approach, find a company that is undervalued, then look at any macro factors that *may* effect it.

I guess what i am trying to say, is there is no possible way you can *know* a peice of news will effect the market, as some expectations of that news have already being priced in.


----------



## shortlist

prawn_86 said:


> Yeh i agree with Reality here. Unless you have specific inside information, which relates soley to one stock (which is illegal although it happens), then the market is going to have priced in its expectations. The saying "the market is always right" has come about for a reason, due to the fact that it is based on expectations being met or not, rather than news as such.
> 
> And even if you did have inside info about a gov decision it would have to be a huge change of law or something to specifically effect companies. Most co's have too much going on at the micro level to be worried about minor macro factors.
> 
> It appears you are going for the top down approach, but unless you are investing in entire sectors, you will still need to drill down into each individual company. Hence why i prefer the bottom up approach, find a company that is undervalued, then look at any macro factors that *may* effect it.
> 
> I guess what i am trying to say, is there is no possible way you can *know* a peice of news will effect the market, as some expectations of that news have already being priced in.





I don't think we really disagree here. I think we seem to have gone down a different track from what I was saying initially. First, I'm not talking about specific information about one stock, which is not something you could base a successful trading portfolio on anyway, and yes it is illegal and so it should be as well. By the way I like your top down/bottom down explanation. 

I am talking about inferring future events in a specific industry or exchange rate based on government actions that might not seem obvious to everyone at the time. You say the market prices events in - but based on what information? Where and when did that information come from? I suppose what I am talking about would only pay off over very, very long-term time frames though as government policies became obvious to the market.

But this is just an idea. I have also looked at scalping and swing trading but if I do this it would be in specific sectors I have studies for a long time, and I am not there yet by a long way. When I read some of the analysis on this site I realise I am just starting school so it's demo dollars for a long time!


----------



## shortlist

Talking of scalping and swing trading - again from a newbie perspective - I understand when you buy shares your share order has to be filled. OK, so how long does that take? If I buy $X shares at 11:30 and they happen to go nuts and rise by 0.5% by 11:43 (same time frame I used the other day....unimaginative, I know) and I hit sell - how long till they sell? How is scalping possible if it takes hours to fill a share order, or does it take seconds? I'm sure it always depends on market activity, but in anyone's experience here, what's a likely amount of time to wait for a share order to be filled? Is it dependent upon size of the order?

And with all these variables, how can a scalper possible run a consistent profit?

Thanks.........!

And to emphasise how new I am to all this, can anyone tell me how I can check if anyone has replied to my posts on the threads I write in? I'm doing it from memory at the moment.


----------



## tech/a

Seconds.
guys like T/H can run many trades in a minute.
Perhaps he will post a scatter diagram of a typical trading period.


----------



## prawn_86

Firstly let me say you are on the right track by thinking about and trialling different options. I have been doing this for 3 yrs and only now feel i am starting to get my head around it. By no means are any of my answers definitive or even close to it. 



shortlist said:


> I am talking about inferring future events in a specific industry or exchange rate based on government actions that might not seem obvious to everyone at the time. *You say the market prices events in - but based on what information? Where and when did that information come from?* I suppose what I am talking about would only pay off over very, very long-term time frames though as government policies became obvious to the market.




Answering the bit in bold: It is based on the market assumptions of what other people in the market think will happen. Nothing happens in secrecy, there are leaks etc, so market participants will have an idea of what is going on. EG any actual changes in law etc will be debated for a long time, not just changed instantly.

The problem with taking an ultra long term view based solely on news is that there are so many other variables effecting stocks. SUre one peice of news may have a long term positive effect, but in the short term stocks can go bust for other reasons. Look up the term 'survivorship bias'. In the end every company goes broke or gets taken over/sold off.



shortlist said:


> Talking of scalping and swing trading - again from a newbie perspective - I understand when you buy shares your share order has to be filled. OK, so how long does that take? If I buy $X shares at 11:30 and they happen to go nuts and rise by 0.5% by 11:43 (same time frame I used the other day....unimaginative, I know) and I hit sell - how long till they sell? How is scalping possible if it takes hours to fill a share order, or does it take seconds? I'm sure it always depends on market activity, but in anyone's experience here, what's a likely amount of time to wait for a share order to be filled? Is it dependent upon size of the order?
> 
> And with all these variables, how can a scalper possible run a consistent profit?
> 
> Thanks.........!
> 
> And to emphasise how new I am to all this, can anyone tell me how I can check if anyone has replied to my posts on the threads I write in? I'm doing it from memory at the moment.




Scalpers make money based on probabilites and patterns, more so than caring what the stock is. Its all about following somewhat predicatble 'herd' behaviour, and cutting their losses short when the odds go against them.

To subscribe to threads, up the top of each page click the 'thread tools' button then 'subscribe to thread'. This will then keep track of it it in your UserCP.


----------



## shortlist

prawn_86 said:


> Firstly let me say you are on the right track by thinking about and trialling different options. I have been doing this for 3 yrs and only now feel i am starting to get my head around it. By no means are any of my answers definitive or even close to it.
> 
> 
> 
> Answering the bit in bold: It is based on the market assumptions of what other people in the market think will happen. Nothing happens in secrecy, there are leaks etc, so market participants will have an idea of what is going on. EG any actual changes in law etc will be debated for a long time, not just changed instantly.
> 
> The problem with taking an ultra long term view based solely on news is that there are so many other variables effecting stocks. SUre one peice of news may have a long term positive effect, but in the short term stocks can go bust for other reasons. Look up the term 'survivorship bias'. In the end every company goes broke or gets taken over/sold off.
> 
> 
> 
> Scalpers make money based on probabilites and patterns, more so than caring what the stock is. Its all about following somewhat predicatble 'herd' behaviour, and cutting their losses short when the odds go against them.
> 
> To subscribe to threads, up the top of each page click the 'thread tools' button then 'subscribe to thread'. This will then keep track of it it in your UserCP.





Many thanks to tech/a and prawn_86 for all your help. Taking seconds to fill an order make sense now (thinking about scalping) as does the fact scalpers are simply looking for patterns and not caring about the stock. I did some scalping on a demo and it worked out reasonably well - only I presumed in  reality it would take much longer to buy and sell so it's reassuring this is not the case and orders usually get filled quite quickly. 

I found scalping fun, but I can see how it kind of precludes the implementation of lengthy studies of companies, etc. My plan is to start what I guess is the usual way - relatively stable blue chip equities, low risk, low profit, bought with my own money through a big online trader like Westpac. If things go well, I learn how the process works and my research/analysis pays off, I would "upgrade" to more sophisticated trades/investments over time.

Thanks again! + added this thread to subscriptions now.

I'll just add (in edit) to bring this thread back on subject, I can see the attraction of day trading, which if I am right is generally considered to be slightly longer-term than scalping. I think what intimidates newbies like me is keeping the shares overnight. This is the appeal of buying and selling before cocoa time.


----------



## Out Too Soon

I can't day trade as I have a slow satellite connection (backwards bloody country Oz)   but I still hope to make a living eventually.
  I have stuck on the border of my screen a goal  "goal = $100 day avg ie ~$3100/mth"
  At the moment I need more capital but I am half way there this month  trading between 3 days & 12 wks. this is the first good mth in many many mths tho 
  4 yrs of on & off practice, eventually I will get there. You want to know my secret?  I have set my goal & stuck it on the edge of my screen where I see it all the time


----------



## Mr J

tech/a said:


> Seconds.
> guys like T/H can run many trades in a minute.
> Perhaps he will post a scatter diagram of a typical trading period.




In his "Nothing to Something" thread, he averaged a trade every 30 seconds. Quite amazing, considering the spread.



			
				shortlist said:
			
		

> as does the fact scalpers are simply looking for patterns and not caring about the stock




Traders as a whole don't care about the stock. They're in it for the movement.



> I found scalping fun, but I can see how it kind of precludes the implementation of lengthy studies of companies, etc. My plan is to start what I guess is the usual way - relatively stable blue chip equities, low risk, low profit, bought with my own money through a big online trader like Westpac. If things go well, I learn how the process works and my research/analysis pays off, I would "upgrade" to more sophisticated trades/investments over time.




Perhaps you shouldn't be looking to do things the usual way? You're also talking like an investor, not a trader, and you're not going to make a living (or even just a nice supplementary income) investing unless you have a serious amount of capital. I consider longterm investing to be a loser's game anyway, once inflation and variance is considered.



> I can see the attraction of day trading, which if I am right is generally considered to be slightly longer-term than scalping.




Scalping is day-trading, just one the fast end of the scale. Day-trading contains a large variety of methods and timescales.



> I think what intimidates newbies like me is keeping the shares overnight.




I used to think this was unnecessary exposure, but we gain a lot by letting our money work for us while we're asleep, out etc.



> I can't day trade as I have a slow satellite connection (backwards bloody country Oz)




The regional areas are backwards, the cities are adequate. Slow by Euro-US standards, but our population density is just a touch lower, so it's to be expected.


----------



## shortlist

Out Too Soon said:


> I can't day trade as I have a slow satellite connection (backwards bloody country Oz)   but I still hope to make a living eventually.
> I have stuck on the border of my screen a goal  "goal = $100 day avg ie ~$3100/mth"
> At the moment I need more capital but I am half way there this month  trading between 3 days & 12 wks. this is the first good mth in many many mths tho
> 4 yrs of on & off practice, eventually I will get there. You want to know my secret?  I have set my goal & stuck it on the edge of my screen where I see it all the time




Your system of $100 a day and sticking to goals sounds like a good idea to me. Presumable this is after tax and brokerage fees? I read somewhere on here that Trembling Hand (I think, apologies if wrong TH) said he didn't like to go below 1% loss per day, as he didn't want to have to catch up mopre than this on the following day - I think this is a smart rule to incorporate into your system as well.

As an aside, what capital are you requiring to return $100 a day? You can tell me to get lost if this is personal no worries at all.


----------



## shortlist

Mr J said:


> In his "Nothing to Something" thread, he averaged a trade every 30 seconds. Quite amazing, considering the spread.
> 
> 
> 
> Traders as a whole don't care about the stock. They're in it for the movement.
> 
> 
> 
> Perhaps you shouldn't be looking to do things the usual way? You're also talking like an investor, not a trader, and you're not going to make a living (or even just a nice supplementary income) investing unless you have a serious amount of capital. I consider longterm investing to be a loser's game anyway, once inflation and variance is considered.
> 
> 
> 
> Scalping is day-trading, just one the fast end of the scale. Day-trading contains a large variety of methods and timescales.
> 
> 
> 
> I used to think this was unnecessary exposure, but we gain a lot by letting our money work for us while we're asleep, out etc.
> 
> 
> 
> The regional areas are backwards, the cities are adequate. Slow by Euro-US standards, but our population density is just a touch lower, so it's to be expected.




You might be right about why go the "usual way" and I think it's just newbie nerves right now - tread carefully for a while and see how the feel of the process works out. The fluidity of the buying and selling, what's left after fees and taxes, etc. Like I said, my long-term goal would be to be more adventurous. Baby steps for now.... 

I also happen to agree with you about the trader/investor talk. I understand the distinction and I am aiming more to the trader side of things - short-term processes within a day perhaps. It's all new to me, but the demos I have run have all been mostly buying and selling without keeping overnight. I kept some spot gold on a longer-term basis and did well, but most equities were in and out and happy to take small profits/losses, which I think is the definition of a day trader??? THanks for your advice.......!


----------



## tech/a

(1) You need to complete your degree in trading. This will be self taught in the most part--yes you can engage tutors which will accelerate the process. To have a degree will take the mandatory 10000 hrs or 3 or so years. Part time even longer.
(2) To have honors you'll need a further 5000 or so hrs.
(3) Doctorate another 3 yrs or so.

At doctorate you'll be proficient and understand *WHAT YOU NEED TO KNOW* to be profitable--and you will be _*consistently*_ profitable.
More importantly you'll know *WHAT YOU DONT NEED TO KNOW.*

Thats what takes the time and costs a squillion.

This is how simple it is but wont mean much without at least a degree.

*Profit comes from one of 3.*

(1) You trade more winners than losers.IE 70% win rate Winners and losers same value
OR
(2) Your accumulated winners far exceed the loss of your accumulated Losers. IE 35% winners but winners 5x the size of your losers.
OR
(3) A combination of 1&2


----------



## shortlist

tech/a said:


> (1) You need to complete your degree in trading. This will be self taught in the most part--yes you can engage tutors which will accelerate the process. To have a degree will take the mandatory 10000 hrs or 3 or so years. Part time even longer.
> (2) To have honors you'll need a further 5000 or so hrs.
> (3) Doctorate another 3 yrs or so.
> 
> At doctorate you'll be proficient and understand *WHAT YOU NEED TO KNOW* to be profitable--and you will be _*consistently*_ profitable.
> More importantly you'll know *WHAT YOU DONT NEED TO KNOW.*
> 
> Thats what takes the time and costs a squillion.
> 
> This is how simple it is but wont mean much without at least a degree.
> 
> *Profit comes from one of 3.*
> 
> (1) You trade more winners than losers.IE 70% win rate Winners and losers same value
> OR
> (2) Your accumulated winners far exceed the loss of your accumulated Losers. IE 35% winners but winners 5x the size of your losers.
> OR
> (3) A combination of 1&2




Thanks tech/a - and nice analogy with the degree structure (I've already got one doctorate so now I'm working towards another it seems....!) Do you believe in focusing on one specific sector or are you more of an "opportunist" when it comes to short-term trading? 

I'm following the ASF September Stock Tipping Competition with some interest. I notice a little over 50% of tips made as of August 28 have made profit this month so far, with a few that are unchanged and some of course that have lost (if I recall about 30% of tips have lost value so far). I mention this because I note that many of the winners (just over half if memory serves) are in roughyl one area, in this case metals/mining. 

I guess what I'm asking is: in your opinion is the protracted and deep study of a specific sector more worthwhile than simply picking up on whatever is doing well at whatever moment you're buying?

Thanks once again


----------



## Frank D

shortlist said:


> I guess what I'm asking is: in your opinion is the protracted and deep study of a specific sector more worthwhile than simply picking up on whatever is doing well at whatever moment you're buying?




In my opinion you need to diversify sectors and pick a number of stocks 
in each.

But it’s not only about the stocks you choose, you should track the
 indexes that make up those stocks.

The overall index of each sector will often provide ideal set-ups and 
better timing strategies. It makes it much easier than tracking each 
and every stock on a daily, weekly or monthly basis.

If the Index is setting up patterns I just simply move into those stocks, 
not the other way around.

I track a number of markets, forex,  and commodities, and for me it’s just 
to difficult to track stocks individually.

The index will let you know when and where to trade.

Perfect examples were Financials from July, and currently oil 
stocks (hopefully)


----------



## shortlist

Frank D said:


> In my opinion you need to diversify sectors and pick a number of stocks
> in each.
> 
> But it’s not only about the stocks you choose, you should track the
> indexes that make up those stocks.
> 
> The overall index of each sector will often provide ideal set-ups and
> better timing strategies. It makes it much easier than tracking each
> and every stock on a daily, weekly or monthly basis.
> 
> If the Index is setting up patterns I just simply move into those stocks,
> not the other way around.
> 
> I track a number of markets, forex,  and commodities, and for me it’s just
> to difficult to track stocks individually.
> 
> The index will let you know when and where to trade.
> 
> Perfect examples were Financials from July, and currently oil
> stocks (hopefully)





Thanks Frank. It sounds like you're at a much more sophisticated level of trading than I am thinking about! My basic plan as a total beginner is continue to run demos until more comfortable, then buy shares in X once I am confident an uptrend is en route, and then sell them shortly afterwards to see if I can make a small profit. Tracking multiple indices and stocks is way over my head right now. If it helps illustrate my level of inexperience, I did not even know a specific sector like metals/mining had its own index - you're saying the ASX has its own mining index?

As for profit, I don't want anyone to think I am being unrealistic here. I have read some newbies who write about how they intend to make 20% + and higher figures. My own basic research shows me 0.5% -2% is a bloody good result and I will be happy with that, frankly. In your opinion should I be able to make 0.5% - 2% on shares if I do my research and buy at the right time? Would the (relatively) consistent return of 0.5% profit on each trade be a realistic goal? I also would expect to lose a similar percentage of course, but less often, laws of entropy, etc. notwithstanding!)


----------



## Mr J

> and then sell them shortly afterwards to see if I can make a small profit.




You may also consider holding on to them (or at least some of them) for a large profit .


----------



## shortlist

Mr J said:


> You may also consider holding on to them (or at least some of them) for a large profit .




I think the sell as soon as any profit is realised is another sign of newbie nerves, and the courage to hold for longer periods will hopefully develop as time goes on. I am not averse to holding longer - years even, but to start with I think it's going to be shorter bursts. How long have you been trading/investing?


----------



## skyQuake

Let your winners run or brokerage will eat you alive, esp for a retail trader trying to take 0.5~2%
Heck for the small caps, thats probably how much the spread is.


----------



## shortlist

skyQuake said:


> Let your winners run or brokerage will eat you alive, esp for a retail trader trying to take 0.5~2%




If brokerage is often a set fee, would that not depend on the quantity of shares bought?


----------



## Frank D

shortlist said:


> . My own basic research shows me 0.5% -2% is a bloody good result and I will be happy with that, frankly. In your opinion should I be able to make 0.5% - 2% on shares if I do my research and buy at the right time? Would the (relatively) consistent return of 0.5% profit on each trade be a realistic goal? I also would expect to lose a similar percentage of course, but less often, laws of entropy, etc. notwithstanding!)




My own research is you can make 10-20% per Quarter, even more on rare occassions depending on the cycles in the market.

However, for you to achieve that you need to be buying the 'dips' and 
exitting the peaks, the greater the dip the greater the peak.

That basically translates to trading 1 or 2 twice per quarter and Holding.

If the market doesn't dip then you need to wait, but that's why trading different sectors help, as 
one sector is trending another sector is consolidating over a number of months providing a set-up
 in the future.

The premise is you break up Quarterly timeframes like you break up daily timeframes and treat 
each Quarterly timeframe as an individual time piece, and optimise the Quarter with lesser 
timeframe set-ups.

Start from the top and then work your way down into entry set-ups using lesser timeframes:- Monthly, Weekly and Daily.

I just think it's too hard to be 'day trading' stocks and trying to take small profits, especially 
when you are just starting out.

Enjoy the Journey.


----------



## shortlist

Frank D said:


> My own research is you can make 10-20% per Quarter, even more on rare occassions depending on the cycles in the market.
> 
> However, for you to achieve that you need to be buying the 'dips' and
> exitting the peaks, the greater the dip the greater the peak.
> 
> That basically translates to trading 1 or 2 twice per quarter and Holding.
> 
> If the market doesn't dip then you need to wait, but that's why trading different sectors help, as
> one sector is trending another sector is consolidating over a number of months providing a set-up
> in the future.
> 
> The premise is you break up Quarterly timeframes like you break up daily timeframes and treat
> each Quarterly timeframe as an individual time piece, and optimise the Quarter with lesser
> timeframe set-ups.
> 
> Start from the top and then work your way down into entry set-ups using lesser timeframes:- Monthly, Weekly and Daily.
> 
> I just think it's too hard to be 'day trading' stocks and trying to take small profits, especially
> when you are just starting out.
> 
> Enjoy the Journey.




Thanks Frank. I'm going to sit down with a beer tonight and think about your quarterly system. Off the top of my head, if you were making 15% per trade, and doing two trades per qtr you wouldn't need that large a capital base before you built up quite a profit over a few years - providing you reinvested all gains. Am I right?

I reiterate in edit that I won't be expecting returns like this for a long time. I'm just Mr 2% for now, and I think if I aim there I might just pull it off.


----------



## tech/a

> My own research is you can make 10-20% per Quarter, even more on rare occassions depending on the cycles in the market




Frank
Of what?
A capital base of $100K then should do or do you mean something different?

More to talk of but a bit pressed for time.
Later.


----------



## AlterEgo

shortlist said:


> As for profit, I don't want anyone to think I am being unrealistic here. I have read some newbies who write about how they intend to make 20% + and higher figures. My own basic research shows me 0.5% -2% is a bloody good result and I will be happy with that, frankly. In your opinion should I be able to make 0.5% - 2% on shares if I do my research and buy at the right time? Would the (relatively) consistent return of 0.5% profit on each trade be a realistic goal? I also would expect to lose a similar percentage of course, but less often, laws of entropy, etc. notwithstanding!)




If you're only aiming to make 0.5% profit per trade, you're wasting your time and money IMO. You'll never make an overall profit with your profits that small. You should be aiming for *at least* 10% profits IMO (preferably much higher).

Just look what your brokerage fees, and the spread costs you for that small gain:
For $10,000 trade, with brokerage of $15 each way, means brokerage alone costs you 0.3%. Then add the spead of say 0.5% ($1 share with 0.5c spread) means that share has to move 0.8% just for you to break even. So risking all that (plus the distance your stop-loss is away from your entry) just for a possible gain of 0.5% is only going to result in failure. You'd be better off swing trading over several days or weeks for the bigger gains IMO.


----------



## Mr J

shortlist said:


> I think the sell as soon as any profit is realised is another sign of newbie nerves, and the courage to hold for longer periods will hopefully develop as time goes on. I am not averse to holding longer - years even, but to start with I think it's going to be shorter bursts. How long have you been trading/investing?




Remeber you don't need to close or hold onto the entire position. Partial sells at good profit while letting some ride might be a good way to become comfortable. I haven't been doing this much longer than you.



> If you're only aiming to make 0.5% profit per trade




Given the timeframe he's talkinga about, he may be talking about 0.5% of total capital.


----------



## shortlist

AlterEgo said:


> If you're only aiming to make 0.5% profit per trade, you're wasting your time and money IMO. You'll never make an overall profit with your profits that small. You should be aiming for *at least* 10% profits IMO (preferably much higher).
> 
> Just look what your brokerage fees, and the spread costs you for that small gain:
> For $10,000 trade, with brokerage of $15 each way, means brokerage alone costs you 0.3%. Then add the spead of say 0.5% ($1 share with 0.5c spread) means that share has to move 0.8% just for you to break even. So risking all that (plus the distance your stop-loss is away from your entry) just for a possible gain of 0.5% is only going to result in failure. You'd be better off swing trading over several days or weeks for the bigger gains IMO.





Thanks for this AE. I'm here to learn after all and there really is a lot of great advice andknowledge on this forum. I appreciate your example of the 0.5% being too small to aim at. I think my logic was if I bought enough shares then 0.5% profit would be large enough to accommodate brokerage fees, by I'm only beginning to understand stuff like "spread" and wouldn't mind more clarification if you have the time.


----------



## AlterEgo

Mr J said:


> Given the timeframe he's talkinga about, he may be talking about 0.5% of total capital.




No. He said:



shortlist said:


> consistent return of 0.5% profit *on each trade*


----------



## shortlist

Mr J said:


> Remeber you don't need to close or hold onto the entire position. Partial sells at good profit while letting some ride might be a good way to become comfortable. I haven't been doing this much longer than you.
> 
> 
> 
> Given the timeframe he's talkinga about, he may be talking about 0.5% of total capital.




I'll confess that I hadn't really though about retaining a percentage of the shares and holding them for more gains. Again, my inexperience told methat if the share price was right to sell then get out before it slides down. Market movements and timing are massive subjects to understand after all.


----------



## shortlist

AlterEgo said:


> No. He said:




Yes let me clarify, I meant buying a good amount of shares and being happy to sell them if they should rise as little as 0.5% or 2%, the logic being the quantity would more than cover brokerage and supply a small profit, but our conversation is making me think twice about this..........!


----------



## tasmanian

shortlist said:


> Yes let me clarify, I meant buying a good amount of shares and being happy to sell them if they should rise as little as 0.5% or 2%, the logic being the quantity would more than cover brokerage and supply a small profit, but our conversation is making me think twice about this..........!




   I wouldnt even think about it anymore.Forget that idea.Taking 1-2% profits there is no way you will last very long.Your account will be gone before u have even realised that u have started.

  Now taking 1-2% losses is worth thinking about.

  Personally I wouldnt even set a % for profits.100% profit on 1 trade is not easy and doesnt happen all the time but have a look at a few charts and see how far some stocks have come on the last 6 months.Quite alot 100%+.thats what u should be aiming for.Thats how u make the big money in the markets imo.

  Sell losers quick.Let winners run as far as u can.Emotions play a huge part in this and no book or advice can teach you this only time.How you deal with these emotions wont be known until you actually experience it with your hard earned cash.Demo accounts are good for learning the basics but still wont prepare you mentally until your money is on the line.Thats when the real fun starts

 Enjoy it,have fun and if u really have a passion for the market eventually you will be succesful.

  ,


----------



## shortlist

tasmanian said:


> I wouldnt even think about it anymore.Forget that idea.Taking 1-2% profits there is no way you will last very long.Your account will be gone before u have even realised that u have started.
> 
> Now taking 1-2% losses is worth thinking about.
> 
> Personally I wouldnt even set a % for profits.100% profit on 1 trade is not easy and doesnt happen all the time but have a look at a few charts and see how far some stocks have come on the last 6 months.Quite alot 100%+.thats what u should be aiming for.Thats how u make the big money in the markets imo.
> 
> Sell losers quick.Let winners run as far as u can.Emotions play a huge part in this and no book or advice can teach you this only time.How u  deal with these emotions wont be known until u actually experience it with your hard earned cash.Demo accounts are good for learning the basics but still wont prepare u mentally until your money is on the line.
> 
> Enjoy it,have fun and if u really have a passion for the market eventually u will be succesful.
> 
> ,





Thanks for the encouragement, tasmanian. I'm getting a lot of good ideas on here but I won't be "going live" with my own money for some time. How long have you been trading?


----------



## Sir Osisofliver

Mr J said:


> Perhaps you shouldn't be looking to do things the usual way? You're also talking like an investor, not a trader, and you're not going to make a living (or even just a nice supplementary income) investing unless you have a serious amount of capital. *I consider longterm investing to be a loser's game anyway, once inflation and variance is considered.*




HI Mr J,

I find this an interesting comment and was wondering if you would mind expanding your thoughts on it a bit.  I'll likewise expand my thoughts here and hope I don't derail the thread.

I differ by 180 degrees on this view.  I think long-term investing is something that *everyone* should be doing. Personally even though I like to trade I ever only commit 20% of my investing funds into doing so, with 80% in a long term share portfolio. I also plough trading profits back into long-term investments depending upon where we are in terms of market cycle and how attractive the real estate market looks.

Reasons

1) Cost based yield.  Example. I bought BHP shares in '02 for roughly $8.00 when the company was paying a 5% yield (40 cents div). Even at the worst of the corrective phase of the market why would I have sold it? I'd have had to pay CGT and I would have lost my *cost based yield*. Even during the worst of the market doom and gloom BHP was paying a dividend of roughly $1.12, so on my original investment my yield is 14% fully franked and by balance of probability _will only get better over time_. What other ASX top 20 stock would it have made it worthwhile for me to sell that holding, pay the CGT and better that yield?  There aren't any. Notice I used a mining company for this example. Higher yielding sectors of the market look even better from a cost based yield perspective. (This also doesn't take into account any money I would have made by hedging this position atthe top of the market).

2) Cost of investing. I can use my long term investment portfolio to borrow money. (Yes I know I can use leverage effectively in a trading system as well but I cannot rock up at the bank and ask them to lend me money based upon my trading history alone). The advantage in using other people's money to fund my investment is that at certain points of the cycle I can borrow money to invest long-term _and still be positively geared_. What does this investment cost me?  Absolutely nothing. So when my portfolio goes up in value over the course of the market cycle, I've turned something that cost me _nothing_ into something that produces a compounding rate of return over time and grows _faster than inflation._

I'm not done yet but it's beer o'clock on Friday I'll visit on Monday and put a bit more in here.

Cheers

Sir O


----------



## tasmanian

Ive been involved in the sharemarket for probaly 10 years.Started of with no idea like we all do.Just bought anything that was recommended in a magazine or whatever.Then started to try and work out FA.Personally I think its a waste of time reading all those reports etc.

  Im sure alot will disagree with me on the FA but personally I just think all the answers are in the charts anyway.So eventually I found charts and thats where my passion was and will always be.

  Im definetely no professional but have been profitable every year for the last 5 years or so.Some really good years and some average.

  It all just takes time.Im still learning everyday and Im serious everyday I learn something new.I look back on what I was doing even a year or 2 ago and see how much more profitable I could have been but thats part of the game.Experience is the key.

  I could write and write but its really up too you.Keep asking questions and feeding your brain with as much knowledge as u can.Then eliminate the good from the bad .Eveyone will have different advice on how to trade what to trade but eventually its up to you to decide.

  One thing is everyone has a different opinion on what the markets going to do.Trust your own judgement because its your money in the end and really nobody knows what the market is going to do..

  oh yeah read Stan Weinsteins book.Profiting in a bull and bear market.Its a great starting point and will definetely start u on the right path to understanding the cycles of the stock market and individual stocks.

 good luck and just enjoy the learning process.Theres no rush the markets will be there whenever you feel ready.
Better to start off small too.Trust me youll understand once u start putting your money on the line and realise how quick your account balance can change in the space of a week.somedays you feel king of the world.Next day you come back to reality pretty quickly and realise this sharemarket game is not easy.


----------



## Tysonboss1

Peoples comments on the size of your captial base are absolutly correct.

I know a guy that was trading with a capital base of only $100,000 and was doing ok pulling about $60,000 pa profit. 

the trouble was he spending all his profits on living expenses, then when the GFC hit he made a few losses and started eating his capital base down to abot $30,000, He is now back in the Army.

I wise man once said, "you only have to get rich once". The bigger your capital base the less risk you have to take to deliver you that $100K a year income.

If you have $100K you have to make a 100% pa return to earn a $100K.

if you have $1M you only have to earn 10%pa return to earn a $100K.


----------



## shortlist

tasmanian said:


> Ive been involved in the sharemarket for probaly 10 years.Started of with no idea like we all do.Just bought anything that was recommended in a magazine or whatever.Then started to try and work out FA.Personally I think its a waste of time reading all those reports etc.
> 
> Im sure alot will disagree with me on the FA but personally I just think all the answers are in the charts anyway.So eventually I found charts and thats where my passion was and will always be.
> 
> Im definetely no professional but have been profitable every year for the last 5 years or so.Some really good years and some average.
> 
> It all just takes time.Im still learning everyday and Im serious everyday I learn something new.I look back on what I was doing even a year or 2 ago and see how much more profitable I could have been but thats part of the game.Experience is the key.
> 
> I could write and write but its really up too you.Keep asking questions and feeding your brain with as much knowledge as u can.Then eliminate the good from the bad .Eveyone will have different advice on how to trade what to trade but eventually its up to you to decide.
> 
> One thing is everyone has a different opinion on what the markets going to do.Trust your own judgement because its your money in the end and really nobody knows what the market is going to do..
> 
> oh yeah read Stan Weinsteins book.Profiting in a bull and bear market.Its a great starting point and will definetely start u on the right path to understanding the cycles of the stock market and individual stocks.
> 
> good luck and just enjoy the learning process.Theres no rush the markets will be there whenever you feel ready.
> Better to start off small too.Trust me youll understand once u start putting your money on the line and realise how quick your account balance can change in the space of a week.somedays you feel king of the world.Next day you come back to reality pretty quickly and realise this sharemarket game is not easy.




Excellent advice - enjoy the weekend. I'm off to grab a cold beer.

PS Will get the Weinstein book.


----------



## shortlist

Tysonboss1 said:


> Peoples comments on the size of your captial base are absolutly correct.
> 
> I know a guy that was trading with a capital base of only $100,000 and was doing ok pulling about $60,000 pa profit.
> 
> the trouble was he spending all his profits on living expenses, then when the GFC hit he made a few losses and started eating his capital base down to abot $30,000, He is now back in the Army.
> 
> I wise man once said, "you only have to get rich once". The bigger your capital base the less risk you have to take to deliver you that $100K a year income.
> 
> If you have $100K you have to make a 100% pa return to earn a $100K.
> 
> if you have $1M you only have to earn 10%pa return to earn a $100K.




Thanks Tysonboss. I have a good capital base but would only be investing a fraction of it until I was returning a consistent profit - no matter how small. I don't mind going slow and taking it easy. I'm not chasing big bucks and I'm not in a rush. Your friend was making a great percentage return p.a., no? I mean considering it was post-tax.


----------



## nunthewiser

Good post Sir O 

most people forget the simple things in wealth creation because they are so much in a hurry to become a "stock market trader" 

The building of assets and long term wealth and high yield incomes often left by the wayside in peoples search for riches 

cheers


----------



## tech/a

> I differ by 180 degrees on this view. I think long-term investing is something that *everyone* should be doing.





I second that.

But seeing we are talking "Day Trading"

Personally I dont strictly day trade (Never hold positions overnight).
but discretionary trading is short term.
Its always a proces of trade management.
Culling Non performers,raising stops,analysing various timeframe to find reasons to keep or add to a trade.

I have a very strong major rule.
If I buy a stock I expect that the analysis to anticipate immediate profit--that day if not within the next hr.

I wont trade a wide range of stocks at the one time.
I call "trading" adding aggressively---moving stops.
I will have many pending orders in front of a move. I'll also cancel them if they move away. I want movement now.
I wont sit and wait unless in PROFIT.
Stops always get moved to B/E if over a day old.
Since using Limit stop orders (Buy and sell stops) slippage has become very rare.

*Learn HOW TO THINK.*


----------



## Nick Radge

Some articles I wrote some time ago in support of Sir O's comments...

The Art of Share Collecting

https://www.aussiestockforums.com/images/tc/487118.PDF

The Strength of Dividends

https://www.aussiestockforums.com/images/tc/487118b.PDF



_This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision.

Past performance is not a reliable indication of future performance. This material has been prepared based on information believed to be accurate at the time of publication. Subsequent changes in circumstances may occur at any time and may impact the accuracy of the information._


----------



## tasmanian

Nick Radge said:


> Some articles I wrote some time ago in support of Sir O's comments...
> 
> The Art of Share Collecting
> The Strength of Dividends




Gday Nick,

  Thanks for sharing your articles.I like the idea of having a long term dividend type growth portfolio.I did have one a few years ago but sold out of them all and now mainly trade.Am looking at starting another one in the near future

  Just wondering with the recent sell off we had in stocks would you or did you still hold the stocks during the downturn or did you sell and buy back at a lower price?
   Or just keep buying as stocks got a better div yield?I realise the tax implication in selling etc but seems abit scary to me holding those stocks through the whole downturn.Looks like it would pay off now but not sure if I could handle that sort of drawdown.

  Any advice would be greatly appreciated.

cheers


----------



## Tysonboss1

shortlist said:


> Your friend was making a great percentage return p.a.,




Yes, he was. But keep in mind it was during the bull market, Then the gfc devastated him.


----------



## Kryzz

Why would you focus so much on long term investing if you can earn a better % return p.a. doing something else, ie, swing trading?

Also, there have been many people calling that the market will be range bound or heading lower etc etc, would u still be buying and holding then?

Is it just the dividends your referring too re. long term investing?


----------



## Trembling Hand

Kryzz said:


> Why would you focus so much on long term investing if you can earn a better % return p.a. doing something else, ie, swing trading?
> 
> Also, there have been many people calling that the market will be range bound or heading lower etc etc, would u still be buying and holding then?
> 
> Is it just the dividends your referring too re. long term investing?




Why would a butcher sell minced meat when he makes more on eye fillet?


----------



## Sir Osisofliver

@ Nick - Nice articles - I've written similar stuff before but you presented that nice and concisely.



tasmanian said:


> Gday Nick,
> 
> Thanks for sharing your articles.I like the idea of having a long term dividend type growth portfolio.I did have one a few years ago but sold out of them all and now mainly trade.Am looking at starting another one in the near future
> 
> Just wondering with the recent sell off we had in stocks would you or did you still hold the stocks during the downturn or did you sell and buy back at a lower price?
> Or just keep buying as stocks got a better div yield?I realise the tax implication in selling etc but seems abit scary to me holding those stocks through the whole downturn.Looks like it would pay off now but not sure if I could handle that sort of drawdown.
> 
> Any advice would be greatly appreciated.
> 
> cheers




@ Tas - Yup I held a bunch of stuff all through 08 (about 37 lines of stock from memory). To quote Buffett _"My ideal holding timeframe is forever"_  These are also the same stocks that I had options coverage on. Setting up an options coverage across a portfolio like that costs on average about 6-10% of the value of the portfolio. Think of it like a insurance payment... I do.

Essentially what this does is transfer the CGT implication from the direct share (where I want to preserve the Cost based yield) into the option hedge. I still have to pay CGT however when I sell the option, so if you want to perfectly hedge the value of the share at a specific time you need to not just cover the position, but purchase enough additional contracts to cover the tax implications.

What I then did is use the money generated from the hedge to buy back into the market...and the advantage in doing so is that I'm buying the shares at the bottom of the cycle when everyone hates the market, the sky is falling and the doom and gloom merchants are having a field day.

Mind you I did get burned on one of them but hey that's investing and frankly I needed the tax deduction.

Cheers

Sir O


----------



## Sir Osisofliver

Kryzz said:


> Why would you focus so much on long term investing if you can earn a better % return p.a. doing something else, ie, swing trading?




shaunkris - how much time does swing trading take in comparison to long-term investing?  I know that's a little bit like asking how long is a piece of string, because some people would probably spend the same amount of time, reading research reports and newspapers, attending AGM's and reading annual statements and the like, but I have very careful selection criteria when I enter these stocks. This means that essentially the portfolio becomes set and forget and I review it half-yearly. (It's easy for me because I spend so much time dealing with stocks anyway that usually I know about any negative events as they happen). 

So not only does the portfolio not cost me anything because it's positively geared, it doesn't take much time at all to deal with it, leaving me free to do other things. 

Also remember that this is wealth creation, not trading so that activity doesn't add directly to my income (beyond dividends) like trading does. When you add in the compounding benefits over time I've spent very little time comparitively to a trading activity, without the excitement or stress or trading. (beyond what I want to do). 







> Also, there have been many people calling that the market will be range bound or heading lower etc etc, would u still be buying and holding then?
> 
> Is it just the dividends your referring too re. long term investing?




I don't subscribe to the belief that the market is going to range down again.

Whilst there is the potential for a formation where we see sideways movement over the next couple of years, if my portfolio is positively geared...what do I care?  It just means I have to wait a bit longer before buying my solid gold toilet seat. (It also means that if the stock market is moving sideways and unattractive looking that the property market has a much higher probability of being an area of investment focus - and hence that portion of my assets will return better).

Cheers

Sir O


----------



## Mr J

shortlist said:


> Yes let me clarify, I meant buying a good amount of shares and being happy to sell them if they should rise as little as 0.5% or 2%, the logic being the quantity would more than cover brokerage and supply a small profit, but our conversation is making me think twice about this..........!




0.5% per trade just isn't enough. For shorterm trading, you won't cover fees, and for longterm trading these trades just won't be worthwhile. Don't look to sell them just because they rose x%, you sell because you think the trade will more than likely not go up any further.



Sir Osisofliver said:


> HI Mr J,
> 
> I find this an interesting comment and was wondering if you would mind expanding your thoughts on it a bit.  I'll likewise expand my thoughts here and hope I don't derail the thread.




The statement I made was a little too simple to represent my entire view. I was refering to the 'investors' who achieve ordinary returns and have poor risk management in place and get hit hard in crashes. If they're only achieving 10% a year, it's a pretty miserable return considering that half of that is inflation, so that they may suffer a 50% drop just to gain 5% per year.

I have no problems with longterm investing if it's far better than 10%, or that measures are taken to significantly reduce the fluctuations in capital. I admit that I'm biased against investing, and that shorter term trading makes me completely unable to appreciate 10% or 20% gains. A great trade can make that in a day, so it's not hard to see why I'm pretty dismissive. I see extreme longterm trading (i.e. investing) as a minimal activity/minimal return exercise. Like picking up a sport and just rocking up every couple of weekends.


----------



## shortlist

Mr J said:


> 0.5% per trade just isn't enough. For shorterm trading, you won't cover fees, and for longterm trading these trades just won't be worthwhile. Don't look to sell them just because they rose x%, you sell because you think the trade will more than likely not go up any further.




Thanks Mr J - I got a lot of feedback on the 0.5% plan and have reviewed my strategy accordingly. On another note - Newbie Questio No. 531: can you adjust a stop as your stock goes higher, or must you initiate a trailing stop upon initial purchase? Thanks in advance....


----------



## Mr J

Stop option may depend on your broker, but I move mine manually. I usually set the stops according to support and resistance, though I often don't actually let my trades get stopped out.


----------



## shortlist

Mr J said:


> Stop option may depend on your broker, but I move mine manually. I usually set the stops according to support and resistance, though I often don't actually let my trades get stopped out.




OK, thanks. So you are able to reset stops as your trade moves. Right - but you are also saying that you sell manually before the stop is reached?


----------



## Mr J

I place a stop at my logical point of exit, but I don't like the way the trade is behaving, I'll close the trade. It's just the difference between being discretionary or mechanical. Some people will rely on their stops to take the out, others will get out before their pre-defined exit.


----------



## shortlist

Mr J said:


> I place a stop at my logical point of exit, but I don't like the way the trade is behaving, I'll close the trade. It's just the difference between being discretionary or mechanical. Some people will rely on their stops to take the out, others will get out before their pre-defined exit.




Thanks Mr J. I have a lot to learn, clearly, but it's such an interesting subject. I'm tending to look at the whole thing like a puzzle right now, with money just as units that enable me to play the game and solve the puzzle. 

Good job I'm still paper trading. Of last four "open positions" one got me a 7.5% profit, one got me a 10% loss (they cancelled each other out due to difference in position size) and the other two positions are still open.


----------



## Mr J

10% of the trade size, of the risk on the trade, or the account size? I judge trades by the return on the amount at risk. Going back to 0.5%, that might be fine if you're talking about the trade size, which may be $100k for an SPI contract while you may only be risking $250 on the trade.



> I have a lot to learn




We all do, and I certainly do. Just consider anything I say as an opinion, as I've been doing this for 6 months and don't want to pass myself off as anything more than that.


----------



## shortlist

Mr J said:


> 10% of the trade size, of the risk on the trade, or the account size? I judge trades by the return on the amount at risk. Going back to 0.5%, that might be fine if you're talking about the trade size, which may be $100k for an SPI contract while you may only be risking $250 on the trade.




The gains and losses I mentioned were percentages of the amount at risk - the sum actually in the trade, not the full capital base. Do you trade in a specific sector if you can or are you happy to go along with whatever looks good? I guess I'm trying to find out the value of developing a specialism.


----------



## Sir Osisofliver

Mr J said:


> The statement I made was a little too simple to represent my entire view. I was refering to the 'investors' who achieve ordinary returns and have poor risk management in place and get hit hard in crashes. If they're only achieving 10% a year, it's a pretty miserable return considering that half of that is inflation, so that they may suffer a 50% drop just to gain 5% per year.
> 
> I have no problems with longterm investing if it's far better than 10%, or that measures are taken to significantly reduce the fluctuations in capital. I admit that I'm biased against investing, and that shorter term trading makes me completely unable to appreciate 10% or 20% gains. A great trade can make that in a day, so it's not hard to see why I'm pretty dismissive. I see extreme longterm trading (i.e. investing) as a minimal activity/minimal return exercise. Like picking up a sport and just rocking up every couple of weekends.




Gosh darn it I had this massive post for you and I got logged out and I lost it.  Oh well it looked a bit like this......

Mind if I challenge your perceptions a bit?

Scenario 1) $2000 cash (own money) Trading...

Let's say you are a great trader and achieve a consistent 30% per month return with no down months for a year. At the end of 12 months.....

Your portfolio is worth $35,848.21 a return of 1792% an after tax return of $25,090.25 (assuming you are a clever chap using a Company and trust structure to limit your MTR) bringing your return down to 1255% NOICE EH? Well done a nice return for all your hard work reading charts and analysing shares and telling the girlfriend, "Not tonight dear I'm trading on the Nasdaq".

Scenario 2) $2000 cash (own money) Investing...

Couple of assumptions needed here.  Lets say I have $500,000 of borrowing capacity from my assets, I can borrow money at 8.25%, and I will get a 5% fully franked dividend yield across my portfolio, and I'm also a clever clogs who has capped his MTR at 30% with the use of a company and trust structure.

I borrow $260,000 and invest it in the market (I'll just replicate the index how does that sound?). At the end of the year, after tax, interest rebates, franking credits and other considerations, my exposure to a $260,000 portfolio has cost me $1,972 and I bought $28 worth of cheap scotch during the year as well to get me to a nice round $2,000.

So a 10% increase in the market means that my $2000 turned into a $26,000 increase in my net wealth. Or a return on my money of 1300%.

A 20% increase in the market means that my $2000 turned into a $52,000 increase in my net wealth or a 2600% return.

If you had initiated such a strategy on the 1st of June 2009 (not even using the bottom of the market here), the index has increased 22.36% and your return on own funds used would have been 2907%

I'm NOT taking into consideration using the growth in the portfolio to borrow additional money and re-invest further adding to my level of return.

Comments?

Cheers

Sir O


----------



## skyQuake

Agree in general Sir O, but risk of ruin is greatly amplified; The strategy would fare a lot worse when the market is tanking, case in point - Storm.
Not saying its all like storm but the concept is similar and prone to advisor abuse.

The $2000 daytrading example would at worst, lose you $2000. There is room for recovery as $2000 won't cripple you and you can easily raise another stake.

Also, I would sleep a lot better at night if 1/2 my house wasn't leveraged to the markets.

Cheers

Edit: Then again, brokerage will definitely cripple the $2000 acct unless you get some reallly big winners early on.


----------



## Sir Osisofliver

skyQuake said:


> Agree in general Sir O, but risk of ruin is greatly amplified; The strategy would fare a lot worse when the market is tanking, case in point - Storm.
> Not saying its all like storm but the concept is similar and prone to advisor abuse.
> 
> The $2000 daytrading example would at worst, lose you $2000. There is room for recovery as $2000 won't cripple you and you can easily raise another stake.
> 
> Also, I would sleep a lot better at night if 1/2 my house wasn't leveraged to the markets.
> 
> Cheers
> 
> Edit: Then again, brokerage will definitely cripple the $2000 acct unless you get some reallly big winners early on.




Skyquake.....

1) have a look at the borrowing capacity $500,000.00 as opposed to the amount actually borrowed $260,000.  Is this a large enough of a buffer to help you sleep at night?  Risk management is risk management. You could lose your job for a couple of years and still not use the buffer that you have in place. You protect the assets that you have with reserves in place FIRST.  But frankly if you are not using half you house value to invest.....you can bet the bank is.

2) You'll note I made no mention of a margin lending facility whatsoever (even though I used a m/l interest level in my example)...so no margin calls no double debt strategy no negative equity scenario al la Storm. 

3) Of COURSE you would not do this at the top of the market, you wait until the beginning of the market cycle for ANY geared strategy. Of course if you were using Margin lending for this strategy what would happen to the LVR when the portfolio increases in value?  The LVR drops. Direct your dividends into paying your ML interest and within a year or two as dividends increase you will be *positively* geared. As we move back towards the top of the cycle....no ML facility.

4) What advisor? Do this yourself...then no abuse issue.

Cheers
Sir O


----------



## shortlist

Sir Osisofliver said:


> Gosh darn it I had this massive post for you and I got logged out and I lost it.  Oh well it looked a bit like this......
> 
> Mind if I challenge your perceptions a bit?
> 
> Scenario 1) $2000 cash (own money) Trading...
> 
> Let's say you are a great trader and achieve a consistent 30% per month return with no down months for a year. At the end of 12 months.....
> 
> Your portfolio is worth $35,848.21 a return of 1792% an after tax return of $25,090.25 (assuming you are a clever chap using a Company and trust structure to limit your MTR) bringing your return down to 1255% NOICE EH? Well done a nice return for all your hard work reading charts and analysing shares and telling the girlfriend, "Not tonight dear I'm trading on the Nasdaq".
> 
> Scenario 2) $2000 cash (own money) Investing...
> 
> Couple of assumptions needed here.  Lets say I have $500,000 of borrowing capacity from my assets, I can borrow money at 8.25%, and I will get a 5% fully franked dividend yield across my portfolio, and I'm also a clever clogs who has capped his MTR at 30% with the use of a company and trust structure.
> 
> I borrow $260,000 and invest it in the market (I'll just replicate the index how does that sound?). At the end of the year, after tax, interest rebates, franking credits and other considerations, my exposure to a $260,000 portfolio has cost me $1,972 and I bought $28 worth of cheap scotch during the year as well to get me to a nice round $2,000.
> 
> So a 10% increase in the market means that my $2000 turned into a $26,000 increase in my net wealth. Or a return on my money of 1300%.
> 
> A 20% increase in the market means that my $2000 turned into a $52,000 increase in my net wealth or a 2600% return.
> 
> If you had initiated such a strategy on the 1st of June 2009 (not even using the bottom of the market here), *the index has increased 22.36%* and your return on own funds used would have been 2907%
> 
> I'm NOT taking into consideration using the growth in the portfolio to borrow additional money and re-invest further adding to my level of return.
> 
> Comments?
> 
> Cheers
> 
> Sir O




Interesting stuff. Right now I am undecided between preferred time frames and I can see the merits of both. My Newbie Question No. 642 is: how do you buy shares in an index? Do you buy a contract? I mean - how do you "own" part of an index? I understand how you own shares, and I (now) understand what a CFD is and how that works. But buying into indices??

Your help is appreciated!


----------



## prawn_86

shortlist said:


> Interesting stuff. Right now I am undecided between preferred time frames and I can see the merits of both. My Newbie Question No. 642 is: how do you buy shares in an index? Do you buy a contract? I mean - how do you "own" part of an index? I understand how you own shares, and I (now) understand what a CFD is and how that works. But buying into indices??
> 
> Your help is appreciated!




You buy shares in a company that replicates the index. ARG, AFI, STW etc. With their cash they buy the correct weightings of the index, so in theory their price movements should be very similar to the index itself


----------



## shortlist

skyQuake said:


> Agree in general Sir O, but risk of ruin is greatly amplified; The strategy would fare a lot worse when the market is tanking, case in point - Storm.
> Not saying its all like storm but the concept is similar and prone to advisor abuse.
> 
> The $2000 daytrading example would at worst, lose you $2000. There is room for recovery as $2000 won't cripple you and you can easily raise another stake.
> 
> Also, I would sleep a lot better at night if 1/2 my house wasn't leveraged to the markets.
> 
> Cheers
> 
> Edit: Then again, brokerage will definitely cripple the $2000 acct unless you get some reallly big winners early on.




Some good points here - I think the sleepling soundly at night thing is high up on any newbie's list for sure. This beginner would not consider using a house as security until a proved track record was established. And getting 30% back every month for a year seems an unreachable goal for this newbie - hey - I was considering myself successful if I could return 2% per trade! 

I obviously don't think big enough.....


----------



## shortlist

prawn_86 said:


> You buy shares in a company that replicates the index. ARG, AFI, STW etc. With their cash they buy the correct weightings of the index, so in theory their price movements should be very similar to the index itself




Thanks again prawn! How do I determine who these companies are? Is there a Big Book of Companies that Replicate the Index somewhere or do you just get to know with experience. Apologies for the obvious ignorance.


----------



## skyQuake

Sir Osisofliver said:


> Skyquake.....
> 
> 1) have a look at the borrowing capacity $500,000.00 as opposed to the amount actually borrowed $260,000.  Is this a large enough of a buffer to help you sleep at night?  Risk management is risk management. You could lose your job for a couple of years and still not use the buffer that you have in place. You protect the assets that you have with reserves in place FIRST.  But frankly if you are not using half you house value to invest.....you can bet the bank is.
> 
> 2) You'll note I made no mention of a margin lending facility whatsoever (even though I used a m/l interest level in my example)...so no margin calls no double debt strategy no negative equity scenario al la Storm.
> 
> 3) Of COURSE you would not do this at the top of the market, you wait until the beginning of the market cycle for ANY geared strategy. Of course if you were using Margin lending for this strategy what would happen to the LVR when the portfolio increases in value?  The LVR drops. Direct your dividends into paying your ML interest and within a year or two as dividends increase you will be *positively* geared. As we move back towards the top of the cycle....no ML facility.
> 
> 4) What advisor? Do this yourself...then no abuse issue.
> 
> Cheers
> Sir O




Ok, thats fair, but a lof that that rests on market timing, getting the cycle right. Would you hypothetically use that strategy now? It could go 30% either way; Are we moving towards the top of the cycle or just started from the lows? Imo its still a bit too dependant on timing.
Cheers


----------



## prawn_86

shortlist said:


> Thanks again prawn! How do I determine who these companies are? Is there a Big Book of Companies that Replicate the Index somewhere or do you just get to know with experience. Apologies for the obvious ignorance.




They are called Listed Investment Companies (LICs) a search for that should give a few hits. The ones i have listed are some of the bigger ones, with STW being run as a trust structure (i think)


----------



## Mr J

Sir Osisofliver said:


> Comments?




How about that second year, third year or fourth year?  The trader will outperform the investor who borrowed 500k within a short space of time. Even in the first year, with 1/250th the capital, the trader manages to make roughly as much as the investor. I also have to question why someone with $500k borrowing power is starting with just $2k. If we bump that starting capital up to $10k, it's not even a contest, even if we improve the investing performance to 20%/pa.



> So a 10% increase in the market means that my $2000 turned into a $26,000 increase in my net wealth. Or a return on my money of 1300%.




And a 10% drop in the market sees a similar loss, for a return of -1300%.  It's simply an amplification of the result. If someone did this mid last year, at one point they would have been down a quarter of a million. I'd hate to be down 250k and have to live with 10-20%/pa to make up for it. There was a rally this year, but what if there was not?

If they can lose a quarter of a million, it just doesn't seem appropriate to judge performance on the original $2k. If you can lose $500k, that is your capital, and how performance should be judged.

I see the investment strategy as carrying far greater risk, especially for the typical investor, and that the trader will quickly outperform the investor while using far less capital. I'm not suggesting investing isn't worthwhile to some, but I do see it as completely inferior to trading, as it's simply trading but on a far, far slower timescale, and often done far less intelligently (e.g. buy and hold).


----------



## Sir Osisofliver

Mr J said:


> How about that second year, third year or fourth year?  *The trader will outperform the investor who borrowed 500k within a short space of time.* Even in the first year, with 1/250th the capital, the trader manages to make roughly as much as the investor. I also have to question why someone with $500k borrowing power is starting with just $2k. If we bump that starting capital up to $10k, it's not even a contest, even if we improve the investing performance to 20%/pa.




Of course that is the power of compunding but the point you seem to be missing is that the trader is increasing his/her *income* for a great deal of hard work and effort (essentially as a full-time job) and the investor is increasing their net wealth with very little effort...*and can trade at the same time if they wish*. Time equals Money Mr J. By doing BOTH of these activities how much better off are you?

Roughly as much?  how does 1255% = 2907% 



> And a 10% drop in the market sees a similar loss, for a return of -1300%.  It's simply an amplification of the result. If someone did this mid last year, at one point they would have been down a quarter of a million. I'd hate to be down 250k and have to live with 10-20%/pa to make up for it. There was a rally this year, but what if there was not?



 So the lesson here is..... *Timing in investing is just as important as timing in trading*. I didn't do this in Mid last year I started buying in November 08 and was almost finished in May 09. Your argument above doesn't hold water as I didn't invest at that time and haven't gone backwards. 







> If they can lose a quarter of a million, it just doesn't seem appropriate to judge performance on the original $2k. If you can lose $500k, that is your capital, and how performance should be judged.



 How would the above portfolio have lost $250k? there was only a $260k investment. The market didn't drop back 90% when I wasn't watching did it?

The reason why it's appropriate is because I can very easily go to the bank and say I'd like to get a line of credit to invest in a long term share portfolio please. I can even, should I feel like it, go and get further borrowings through a margin lending facility (which I haven't used here in this example because further leverage usage blows the suggested performance level out to ridiculous levels).

I cannot go to the bank and say. I'd like to borrow $500,000 to do short term trading in the market please.... *shrug* maybe you can.

Trading you use *your own money* Investing in the manner I describe above, uses *other peoples money.* See the difference?


> I see the investment strategy as carrying far greater risk, especially for the typical investor, and that the trader will quickly outperform the investor while using far less capital. I'm not suggesting investing isn't worthwhile to some, but I do see it as completely inferior to trading, as it's simply trading but on a far, far slower timescale, and often done far less intelligently (e.g. buy and hold).




What greater risk?  Because more money is involved? More money = more risk management I don't see your point. BTW I think the "typical investor" has their head up their bum.

I'm not trying to make the argument that trading is better than investing or investing is better than trading. (that sounds way too much like my dad can beat up your dad for my liking). I simply wanted to challenge your notion that there is no value in investing.

Cheers

Sir O


----------



## mazzatelli

Sir Osisofliver said:


> Trading you use *your own money* Investing in the manner I describe above, uses *other peoples money.* See the difference?




Isn't the crux of this back and forth the appropriate use of leverage rather than trading vs. investing?


----------



## nulla nulla

mazzatelli said:


> Isn't the crux of this back and forth the appropriate use of leverage rather than trading vs. investing?




If you are going to leverage, don't leverage more than 30% in your portfolio. That is 70% your own capital and 30% borrowings. If it is good enough for the Infrastructure funds and REIT's it should be good enough for you also.


----------



## Mr J

Sir Osisofliver said:


> I simply wanted to challenge your notion that there is no value in investin




That's fine, but you're not really challenging it :. When I posted to clarify my position for you, I said that my opinion was directed to the typical investors. I still think that they are wasting their time, and that it's a game that only pays for those who are skilled.



> the point you seem to be missing is that the trader is increasing his/her *income* for a great deal of hard work




I'm not missing it, as I've said that trading will significantly outperform investing over time. Yes, at first the investor may receive a far better return for the effort put in, but over time that gap will narrow. At 30% a month, I'm sure a trader will quickly surpass the income of a $260k investment + ordinary job.

They are also two completely different situations, as I assume someone who borrows 500k to invest in the markets has another job. Someone who trades over short timeframes will usually not have a full-time job. If trading is their job, then I'd expect them to be able to get more than 10k together. As for someone who does *both*, well there's no debate to be had there.



> Time equals Money Mr J. By doing BOTH of these activities how much better off are you?




We're not talking about people who can do both, well at least I'm not.



> How would the above portfolio have lost $250k? there was only a $260k investment. The market didn't drop back 90% when I wasn't watching did it?




Sorry, I used the 500k figure. 130k then .



> Trading you use your own money Investing in the manner I describe above, uses other peoples money. See the difference?




I know the benefits of using other people's money, but when you borrow money to invest, it is not other people's money! It is simply an advance on your future income. If you lose it, you must pay it back.



> What greater risk? Because more money is involved? More money = more risk management I don't see your point. BTW I think the "typical investor" has their head up their bum.




The greater risk is that a 50% drop will turn the investor's $260k into $130k, while the same for the trader would be $2k to $1k. One has lost $130k, while the other has lost a grand. Now, I'll agree that a sharp investor would not lose at the same rate as the market, but it's still going to be significantly more than the trader in dollar terms. Yes, I'd agree with you about most investors, and that's who I refer to when I say "investing is a loser's game". I don't actually mean they'll lose, but they'll spin their wheels to gain a litte money, but a lot of frustration and emotional distress.



> I'm not trying to make the argument that trading is better than investing or investing is better than trading.




It's all trading to me, I just view "investing" as trading over a long timeframe, and if they don't sell or ride the market both ways, as stupid trading . Trading can't be better than itself, so it's just a matter of how well it is done.


----------



## Sir Osisofliver

Mr J said:


> That's fine, but you're not really challenging it :. When I posted to clarify my position for you, I said that my opinion was directed to the typical investors. I still think that they are wasting their time, and that it's a game that only pays for those who are skilled.




Ahh well I see why we are talking at cross purposes then.  I was talking to you and asking why YOU thought that investing was a mugs game.  You don't strike me as the typical investor or unskilled so I was curious as to why you held that belief, given that I assume you could do both activities with a degree of skill above the average investor. 







> I'm not missing it, as I've said that trading will significantly outperform investing over time. Yes, at first the investor may receive a far better return for the effort put in, but over time that gap will narrow. At 30% a month, I'm sure a trader will quickly surpass the income of a $260k investment + ordinary job.
> 
> They are also two completely different situations, as I assume someone who borrows 500k to invest in the markets has another job. Someone who trades over short timeframes will usually not have a full-time job. If trading is their job, then I'd expect them to be able to get more than 10k together. As for someone who does *both*, well there's no debate to be had there.



 But they are two very different activities, one being wealth creation and the other income generation. If you are going to do either of these things well, different advantages and disadvantages apply to both and knowing how to take advantage of those differences is important.







> We're not talking about people who can do both, well at least I'm not.
> 
> I know the benefits of using other people's money, but when you borrow money to invest, it is not other people's money! It is simply an advance on your future income. If you lose it, you must pay it back.



 I just want to correct a misconception here.  *Debt* is an advance on your future income. Borrow money to fund a holiday and you cannot sell your memories of holiday snaps to pay off the debt you incurred. A *liability* on the other hand is where you borrow money to fund the purchase of an asset that can be sold to extinguish the liability. This is why plenty of banks will lend you 90% of the value of an investment property, because the value of the asset will extinguish the liability incurred in acquiring the asset should you wish to. Whilst I don't disgree that if you lose the asset you will need to pay it back (whereupon it *becomes* a debt), risk is a part of investing and managing that risk a central component of investing well.  Just like the bank forces you to insure the investment property where they hold 90% of the equity in the asset, most "investors" should insure their share portfolio, but many lack the skills and knowledge to do so.







> The greater risk is that a 50% drop will turn the investor's $260k into $130k, while the same for the trader would be $2k to $1k. One has lost $130k, while the other has lost a grand. Now, I'll agree that a sharp investor would not lose at the same rate as the market, but it's still going to be significantly more than the trader in dollar terms. Yes, I'd agree with you about most investors, and that's who I refer to when I say "investing is a loser's game". I don't actually mean they'll lose, but they'll spin their wheels to gain a litte money, but a lot of frustration and emotional distress.



 See above. An Astute investor insures their shares as part of their risk management.







> It's all trading to me, I just view "investing" as trading over a long timeframe, and if they don't sell or ride the market both ways, as stupid trading . Trading can't be better than itself, so it's just a matter of how well it is done.




Once again I'll quote Buffet "My ideal holding time is forever" - this doesn't mean I miss out on making money in the downturns, but does mean that over time my wealth creation benefits from compounding effects that will create a passive income that I don't have to work for.

Cheers

Sir O


----------



## Mr J

> most "investors" should insure their share portfolio, but many lack the skills and knowledge to do so.




Which is precisely my point. They will borrow a large amount of money, and watch as their portfolio drops 40-50%. All to earn (assuming they achieve market returns) 10-12%, minus interest, fees and inflation. A very rocky road to earn an average of 5% or so per annum.



> but does mean that over time my wealth creation benefits from compounding effects that will create a passive income that I don't have to work for.




That's a worthy goal for most people.



> one being wealth creation and the other income generation




You may view them that way, but they're both wealth creation for me. I think we've talked about income versus wealth before. I can't recall our positions, so I will guess that you said income was how much we earn, while wealth is how much we use to build. My answer to this is that I reinvest almost all of my trading income, and will always do so. I would agree that trading can be an income for some (those who spend most of it), but for me it is mostly a tool to build wealth.


----------



## shortlist

Mr J said:


> You may view them that way, but they're both wealth creation for me. I think we've talked about income versus wealth before. I can't recall our positions, so I will guess that you said income was how much we earn, while wealth is how much we use to build. My answer to this is that I reinvest almost all of my trading income, and will always do so. I would agree that trading can be an income for some (those who spend most of it), but for me it is mostly a tool to build wealth.




Do you find compounding makes your trading significantly more efficient - more worthwhile than taking more long-term positions?

Update on my first week paper trading:

Earlier this week I opened five positions in the metals and mining sector. I made 8.7% on my first position, 10% on my second position, I *lost* 7.6% on my third position (got stopped out - set the SL too close to entry I think), I made 23% on my fourth position and my fifth position is still open (four days now). All gains/losses are percentages of the amount risked in each specific trade and also before brokerage fees and tax, of course.

In your opinion (or anyone's!) is this a fair start for a total newbie? Did I have too many open positions? Remember, this is the first week of paper trading with any seriousness and did involve using some basic TA and FA.


----------



## marknz88

A one week sample is not enough, espicially as this week has mostly been positive (i.e. most people blindly could have made some money)

You need to trade on paper for at least for 2 months worth to try and get a range of environments (i.e. uptrending, donwtrending, side ways markets)

Keep at it tho and see what your overall position is after say 2 months of trading to get a reasonable feel for how things might be (hopefully for your sake the next 2 months arent a bull market else you will get a fasl sense of secuirty)


----------



## shortlist

marknz88 said:


> A one week sample is not enough, espicially as this week has mostly been positive (i.e. most people blindly could have made some money)
> 
> You need to trade on paper for at least for 2 months worth to try and get a range of environments (i.e. uptrending, donwtrending, side ways markets)
> 
> Keep at it tho and see what your overall position is after say 2 months of trading to get a reasonable feel for how things might be (hopefully for your sake the next 2 months arent a bull market else you will get a fasl sense of secuirty)




Thanks for the encouragement Mark. I intend to "paper trade" for a few more weeks yet, not least because I anticipate some serious falls in the global stock markets over the next few months and I don't want to get caught up in that, especially as I have not even contemplated shorting.

I'm not sure I agree with the buying blindly statement though - I also selected a few shares randomly and they did not fair as well, which fortifies the argument for good research and analysis!

Thanks again mate & have a good weekend, SL.


----------



## Mr J

shortlist said:


> Do you find compounding makes your trading significantly more efficient - more worthwhile than taking more long-term positions?




It's not more worthwhile than long-term positions, because they can't be compared. Compounding is part of capital management, while taking long-term positions is part of strategy strategy. There's no reason you can't do both.



> In your opinion (or anyone's!) is this a fair start for a total newbie? Did I have too many open positions? Remember, this is the first week of paper trading with any seriousness and did involve using some basic TA and FA.




Don't worry about it, the sample is too small. An immense sample is needed to draw accurate statistical conclusions, but only a small sample is needed to draw reasonable conclusions from analysing methods and reasoning. I suggest you post trades and talk your way through them.


----------



## shortlist

Mr J said:


> It's not more worthwhile than long-term positions, because they can't be compared. Compounding is part of capital management, while taking long-term positions is part of strategy strategy. There's no reason you can't do both.
> 
> 
> 
> Don't worry about it, the sample is too small. An immense sample is needed to draw accurate statistical conclusions, but only a small sample is needed to draw reasonable conclusions from analysing methods and reasoning. I suggest you post trades and talk your way through them.




Thanks Mr J. I think posting weekly "paper trades" is a good idea, and so I'll call this week my first and I'll move on from here with an update on Fridays if I've done trading that week. My plan is slowly forming to one where I start with short-term trades, maybe some intra day trading, and see if I can get the ball rolling with some compounding and reinvestment. If things work out I could happily make longer trades.

Like I said above, I feel there are some "interesting times" coming to the markets in the next quarter, so now might not be the best time for someone with so little experience to get stuck in.


----------



## weird

shortlist said:


> Like I said above, I feel there are some "interesting times" coming to the markets in the next quarter




It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way--in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.


----------



## Mr J

shortlist said:


> Like I said above, I feel there are some "interesting times" coming to the markets in the next quarter, so now might not be the best time for someone with so little experience to get stuck in.




What better time to get into it?

As for timeframe, I'd suggest swing trading. It gives you more time to analyse and make decisions, and solidify your methodology, as well as lessening your potentional losses (which isn't a bad idea early on).


----------



## shortlist

Mr J said:


> What better time to get into it?
> 
> As for timeframe, I'd suggest swing trading. It gives you more time to analyse and make decisions, and solidify your methodology, as well as lessening your potentional losses (which isn't a bad idea early on).




I'm reading about swing trading right now in some books I got out my local library. It's all just a matter of time frame really, right? My plan is developing now to where part of my funds will be put in low-risk long-term blue chip equities for dividends, and part will be reserved for more speculative or small cap swing trading, with any profits from this constituent being transferred into the blue chips. It's all coming together!


----------



## tech/a

Think your basically punting.

You dont know if the way you trade will lead to profit.
Your basically going to be forward testing with no background result/blueprint and hard cash.

Hope you survive long enough to learn how to trade profitably.


----------



## Mr J

We're all punting tech.


----------



## tech/a

If I thought it was punting I wouldnt be trading.
A consistently advancing equity curve and a known blueprint to follow shows to me that my business of trading is successful due to sound business management not punting.


----------



## Julia

Mr J, you've made a lot of very authoritative statements in this thread.

As I recall your earlier comments a couple of months ago (ish) you conceded that you hadn't at that stage actually done any real trading with real money.

Are you able to share with us whether that is still the case?


----------



## shortlist

tech/a said:


> Think your basically punting.
> 
> You dont know if the way you trade will lead to profit.
> Your basically going to be forward testing with no background result/blueprint and hard cash.
> 
> Hope you survive long enough to learn how to trade profitably.




You think I'm punting?


----------



## alter1217

I was just reading some posts before and some people said *"traders don't contribute to society"*.

I intend to *disagree*.

Companies hand out shares and options to their executives and employees as part of their compensation. Companies also use shares as currency when acquiring other companies. Sometimes they also use their own shares to make purchases.

These shares would be worth a lot less if there was nobody you can sell them to and be stuck with collecting dividends until the company closes... This is where traders come in. *Traders provide liquidity.*

Who is going to drive down the price of an overvalued stock? Who is going to bring up the price of an undervalued stock?

That's right... traders.

EDIT:
my 2cents on trading: I've just got into shares since getting into commerce degree in Uni last year:

Trading shares is hard work, involves researching a whole lot poring through company reports, reading forums, newspapers... It would definitely be really nice to be able to stop trading when you have 1 million dollars and just collect 10% interest from some passive investment. This would only be possible if you feed your income into some long-term investment which is relatively risk-free compared to short-term trading, else you might get wiped by random events (like the gfc). 

IMO The secret to this is just to consume less. Don't buy new car, don't buy big house, don't buy plasma TV. Not until you generate enough income from your passive investment to quit your jobs.

A single mother who receives $25k in pension spends only $15000 on expenses and invests $10000 in a 10% investment. In 25 years she's a millionaire.


I've gotten 70% return this year on my initial $3600. It was hard work and I've made alot of mistakes (like cutting profit when MQG got up to $18. now I cringe every time I see it on the "top 20 stocks traded" list); I spend maybe 6 hours a week researching, looking at charts, etc, even though we're in the midst of a 'bull market' (and I bet everyone else here has done better than me). It surely pays better than working at mcdonalds though, which I've since quit since I'm so sick of facing crappy food all night.

P.S Yes, I do live with my parents, who loan me $50 a week interest free for lunch expenses, which I have to repay when I get a full time job. But I'm not buying lunch.


----------



## tech/a

shortlist said:


> You think I'm punting?




Unless you know how your going to swing the odds in your favor to create a positive expectancy then *YES*.

You have a plan---great.
How do you know your plan isnt a plan for disaster?
Many are (Plans).
Answer is you dont.
You'll only know after you have traded it for a few years or your broke.


----------



## shortlist

alter1217 said:


> I was just reading some posts before and some people said *"traders don't contribute to society"*.
> 
> I intend to *disagree*.
> 
> Companies hand out shares and options to their executives and employees as part of their compensation. Companies also use shares as currency when acquiring other companies. Sometimes they also use their own shares to make purchases.
> 
> These shares would be worth a lot less if there was nobody you can sell them to and be stuck with collecting dividends until the company closes... This is where traders come in. *Traders provide liquidity.*
> 
> Who is going to drive down the price of an overvalued stock? Who is going to bring up the price of an undervalued stock?
> 
> That's right... traders.
> 
> EDIT:
> my 2cents on trading: I've just got into shares since getting into commerce degree in Uni last year:
> 
> Trading shares is hard work, involves researching a whole lot poring through company reports, reading forums, newspapers... It would definitely be really nice to be able to stop trading when you have 1 million dollars and just collect 10% interest from some passive investment. This would only be possible if you feed your income into some long-term investment which is relatively risk-free compared to short-term trading, else you might get wiped by random events (like the gfc).
> 
> IMO The secret to this is just to consume less. Don't buy new car, don't buy big house, don't buy plasma TV. Not until you generate enough income from your passive investment to quit your jobs.
> 
> A single mother who receives $25k in pension spends only $15000 on expenses and invests $10000 in a 10% investment. In 25 years she's a millionaire.
> 
> 
> I've gotten 70% return this year on my initial $3600. It was hard work and I've made alot of mistakes (like cutting profit when MQG got up to $18. now I cringe every time I see it on the "top 20 stocks traded" list); I spend maybe 6 hours a week researching, looking at charts, etc, even though we're in the midst of a 'bull market' (and I bet everyone else here has done better than me). It surely pays better than working at mcdonalds though, which I've since quit since I'm so sick of facing crappy food all night.
> 
> P.S Yes, I do live with my parents, who loan me $50 a week interest free for lunch expenses, which I have to repay when I get a full time job. But I'm not buying lunch.




I wouldn't rise to anyone saying trading didn't contribute anything. What does stacking shelves in a supermarket contribute? What does driving a delivery truck contribute? What does working in a factory packing junk contribute? What does lecturing in a university contribute? I have done all these jobs and a lot more and the contribution is whatever is brought home at the end of the month. You work to contribute to your family. If work was simply an exercise in altruism no one would do it. Furthermore, a trader provides liquidity and also taxable revenue.


----------



## shortlist

tech/a said:


> Unless you know how your going to swing the odds in your favor to create a positive expectancy then *YES*.
> 
> You have a plan---great.
> How do you know your plan isnt a plan for disaster?
> Many are (Plans).
> Answer is you dont.
> You'll only know after you have traded it for a few years or your broke.




I don't know my plan isn't headed for disaster, but I'm happy with that because neither does anyone else. You only know your plan has worked up till this afternoon. 

Do you feel comfortable accusing someone of being a punter based on 62 posts which contain practically no details of his plan? You don't know me, my past experience, my capital base, my tolerance of risk, my capacity for learning or my knowledge of certain sectors' fundamentals. I am surprised at the comment.


----------



## shortlist

I add a word on punting in general. Mr J is right - we're all basically punting; your success is dependent upon how you mitigate risk. Over-reliance on a single source of information increases risk and therefore pushes you closer to pure punting. An understanding of certain fundamental global processes will push you further away from pure punting towards considered or calculated risk, etc. At this stage, and I am a newbie in this matter, of course, I would consider making a trde on the basis of a chart alone pure punting. 

The point being you would have to know what a trader was doing in terms of all this before you could correctly accuse him or her of being a punter.


----------



## >Apocalypto<

main key to success on 1min trading I have found is not over trading, as the commissions add up and not only eat into profits but rub salt into the losers!

Trading under 1 min is a real challenge, you have to be mentally focused non stop and process all data coming at u in the blink of an eye. 

the test that hits me is the need to cut bad trades fast, while not being over zealous in cutting one that just needs a little more time.


----------



## tech/a

> At this stage, and *I am a newbie *in this matter, of course, I would consider making a trde on the basis of a chart alone pure punting.




Clearly



> The point being you would have to know what a trader was doing in terms of all this before you could correctly accuse him or her of being a punter.




Yet as a pure chartist you consider me a punter.

"_I would consider making a trde on the basis of a chart alone pure punting."_
would you not-----" _have to know what a trader was doing in terms of all this before you could correctly accuse him or her of being a punter_".

You have no chance of being profitable unless you know why your trading will deliver you positive expectancy.


----------



## wayneL

1/ Is a casino patron punting? Why?

2/ Is the casino punting? Why?

The answers to these questions will give an insight into whether a pure chart trader is punting.

Some actually are punting .

Some actually aren't.


----------



## >Apocalypto<

wayneL said:


> Some actually are punting .
> 
> Some actually aren't.




damn straight


----------



## Boggo

wayneL said:


> 2/ Is the casino punting? Why?




No, I don't think it is Wayne, the casino has done its homework like tech/a has and they win 52% to 57% of the time, they know that their method is going to deliver them 2c to 7c of every dollar that is turned over in their establishment.

That's not punting, that's business, any other approach will fail eventually.
Do you think that Crown Casino itself is a punter/gambler with these figures...
_Net operating profit before tax and significant items has risen by 35.2% from $254.614 million in the previous corresponding period to $344.242 million. EPS declined to 33.74 cents. Return on Assets (ROA) rose from 3.38% to 6.51%._

The mug punter who changes his notes for chips has no idea of the outcome, the card counter however has done his homework and knows the potential outcome therefore cannot be called a punter (but he will get banned anyway if he starts to impinge on the 2% to 7% profit )


----------



## wayneL

Boggo said:


> No, I don't think it is Wayne, the casino has done its homework like tech/a has and they win 52% to 57% of the time, they know that their method is going to deliver them 2c to 7c of every dollar that is turned over in their establishment.
> 
> That's not punting, that's business, any other approach will fail eventually.
> Do you think that Crown Casino itself is a punter/gambler with these figures...
> _Net operating profit before tax and significant items has risen by 35.2% from $254.614 million in the previous corresponding period to $344.242 million. EPS declined to 33.74 cents. Return on Assets (ROA) rose from 3.38% to 6.51%._




LOL

Don't you see that that is precisely the point I was making? 

The patron is the gambler with negative mathematical expectancy.

The casino is a business that provides gambling entertainment with a positive mathematical expectancy.

And so it is with chartists.

Some are one, some are the other.

Tech/a is only one of many who have also done their homework.


----------



## It's Snake Pliskin

wayneL said:


> LOL
> 
> Don't you see that that is precisely the point I was making?
> 
> The patron is the gambler with negative mathematical expectancy.
> 
> The casino is a business that provides gambling entertainment with a positive mathematical expectancy.
> 
> And so it is with chartists.
> 
> Some are one, some are the other.
> 
> Tech/a is only one of many who have also done their homework.



Just for some semantic tickling of the senses: even though a business may have a positive expectancy, that positive expectancy is useless if there are no customers. So demand is an issue and something that is taken a punt on when opening up a business or taking over an existing business. Demand is never constant and tied to economic conditions.

But good points above.


----------



## tech/a

It's Snake Pliskin said:


> Just for some semantic tickling of the senses: even though a business may have a positive expectancy, that positive expectancy is useless if there are no customers. So demand is an issue and something that is taken a punt on when opening up a business or taking over an existing business. Demand is never constant and tied to economic conditions.
> 
> But good points above.




Sound business is to place yourself in front of demand,and remove yourself from markets which display little or no demand.(In of course the timeframe in which you do business.)


----------



## shortlist

>Apocalypto< said:


> main key to success on 1min trading I have found is not over trading, as the commissions add up and not only eat into profits but rub salt into the losers!
> 
> Trading under 1 min is a real challenge, you have to be mentally focused non stop and process all data coming at u in the blink of an eye.
> 
> the test that hits me is the need to cut bad trades fast, while not being over zealous in cutting one that just needs a little more time.




I could develop an interest in trading on this timescale, but for now I want to keep my risk amounts small and I also want to avoid leverage, so I am looking at longer time frames until I understand the process better.


----------



## shortlist

tech/a said:


> Clearly
> 
> 
> 
> Yet as a pure chartist you consider me a punter.
> 
> "_I would consider making a trde on the basis of a chart alone pure punting."_
> would you not-----" _have to know what a trader was doing in terms of all this before you could correctly accuse him or her of being a punter_".
> 
> You have no chance of being profitable unless you know why your trading will deliver you positive expectancy.




tech

I have never pretended to be anything other than a newbie. All my posts from the first have been quite open about this. Being a newbie in trading does not mean I am a newbie at everything else - including skills that will prove very useful in trading. One thing I have learnt in life is not to make a judgement before I have all the facts.

What grabbed my attention in your post was that you randomly labelled me as a punter without knowing the first thing about me, that's all. It was the implication that when you do it, it's qualified judgement based on sound technical analysis, and when someone else does it, it's punting. That's all I found odd - because you cannot possibly know what technical or generic input I will put into my trades when I am ready to start.


----------



## shortlist

It's Snake Pliskin said:


> Just for some semantic tickling of the senses: even though a business may have a positive expectancy, that positive expectancy is useless if there are no customers. So demand is an issue and something that is taken a punt on when opening up a business or taking over an existing business. Demand is never constant and tied to economic conditions.
> 
> But good points above.




Some good points in here too. It's probably wrong to see positive expectancy as an independent variable for the reasons you point out. Factors such as consistency/reliability, overheads, profit/loss ratio are all dependent on other external variables which are often induced by matters out of our control. 

And yes, tech, I find pure chartism slightly unsettling and will in time hope to demonstrate this as I gather more information. In fact I would suggest that pure chartism is impossible and that anyone claiming to operate by this method is making use of other sources such as basic fundamental information even if it is subconscious. 

But don't think I am ridiculing TA (I know others do). In the end, last week I paper traded 10 stocks, 5 of which were selected through my basic understanding of TA, and 5 of which were selected randomly, and the former sample performed considerably better than the latter. I am running the same trial this week but on different positions.


----------



## Nick Radge

> In fact I would suggest that pure chartism is impossible and that anyone claiming to operate by this method is making use of other sources such as basic fundamental information even if it is subconscious.




I'll take as much as you want on this...


----------



## shortlist

Nick Radge said:


> I'll take as much as you want on this...




Hi Nick

I'm not making a declaration here, really just starting to learn about it all. From a psychological perspective (I am not a trained psychologist) I wonder if it is possible to know nothing of the world at all when looking at a chart. You have significant general knowledge - the value of a dollar/the role of iron ore/the condition of the Australian economy - when you look at a chart. You cannot erase this information. 

Would you disagree?

I add in edit just to clarify that I am not opposed to TA. In fact I am really enjoying learning all about it from this site and books I have started reading. It fascinates me actually and I am wondering where it has been all my life! I'm just thinking that when I look at a chart I am bringing other pre-learnt knowledge into that chart just by looking at it.


----------



## lukeaye

LOL just LOL. I know more profitable T/A then Fundamentalists. Not to say you cant be profitiable from fundamental trading.

How many times have you heard a pure fundamentilist say, the price shouldnt be that low! or that price shouldnt be that high!

You will never see a technical trader in that position.

You will hear many profesional traders say, the technicals lead the fundamentals. If you dont believe me, look at the chart on boeing before 9/11it was in a very aggresive topping phases, somebody was selling the crap out of it, then came the fundamentals, 9/11. fundamentally there was no reason to sell but PURE technicals said otherwise


----------



## lukeaye

Sorry about this crappy chart dont have us stocks available. But as you can see here, the technicals lead on this PURE technicals. Just trying to prove a piont. if anyone has a better chart post away.


----------



## shortlist

lukeaye said:


> LOL just LOL. I know more profitable T/A then Fundamentalists. Not to say you cant be profitiable from fundamental trading.
> 
> How many times have you heard a pure fundamentilist say, the price shouldnt be that low! or that price shouldnt be that high!
> 
> You will never see a technical trader in that position.
> 
> You will hear many profesional traders say, the technicals lead the fundamentals. If you dont believe me, look at the chart on boeing before 9/11it was in a very aggresive topping phases, somebody was selling the crap out of it, then came the fundamentals, 9/11. fundamentally there was no reason to sell but PURE technicals said otherwise




Morning lukeaye

Just to clarify - I am learning TA. I consider it to be the primary system for profitable trading. What I am also saying is we all have prior knowledge which we bring to a chart when we read it.

*To tech*

Something tech said earlier about swinging the odds in my favour - I've been thinking about that tech. Are you talking about swinging the odds in your favour by purely technical means? The analysis of volume and moving averages, ascending triangles, double bottoms, and strategic technical or percentage stops, etc. In your opinion, are technical methods the only way of swinging the odds?


----------



## Timmy

lukeaye said:


> LOL just LOL. I know more profitable T/A then Fundamentalists.



The people you know may not necessarily be representative of the population of market participants.



lukeaye said:


> How many times have you heard a pure fundamentilist say, the price shouldnt be that low! or that price shouldnt be that high!
> 
> You will never see a technical trader in that position.



Stick around & you will hear many TAs bemoaning price moves that 'shouldn't' be happening/'shouldn't' have happened.  Especially when the move is/was enough to trigger his or her stop (ps. been there, done that).



lukeaye said:


> You will hear many profesional traders say, the technicals lead the fundamentals.



You will also hear many say that knowledge of good, accurate, fundamental info can be very helpful indeed to profitable trading.


----------



## shortlist

Timmy said:


> You will also hear many say that knowledge of good, accurate, fundamental info can be very helpful indeed to profitable trading.




For me it's the purist part that concerns me. I am *not* doubting the efficiency and usefulness of TA in any way. For private traders without access to high level information TA is our way of fighting back and making profitable trades. 

I'm just making the case that in my limited knowledge you bring other things to a chart when you read it. You understand broadly what's going on with copper, or you know what's going to happen when Tehran switches to calculating its oil fund value in euros rather than dollars (which happened a couple of days ago). This information must be able to assist any technical analysis you choose to execute? Only a purist could disagree, no?


----------



## Timmy

shortlist said:


> You have significant general knowledge - the value of a dollar/the role of iron ore/the condition of the Australian economy - when you look at a chart. You cannot erase this information.




Shortlist, there are technical traders who will buy or sell a company, after doing their analysis, without knowing anything more of the company than its three letter code (in the case of the ASX).  We all bring prior knowledge and experience to everything we do, but this would have to be an example of acting on technical analysis to the exclusion of all other info, as far as it is possible to do so.  Also, check out some of the threads in the FX section where the scalpers/short-termers trade purely on price action for another example.


----------



## prawn_86

shortlist said:


> For me it's the purist part that concerns me. I am *not* doubting the efficiency and usefulness of TA in any way. For private traders without access to high level information TA is our way of fighting back and making profitable trades.
> 
> I'm just making the case that in my limited knowledge you bring other things to a chart when you read it. You understand broadly what's going on with copper, or you know what's going to happen when Tehran switches to calculating its oil fund value in euros rather than dollars (which happened a couple of days ago). This information must be able to assist any technical analysis you choose to execute? Only a purist could disagree, no?




Going too far off topic here for my liking. There are countless threads debating TA vs FA, please move to one of them.

Lets keep this discussion to "do you have to daytrade to trade full time?"


----------



## tech/a

> To tech
> 
> Something tech said earlier about swinging the odds in my favour - I've been thinking about that tech. Are you talking about swinging the odds in your favour by purely technical means? The analysis of volume and moving averages, ascending triangles, double bottoms, and strategic technical or percentage stops, etc. In your opinion, are technical methods the only way of swinging the odds?




Theory and practice are poles apart.
As I read your and others musings I can personally relate to it all.Experience and application in my own trading has me clearly seeing where your coming from and even clearer I see where you have to go.

Like Nick I'm happy to wager any amount on your "technical hypothesis" and I wont be punting!
My/our expectancy is nicely positive---in the wager.

Pretty well 100% of my trades the only thing I know about the company is its code.The *ONLY* reason I'm trading it is the technicals.

So in my opinion trading purely technically makes trading terribly simple.
Sure you can be profitable trading without technicals but would argue only in bull markets.
Yes I can and have made $$s in bear markets even though I dont trade short!
Purely because I'm to slack to set up a CFD account for that purpose.
Should just short the index or SPI can do that with IB (sorry waffling).


----------



## Timmy

prawn_86 said:


> Going too far off topic here for my liking. There are countless threads debating TA vs FA, please move to one of them.
> 
> Lets keep this discussion to "do you have to daytrade to trade full time?"




Amen to that, Prawn.


----------



## shortlist

tech/a said:


> Theory and practice are poles apart.
> As I read your and others musings I can personally relate to it all.Experience and application in my own trading has me clearly seeing where your coming from and even clearer I see where you have to go.
> 
> Like Nick I'm happy to wager any amount on your "technical hypothesis" and I wont be punting!
> My/our expectancy is nicely positive---in the wager.
> 
> Pretty well 100% of my trades the only thing I know about the company is its code.The *ONLY* reason I'm trading it is the technicals.
> 
> So in my opinion trading purely technically makes trading terribly simple.
> Sure you can be profitable trading without technicals but would argue only in bull markets.
> Yes I can and have made $$s in bear markets even though I dont trade short!
> Purely because I'm to slack to set up a CFD account for that purpose.
> Should just short the index or SPI can do that with IB (sorry waffling).




Gday tech

Following prawn's advice, I'll swing this round to day trading and follow up your post at the same time. You say you make $$ in a bear market without shorting - so am I right in saying that you do this by making use of TA and very short timescales? For example, a stock could be on a general downward trend - consistent with a fundamental analysis of that stock's value to the market at any given time, but you make your $$ in short-term retracements on a day-trade basis or over a few days with information provided solely by TA?


----------



## skyQuake

tech/a said:


> Sound business is to place yourself in front of demand,and remove yourself from markets which display little or no demand.(In of course the timeframe in which you do business.)




People should take note of this post. Imo thats what trading is all about. Frontrunning demand to an extent.


----------



## Cartman

fundamental analysis is deciding which footy match u r gona go to on the weekend ---

technical analysis is putting your bet on a minute before kickoff --- its all about timing the market !


----------



## tech/a

skyQuake said:


> People should take note of this post. Imo thats what trading is all about. Frontrunning demand to an extent.




Its not that hard.

First table is before open 
Last table is a couple of minutes ago.
Analysis time 20 mins To set stops and place a few orders in line.

This should answer a few questions.Re Can it be done?
Yeh I'm at my day job!


----------



## >Apocalypto<

shortlist said:


> I could develop an interest in trading on this timescale, but for now I want to keep my risk amounts small and I also want to avoid leverage, so I am looking at longer time frames until I understand the process better.




shortlist,

trading on 1min is small risk amounts and low leverage. on IB I get 45:1 or 50:1 depending on what they deem right at the time. 

don't be fooled in thinking short term trading is all about high leverage


----------



## lukeaye

Depends what you want to do i guess, what are your strategies what style suits you. are you going to scalp? or buy "undervalued" stocks and keep them for the medium term, or you may have strategies which have you in a stock for short term say 20 days or something. 

If your scalping you do need to be infront of the screen 24/5 but a full time trader can spend 2 hours looking at stocks of interest and researching new stocks to see whats setting up. 

Set up alerts and then go do your thing. when they set up according to your strategies you enter your trade. you def dont have to sit in front of your comp gor 8 hours a day to be profitable.


----------



## Sean K

lukeaye said:


> Depends what you want to do i guess, what are your strategies what style suits you. are you going to scalp? or buy "undervalued" stocks and keep them for the medium term, or you may have strategies which have you in a stock for short term say 20 days or something.
> 
> If your scalping you do need to be infront of the screen 24/5 but a full time trader can spend 2 hours looking at stocks of interest and researching new stocks to see whats setting up.
> 
> Set up alerts and then go do your thing. when they set up according to your strategies you enter your trade. you def dont have to sit in front of your comp gor 8 hours a day to be profitable.



Good question. I'm a full time 'investor' but still watch the screen for most of the day/my night. Obviously not in the same way a TH... I might as well go to bed at 7.30 every night (your 10.30am).


----------



## lukeaye

I sit and watch the markets nearly all day as well, but im saying you dont have to, to be succesful.
I cant change my stock positions at 11.30 at night when wall street opens, but i like to watch the activity anyway


----------



## Mr J

tech/a said:


> If I thought it was punting I wouldnt be trading.
> A consistently advancing equity curve and a known blueprint to follow shows to me that my business of trading is successful due to sound business management not punting.




If we define punting as gambling, then we are punting. I've seen you state before that you don't gamble, but that's hard to argue since the definition of gambling is to place a stake on an uncertain outcome. The difference is not whether or not you are gambling, but whether you are gambling with a positive expectation, or a negative expectation.



Julia said:


> Mr J, you've made a lot of very authoritative statements in this thread.
> 
> As I recall your earlier comments a couple of months ago (ish) you conceded that you hadn't at that stage actually done any real trading with real money.
> 
> Are you able to share with us whether that is still the case?




Any statement I make is an opinion. It may be fact, it may not be fact. That said, if I state something as fact, I believe it as fact, and it usually is fact.

Not true. I have been trading since I started posting here, and by now I have more screen time than most people here who don't day-trade.

Of course. Almost everything I've discussed in this thread relies on theory (i.e. knowledge), not market experience. I am experienced in related fields, and much of the theory carries over. Some here don't recognise this, but that is their problem, not mine.



wayneL said:


> 1/ Is a casino patron punting? Why?
> 
> 2/ Is the casino punting? Why?
> 
> The answers to these questions will give an insight into whether a pure chart trader is punting.




Both are gambling. Whether or not an individual agrees depends on whether they use the correct definition of gambling, or the popular definition. I won't argue this any further, as most people refuse to look the word up in the dictionary. I may look at it this way because I come from a gambling background, while many traders will want to distance themselves from the negative connotation of gambling. In the end it doesn't really matter, as long as the trader understands the underlying mathematics.



			
				shortlist said:
			
		

> And yes, tech, I find pure chartism slightly unsettling




Is it because you think of charts as magical, squiggley lines? Think of charting as the study of movement of price. Now consider that trading is an action that has the goal of capturing price movement. A chart is simply a visual representation of price movement. The movement is caused by the market, which is made up of people. People do not act randomly, and are often predictable and with emotion. Therefore, a chart is just a visual representation of this non-random, often predictable and emotional action.



			
				Timmy said:
			
		

> Stick around & you will hear many TAs bemoaning price moves that 'shouldn't' be happening/'shouldn't' have happened.




It depends why they are saying this. It may be an emotional reaction to a trade that didn't work out, it may be a result of placing too much confidence in T/A (it's about probability, not certainty), or it may be a comment on irregular market movement, i.e. manipulation.



			
				lukeaye said:
			
		

> If your scalping *you do need* to be infront of the screen 24/5 but a full time trader can spend 2 hours looking at stocks of interest and researching new stocks to see whats setting up.




Was that a typo? If not, then why would you think that? It will vary greatly between traders, even if they operate on the same timeframe.



> I sit and watch the markets nearly all day as well, but im saying you dont have to, to be succesful.




Definitely agree with this. 



> Set up alerts and then go do your thing




Also with this. I've started doing this after being realising I am too easily distracted from trading.


----------



## Timmy

Mr J said:


> It depends why they are saying this.



What "depends why they are saying this"?


----------



## wayneL

Mr J said:
			
		

> Both are gambling. Whether or not an individual agrees depends on whether they use the correct definition of gambling, or the popular definition. I won't argue this any further, as most people refuse to look the word up in the dictionary. I may look at it this way because I come from a gambling background, while many traders will want to distance themselves from the negative connotation of gambling. In the end it doesn't really matter, as long as the trader understands the underlying mathematics.




I knew some pompous pedant would come along with this argument.

If we are going to be pedantic about the definition of gambling, then every mercantile endeavour is a gamble. But TBH, I think you are confusing taking a gamble with taking risk.

gam⋅ble  [gam-buhl]  Show IPA verb, -bled, -bling, noun
Use gamble in a Sentence
–verb (used without object)
1.	to play at any game of chance for money or other stakes.
2.	to stake or risk money, or anything of value, on the outcome of something involving chance: to gamble on a toss of the dice.
–verb (used with object)
3.	to lose or squander by betting (usually fol. by away): He gambled all his hard-earned money away in one night.
4.	to wager or risk (money or something else of value): to gamble one's freedom.
5.	to take a chance on; venture; risk: I'm gambling that our new store will be a success.
–noun
6.	any matter or thing involving risk or hazardous uncertainty.
7.	a venture in a game of chance for stakes, esp. for high stakes.


I think you will find however, that providers of gambling entertainment have somewhat predictable outcomes. This is how they can list as public companies and have their shares valued.

Likewise, my risk adjusted returns have been pretty much in a narrow range since I started trading full time.

Pompous pedants will insist that is still gambling. Those more sensible will relax the need for semantic purity and go with the context intended.


----------



## mazzatelli

Mr J said:


> I won't argue this any further, as most people refuse to look the word up in the dictionary




Its semantics.

Refer to the section "Other forms of gambling"


----------



## tech/a

*Mazza*

Just let me know when your having your next pool party will you.
If that collection of Honeys you keep displaying are at your place I'm there!


----------



## mazzatelli

tech/a said:


> *Mazza*
> 
> Just let me know when your having your next pool party will you.
> If that collection of Honeys you keep displaying are at your place I'm there!




lol, you're always welcome tech!
But I cannot guarantee I can maintain the quality, IOW your decision to attend would be gambling 
BUT wait - there is positive expectancy...


----------



## Mr J

Timmy said:


> What "depends why they are saying this"?




There are different reasons someone would suggest that a movement should not have occured, and some could be legitimate.



			
				wayneL said:
			
		

> If we are going to be pedantic about the definition of gambling, then every mercantile endeavour is a gamble. But TBH, I think you are confusing taking a gamble with taking risk.




It's not pedantic, it's accurate, and you're the one furthering the discussion. I don't bother going more than one post into this topic because I know the argument never ends. Like I said in the previous post, ultimately what matters is that the trader understands the underlying mathematics, even if they don't acknowledge it as gambling.

No, I'm not confusing risk and gambling. In your post, it is clearly stated that gambling is placing a stake on an uncertain outcome. This can be interpreted to include any action we take, but in even its most literal sense it still includes trading.

Mazzatelli, there's no use pointing to a wiki page regarding this topic. Wiki is hardly a definitive source, and gambling is a widely misunderstood term and topic. Like I've said though, I'm not going to go further into it. There is no reward in this never-ending argument, and I only bother to point it out once.


----------



## wayneL

I suppose Tabcorp is a gambler too then.


----------



## lukeaye

I didny say all traders, but i know of many traders who only spend 2 hours trading a day, and still have posisitve results.

once again depends on what you want to do. i know with options trading, i spend far less time then i do with my cfd trades. It differes with everyone is what im trying to say.

but like anything the more time and effort you put into something the better results you get. perfect practice makes perfect. of course if your doing the wrong thing the more time you spend the more you will lose, thus why i say perfect practice.

PS. off topic is anyone who is holding longs, as scared as i am that if wall street doesnt break 9860 tonight its gonna roll?


----------



## Mr J

In more ways that one. They cater to gamblers, but also because the take calculated risks in business. Surely your problem is with the term 'gambling', not with the action? You're simply using your definition and applying them to my argument, which is quite silly.


----------



## nunthewiser

for all YOU gamblers 

http://www.youtube.com/watch?v=uzfCgycpoqs


----------



## tech/a

> PS. off topic is anyone who is holding longs, as scared as i am that if wall street doesnt break 9860 tonight its gonna roll?




*And herein is where the difference lies.*

Profitable traders dont give a crap.
Tommorow is of no concern.
My bottom line is all that matters.
I know how to maintain an ever expanding bottomline.
So what happens o/n is of no consequence---or the day after or after that.


----------



## lukeaye

tonights action affects my plan for tomorrow, so yes i give a crap.

It will in know way affect my bottom line at all. but knowing the current action can tell me how to react. the more time i have the better


----------



## weird

lukeaye said:


> PS. off topic is anyone who is holding longs, as scared as i am that if wall street doesnt break 9860 tonight its gonna roll?




The Dow ? De nada.


----------



## Mr J

tech/a said:


> *And herein is where the difference lies.*
> So what happens o/n is of no consequence---or the day after or after that.




Overnight matters to someone who takes overnight positions. The vast majority of people on this site do not restrict themselves to intraday trading.


----------



## tech/a

> The vast majority of people on this site do not restrict themselves to intraday trading.




Yeh I'm one of those.



> Overnight matters to someone who takes overnight positions




The same then as it matters to someone who takes daytime positions I would imagine.(During the day)


----------



## It's Snake Pliskin

> Sound business is to place yourself in front of demand,and remove yourself from markets which display little or no demand.(In of course the timeframe in which you do business.






skyQuake said:


> People should take note of this post. Imo thats what trading is all about. Frontrunning demand to an extent.




And it added to the discussion to reveal what is important. Good comments.


----------



## Bobby

I'm just trading Index's at the moment , still hold a portfolio but like the quick action & time frame that happens with this form of trading .

I place a contradictory contract to cover when going over normal ,  thats set  to trip but give's protection so not to stuff up the real positions .

Stops are now triple to bugger the BS spikes & setups are sort with greed ,  :   

Best part I can relax & get half pissed whilst still trading .  !


----------



## shortlist

Mr J said:


> Is it because you think of charts as magical, squiggley lines? Think of charting as the study of movement of price. Now consider that trading is an action that has the goal of capturing price movement. A chart is simply a visual representation of price movement. The movement is caused by the market, which is made up of people. People do not act randomly, and are often predictable and with emotion. Therefore, a chart is just a visual representation of this non-random, often predictable and emotional action.




LOL. I do not think of charts of any kind as magical, squiggley lines. I would amend one of sentences to say that "A chart is simply a visual representation of price movement *in the past*."

I am not doubting the use of charts, and I am enjoying learning TA so much from a purely technical perspective that I wish I had started all this years ago. My point is I for one will cast an eye over certain geopolitical fundamentals before deciding which charts to look at, if that makes sense. I would agree that charts represent non-random action, but they represent non-random action that has already happened. We infer patterns and project them into the future, and this is where the "gambling" starts. We can minimise the risk by knowing certain things that won't show up in charts for months.


----------



## nomore4s

shortlist said:


> We can minimise the risk by knowing certain things that won't show up in charts for months.




You might actually find things show up in the charts before alot of info is made public or common knowledge.


----------



## tech/a

> We can minimise the risk by knowing certain things that won't show up in charts for months.




Or maximise profits by knowing certain things that are anticipated before they show up in charts.
Recognising opportunity.
Knowing how to take advantage of it.
Actually DOING IT---rather than Hypothesising.

I post the table below not as a gloat but as a reminder of how 
*Placing yourself in front of demand *regardless of what "markets" may or may not do is simply profitable.

You'll remember what the holdings opened at yesterday if not refer to last pik.
Taken a few minutes ago.
You may notice the culling of losers very quickly and the holding of winners as long as they are in the blue.

*It aint that hard.*


----------



## AlterEgo

shortlist said:


> We can minimise the risk by knowing certain things that won't show up in charts for months.




How? I think that would be called 'insider trading'.

All information that's publicly available will already be factored in to the share price. Just how do you think you are going to find out some info on a company that very few others know about?


----------



## Mr J

shortlist said:


> I would amend one of sentences to say that "A chart is simply a visual representation of price movement *in the past*."




And since price is not random, past price movement can give as enough of an indication of future price movement to push the probabilities in our favour.



> We infer patterns and project them into the future, and this is where the "gambling" starts. We can minimise the risk by knowing certain things that won't show up in charts for months.




There are two ways to find an edge in the market: to have information the market doesn't have, or to better interpret information that the market does have. The first applies to very few of us, so the vast majority of us will rely on making better use of information that is already known to the market. If it is known to the market, it will be priced in and reflected on the chart.



> We infer patterns and project them into the future




You'd be surprised how reliable these 'patterns' are. Price action repeats over and over and over again. It is gambling, but that is why we pay attention to risk management. It's no less of a gamble if we were to trade by fundamental analysis.


----------



## nunthewiser

AlterEgo said:


> All information that's publicly available will already be factored in to the share price. Just how do you think you are going to find out some info on a company that very few others know about?




 " The Geraldton Guardian " 

been numerous occasions where local listed companies have made the local news paper in regards to various important news but only made the asx pages days and sometimes weeks later 

eg . years back MGX finally recieved there train carruiages . the price got smacked cos of the delays . was mentioned in the guardian a week b4 the asx . was a "sure thing " punt the news of the recievals got taken well when announced on asx but for " locals ; it was old news 

AVA . was written in local papers cabinet was rethinking its desicion on powerlines ........ got anns on ASX a week /cupla days later and ran 30+% even tho "locals "had it as old news 

the AVA one best example , have a look in MGX thread for the date i posted the local news then check the ASX anns 

lots of news available publically before the asx gets it on occasion . just gotta research a bit harder OUTSIDE the square to find it


----------



## shortlist

Mr J said:


> There are two ways to find an edge in the market: to have information the market doesn't have, or to better interpret information that the market does have. The first applies to very few of us, so the vast majority of us will rely on making better use of information that is already known to the market. If it is known to the market, it will be priced in and reflected on the chart.
> 
> 
> 
> You'd be surprised how reliable these 'patterns' are. Price action repeats over and over and over again. It is gambling, but that is why we pay attention to risk management. It's no less of a gamble if we were to trade by fundamental analysis.




Yes, I'm starting to see all this. I said last week I would post any gains/losses on my paper trading journey. Week 2 was harder than Week 1 -and I think this is a fair reflection of where the markets are heading in general. S&P 500 is going south, oil - pretty much the biggest traded commodity is down something like 10% in a few days. BDYI still contracting. I also feel G20 in PA will be a watershed moment leading towards the second half of a double dip recession and major turbulence in Q4 and beyond.

In all I opened 10 position (not all at the same time). 9 were in resources and 1 in tech. Of risk amount I lost 12%, 22% and 14% of three positions, and I made 2.5%, 6.6%, 3.3%, 7.5%, 15%, 3.6% and 24% from the other seven positions. In sum and due to the varying sizes of the positions I came out just above water with a small four figure profit. 

Next week, looking forward to putting into practice some of the things I learnt this week, though overall very cautious about the markets now.


----------



## shortlist

nunthewiser said:


> " The Geraldton Guardian "
> 
> been numerous occasions where local listed companies have made the local news paper in regards to various important news but only made the asx pages days and sometimes weeks later
> 
> eg . years back MGX finally recieved there train carruiages . the price got smacked cos of the delays . was mentioned in the guardian a week b4 the asx . was a "sure thing " punt the news of the recievals got taken well when announced on asx but for " locals ; it was old news
> 
> AVA . was written in local papers cabinet was rethinking its desicion on powerlines ........ got anns on ASX a week /cupla days later and ran 30+% even tho "locals "had it as old news
> 
> the AVA one best example , have a look in MGX thread for the date i posted the local news then check the ASX anns
> 
> lots of news available publically before the asx gets it on occasion . just gotta research a bit harder OUTSIDE the square to find it




I haven't been to Geraldton for over a quarter of a century....! However, I now find myself reading their online newspaper - you're going to spoil it now and tell me the good stuff is restricted to the printed copy, right?


----------



## nunthewiser

shortlist said:


> I haven't been to Geraldton for over a quarter of a century....! However, I now find myself reading their online newspaper - you're going to spoil it now and tell me the good stuff is restricted to the printed copy, right?





yep actually 

AVA news did not appear in online version until MUCH later . was in printed version . only certain stuff goes in the online bit . always been that way . i THINK you can subscribe for full paper via electronic version . unsure ..... 

i can read todays paper to ya word for word if you wish 

today we have barry humfrey on the front page calling for action ! , theres a wheelbarrow racer ready for his perth run , oh and theres a new statue on the forshore 

addition ...........

ok just checked online and its still on wednesdays and mondays news by the looks .....


----------



## shortlist

nunthewiser said:


> yep actually
> 
> AVA news did not appear in online version until MUCH later . was in printed version . only certain stuff goes in the online bit . always been that way . i THINK you can subscribe for full paper via electronic version . unsure .....
> 
> i can read todays paper to ya word for word if you wish
> 
> today we have barry humfrey on the front page calling for action ! , theres a wheelbarrow racer ready for his perth run , oh and theres a new statue on the forshore
> 
> addition ...........
> 
> ok just checked online and its still on wednesdays and mondays news by the looks .....




Got it - invest in wheelbarrows


----------



## shortlist

AlterEgo said:


> How? I think that would be called 'insider trading'.
> 
> All information that's publicly available will already be factored in to the share price. Just how do you think you are going to find out some info on a company that very few others know about?




Who said the info was on a company? I'm talking about inferring information from certain international political indicators in the public realm if you know where to look that most people just don't look at. This would be of more use in trading commodities than equities, I'll admit, but it's still worth looking at.

An example might be Obama. It was clear to me Obama would be president months before he was even selected as the nominee. From this it is easy to infer likely moves in pharma companies because of his inevitable healthcare overhaul. I'll admit this is long-term stuff and of no use to someone who buys and sells in a few seconds, but I consider it a handy tool in the box.

Thinking about it this is a bad example because it was clear the GOP were exiting stage right for a long time, but I'll think of a few more over lunch.


----------



## prawn_86

Shortlist,

The market prices all these things in. If it is so 'clear' to you, then it is clear to other people as well. Plus trying to invest long term based on macro indicators means nothing to individual stocks, due to the fact they have other more pressing micro concerns.

If you want to be successful do not confuse economics with the stock market 

And once again this thread has gone off track. Any further off topic posts will be removed.


----------



## shortlist

prawn_86 said:


> Shortlist,
> 
> The market prices all these things in. If it is so 'clear' to you, then it is clear to other people as well. Plus trying to invest long term based on macro indicators means nothing to individual stocks, due to the fact they have other more pressing micro concerns.
> 
> If you want to be successful do not confuse economics with the stock market
> 
> And once again this thread has gone off track. Any further off topic posts will be removed.




Gday Prawn

If information in the Geraldton Guardian can be used to one's advantage before the ASX gets hold of it, I see no reason why certain other specialist knowledge cannot be used to make decisions long before it has even come to the market's attention. But like I said, this can only really work over the long-term and clearly would be of no use in terms of day trading, which is what this thread is nominally about so I'll move along!


----------



## AlterEgo

shortlist said:


> An example might be Obama. *It was clear to me *Obama would be president months before he was even selected as the nominee. From this it is easy to infer likely moves in pharma companies because of his inevitable healthcare overhaul. I'll admit this is long-term stuff and of no use to someone who buys and sells in a few seconds, but I consider it a handy tool in the box.
> 
> Thinking about it this is a bad example because it was clear the GOP were exiting stage right for a long time, but I'll think of a few more over lunch.




The only problem with this is that if something is clear to *you*, no doubt it'd be clear to everyone else too, and therefore should be already priced in to the market. There are thousands of professional market analysts (and market insiders) out there - what makes you think you'll be able to analyze the situation better than they can? To have an edge over these people, you need to know something that they don’t, and it’s very doubtful that you’ll find out some info that they’ve missed. Chances are that they will have heard the news long before you do.


----------



## Mr J

> To have an edge over these people, you need to know something that they don’t




No we don't. We may be able to better use that information (such as superior ability to read the market), or maybe we play a completely different game (such as trading a shorter timeframe).


----------



## AlterEgo

Mr J said:


> No we don't. We may be able to better use that information (such as superior ability to read the market), or maybe we play a completely different game (such as trading a shorter timeframe).




True, but I was referring to having an edge over them in F/A information. With shorter term trading we have an advantage over the big players as we're not moving the large sums of money that they are.


----------



## shortlist

Mr J said:


> No we don't. We may be able to better use that information (such as superior ability to read the market), or maybe we play a completely different game (such *as trading a shorter timeframe*).





That would be the key - exploiting the greater volatility in small timeframes. That's one way to get an advantage - trading in, sometimes, a matter of seconds or minutes. For this pure TA should work fine. 

AlterEgo - you presume "others" must know more than you or I, and I would suggest this depends very much on their specialisms - you should have more confidence in yourself - you probably know more than a lot of "they" do!


----------



## tech/a

Bloody hell you guys.
You make it look and sound so hard.

Dont do any of the stuff your on about.
Why would you?
Do you REALLY think all thats necessary?

I certainly dont.


----------



## prawn_86

tech/a said:


> I certainly dont.




Yep, and your way is the *only* way to make money...


----------



## tech/a

prawn_86 said:


> Yep, and your way is the *only* way to make money...




When you boil down what it is that makes the $$s 

*IT IS.*

Those that trade profitably---consistently do as I do.
Wether they know it or not.

Its NOT the How its the WHY.:kiffer:


----------



## prawn_86

So those that scalp, invest for dividends, use fundamentals etc etc all dont make any money?? Obviously not, because they dont do exactly what you do.

You may know a few things about trading, but sometimes you really need to get over yourself and realise that there are countless methods out there for making money.


----------



## tech/a

prawn_86 said:


> So those that scalp, invest for dividends, use fundamentals etc etc all dont make any money?? Obviously not, because they dont do exactly what you do.




Yes they do. If they are consistently profitable.



> You may know a few things about trading, but sometimes you really need to get over yourself and realise that there are countless methods out there for making money.




Keep telling you its not the how its the why.

You and countless others need to look at trading differently to the 90% that fail.

There are countless *THEORIES* on making money but only a few ways to be consistently profitable whether that be trading or ANY other business.


----------



## Mr J

AlterEgo said:
			
		

> True, but I was referring to having an edge over them in F/A information. With shorter term trading we have an advantage over the big players as we're not moving the large sums of money that they are.




We can still be better at utilising the info. We really go up against institutional traders anyway, not their analysts. At the end of the day, institutions are made up of mere mortals, and I see no reason why a very sharp retail trader couldn't beat them at F/A. Anyway, trading is about the market, not the instrument.



> With shorter term trading we have an advantage over the big players as we're not moving the large sums of money that they are.




Size isn't our only advantage, but it doesn't really matter. We're playing a different game, and when we are actually up against institutional traders, who is to say that they are better?



			
				tech/a said:
			
		

> You and countless others need to look at trading differently to the 90% that fail.




It would also help to look at the 10% that succeed.


----------



## nunthewiser

LOL 

hasnt this thread taken a funny turn 

i would love to discuss that im sitting here actually thinking maybe those that brag the loudest maybe just know how to talk the talk instead of walking the walk , but that would turn this thread into WW3 .... oh yes we all seen the "statements" ... LOL i seen one naked shorts knocked up too ...... anyways ...............

i have a plane to catch , so guess i,ll just have to catch up on the next exciting episode when i find a sober moment

have a great long weekend and go the saints!

p.s this is the internet , full of allsorts of claims and bignoting ........ Trading is a learning journey and personally think ANYONE that tells you they they have nothing left to learn is either 
a. full of it 
b. not trading 
c. got an ego that will not let themselves admit they are full of it 

i do understand there may be ramifications to this post , but these are MY thoughts and think they are just as valid as many other thoughts and statements here .


----------



## prawn_86

Mr J said:


> Nun: I have not traded for a year, and I started with far less than $50k. I'm well aware that I don't have much credibility until I can back up these comments with results. Take my statements with a grain of salt, or see some sense in them if you wish.






Mr J said:


> What's your point? To suggest that it's hard to make a career out of 10-20k? Sure. 50k? I consider that very adequate. 10-20k can  get it done if we don't have to worry about paying bills (i.e. you have plenty saved for expenses, partner paying bills etc).
> 
> As for myself, I don't daytrade for a living fulltime, I just daytrade fulltime. I want to make a living, but I need more success before I'm comfortable making that claim.






tech/a said:


> $500 to Joe if you can show 12 mths trading statement returning an income of $50K + ---any less and thats hardly a career.(Not a one off win but some sort of consistancy.)
> Near impossible in my view,I'm sure I'm not the only one who would like to see a 20-50k capital base returning a career!




Showing these quotes you can see why im confused. You havn't traded for a year? Yet your claiming you can 'easily' make >100% consistently


----------



## Mr J

> You havn't traded for a year?




No I have not.



> Yet your claiming you can 'easily' make >100% consistently




I'm confused to why you're confused, unless you are referring to posts that I don't remember and that you aren't quoting. I can't see in those quotes where I claimed that I could make >100% consistently. I suspect that people skim over my posts and misunderstand them due to my style of writing. 

Your impression is actually a blend of two statements I'd made, the first being that a good trader can make >100% p/a and the second being that I suggested trading was easy. The first can be proven mathematically, and the second can't be argued with since it is a subjective statement. Nobody else can say whether or not I find trading easy.


----------



## tech/a

Another quality post *Nun*.
Lots of opinion and zero input on the topic.
Like 90% of your posts.

*J*

You've got more ideas than a mattel advertisement.
Rather than postulating why don't you get some real facts before entering discussion?

*shortlist.*

How do you know your "plan" will or even could be profitable.
What will you have in place that will ensure success?
You need to know *WHY*.
You *think* superior knowledge/understanding is WHY--its not.

*Prawn*
Rather than shooting everyone on the thread how about some input from you?
More over start THINKING about what I'm getting at not thinking like a muppet.

I'm not going to lay it out as step by step guide but those that "Get it" will have found it and those that have got it---understand.
Everytime you work on your plan and you know why the way you design your plan will be successful---you'll cut out the copious rubbish you DONT NEED to know.
Included in that rubbish is the misguided mindset that you need to be in some way better informed or better equiped in economics to succeed.
Have greater ability than a building of analysts.

If a Duck can profit consistently anyone can!


----------



## Mr J

tech/a said:


> Rather than postulating why don't you get some real facts before entering discussion?




I could say the same to you. We all make statements, and these statements are only opinions. If you have an issue with a specific statement, feel free to question it specifically.


----------



## tech/a

Mr J said:


> I could say the same to you. We all make statements, and these statements are only opinions. If you have an issue with a specific statement, feel free to question it specifically.




Anyway spent enough time on this circular never ending thread of hypothesis.

I'll leave then with this.

*Human beings, who are almost unique in having the ability to learn from the experience of others, are also remarkable for their apparent disinclination to do so. *


----------



## nomore4s

Mr J,

What do you consider to be a sufficent income?

I find it hard to believe with a small capital base of around $50K anymore then 1% of traders could draw a decent wage that would be able to provide enough to both live on and continue to grow your capital base sufficently.

Even returning 100% on your capital it would be very hard, by the time you take tax, living expenses, business expenses, savings, money put aside for holidays (bearing in mind there will be no income during this period), sick days (there will be times you will be too sick to trade), and there will also be things like childern, mortgages etc, which could throw unexpected things up. Also there is the premium you will need to cover things like needing to constantly pull an income from the markets, how hard it will be to get things like home loans etc and the buffer of taking an unexpected hit.

While 50k a year is an okay wage it is just that nowadays - only an okay wage. You can comfortably live on it but it is very hard to grow a business off of that sort of capital/turnover.

IMO earning 50k off an employer where you don't have the stresses & worry of keeping the business profitable and you have some form of security compared to earning 50k working for yourself in a business like trading where one unforeseen event could wipe out a fair chunk of your capital is poles apart.

I would personally need to be able to earn a minimum of $150k pa to make trading fulltime worth it. And even then I wouldn't really want to rely on it as my sole form of income.


----------



## Mr J

tech/a said:
			
		

> Another quality post Nun.
> Lots of opinion and zero input on the topic.
> Like 90% of your posts.




It's too bad you feel that way, as Nun's posts always contain a nice, simple point that most of us have overlooked.



			
				Tech/a said:
			
		

> Human beings, who are almost unique in having the ability to learn from the experience of others, are also remarkable for their apparent disinclination to do so.




Tech, you may be experienced and have a lot to offer, but you seem to have a problem appreciating views other than your own.



			
				nomore4s said:
			
		

> What do you consider to be a sufficent income?




For basic living, 25k. For comfortable living, 40k would be sufficient. I plan to reinvest most of my profits though, so I would be shooting for a much higher income, even though I don't need it.



> I find it hard to believe with a small capital base of around $50K anymore then 1% of traders could draw a decent wage that would be able to provide enough to both live on and continue to grow your capital base sufficently.




It may be a struggle, it may not. Someone with 20k of expenses (the amount of my basic needs) is going to fare much better than someone with a family and mortgage (who probably shouldn't be attempting it with just 50k).



> Even returning 100% on your capital it would be very hard




It may be for many, I do not know. I do know that a good trader can earn far in excess of 100% a year before expenses are considered. Expenses are a problem, so obviously it helps to have another income or support. I didn't say most could do it, just that it was doable.



> I would personally need to be able to earn a minimum of $150k pa to make trading fulltime worth it. And even then I wouldn't really want to rely on it as my sole form of income.




We all differ.


----------



## tech/a

> simple point that most of us have overlooked




And if this is so it is deeply buried.
I might add that missing simple points is not limited then to Nun's posts.You and others look squarely at the Duck and not the content. True you may not/probably dont, understand it (The content).



> but you seem to have a problem appreciating views other than your own.




Oh I see the views------

I will not entertain nor discuss Views/Ideas/Theories or Hypothesis which I know are flawed/ill informed/un researched or plain wrong.

In doing so I will and do come across at times as Rude/Blunt and Arrogant.

Time and money will be your best teacher.
I have concluded
*Not I.*


----------



## Sean K

tech/a said:


> I will not entertain nor discuss Views/Ideas/Theories or Hypothesis which I know are flawed/ill informed/un researched or plain wrong.
> 
> In doing so I will and do come across at times as Rude/Blunt and Arrogant.
> 
> Time and money will be your best teacher.
> I have concluded
> *Not I.*



You're right as always tech.



Hooly Dooly!!!


----------



## Mr J

> And if this is so it is deeply buried.




It's clear to me, it's just casually stated.



> I might add that missing simple points is not limited then to Nun's posts.You and others look squarely at the Duck and not the content. True you may not/probably dont, understand it (The content).




You're quick to criticise. You claim I miss the point of posts when you have just done that yourself. Sure, I have my flaws, but you also have yours.


----------



## wayneL

tech/a said:


> Oh I see the views------
> 
> I will not entertain nor discuss Views/Ideas/Theories or Hypothesis which I know are flawed/ill informed/un researched or plain wrong.
> 
> In doing so I will and do come across at times as Rude/Blunt and Arrogant.
> 
> Time and money will be your best teacher.
> I have concluded
> *Not I.*




Tech,

The thing is that your Views/Ideas/Theories/Hypothesis have undergone an evolution/metamorphosis over the years. I dare say this is still an ongoing process. 

E.G. Once upon a time I mentioned taking low risk entries, which you argued against the existence of; subsequently you preached low risk entries on this very forum.

What hasn't changed is the self described rudeness/bluntness/arrogance. But people have memory. 

Disclaimer: We are all our own unique form of muppet. Even you, even me.


----------



## Bobby

wayneL said:


> Disclaimer: We are all our own unique form of muppet. Even you, even me.




You always make me smile with your savoirfaire  Wayne


----------



## lukeaye

lukeaye said:


> PS. off topic is anyone who is holding longs, as scared as i am that if wall street doesnt break 9860 tonight its gonna roll?






tech/a said:


> *And herein is where the difference lies.*
> 
> Profitable traders dont give a crap.
> Tommorow is of no concern.
> My bottom line is all that matters.
> I know how to maintain an ever expanding bottomline.
> So what happens o/n is of no consequence---or the day after or after that.




Tech, i understand your point of view earler, that no matter what if the situation that occured, as i said it would the other night, then it would not affect your bottom line. this is true and i agree with that, given mm i would never be in a situation where if the market went against me it would drawdown my account to a very large and damaging extent. but simply what i was getting at, was that with my analysis if the 9860 wasnt closed over, the market would roll, and it did. i was was able to get out with minimul loss. this was my point of view.


----------



## tech/a

lukeaye said:


> Tech, i understand your point of view earlier, that no matter what if the situation that occurred, as i said it would the other night, then it would not affect your bottom line. this is true and i agree with that, given mm i would never be in a situation where if the market went against me it would draw down my account to a very large and damaging extent. but simply what i was getting at, was that with my analysis if the 9860 wasn't closed over, the market would roll, and it did. i was was able to get out with minimal loss. this was my point of view.




Fine that's analysis which I presume is part of your trading plan.



> as scared as i am




Conjures a picture not conducive with a trading plan.


----------



## lukeaye

hmm i guess so. i just dont like losing money. although i accept that i do probably 50 % of the time. But i still hurt every time. i beleive that to be a good thing, but many will argue otherwise. As long as you excersise self control and you dont run out and try to double up to make it back.


----------



## tech/a

lukeaye said:


> hmm i guess so. i just dont like losing money. although i accept that i do probably 50 % of the time. But i still hurt every time. i beleive that to be a good thing, but many will argue otherwise. As long as you excersise self control and you dont run out and try to double up to make it back.




Losing money is part of the process.
You'll never (well hardly ever) get a move which is higher highs every day.
There will be pauses and you will give back some open profits.
Its inevitable.
Knowing whats a pull back and whats a change in longer term sentiment are key to successfully holding a position longer.


----------

