Do you have to day trade to trade full time?

gooner · 20 July 2009

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 · 20 July 2009

Nick Radge said:
I can't see the point of the argument.

Agree :sleeping:

It's getting just tedious now.

Over and out.

sidious · 20 July 2009

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 · 20 July 2009

What I've learned so far is to maximise profits there should be diversification in trades as well.

Found the exact opposite.

MRC & Co · 20 July 2009

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 · 20 July 2009

wayneL said:
Agree :sleeping:

It's getting just tedious now.

Over and out.

Nice one Wayne

Julia · 20 July 2009

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 · 20 July 2009

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 · 20 July 2009

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 · 20 July 2009

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 · 21 July 2009

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< · 21 July 2009

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 · 21 July 2009

MR J , your going to do OK , remember those who bagged you when it happens , traders will congratulate you .

Milk the MMs feed

nomore4s · 21 July 2009

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 · 21 July 2009

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 · 21 July 2009

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 · 21 July 2009

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 · 21 July 2009

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 · 21 July 2009

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 · 21 July 2009

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?

Do you have to day trade to trade full time?

gooner

wayneL

VIVA LA LIBERTAD, CARAJO!

sidious

tech/a

No Ordinary Duck

MRC & Co

Bobby

Julia

In Memoriam

beerwm

skc

Goldmember

nunthewiser

Mr J

>Apocalypto<

20.03.2012

Bobby

nomore4s

Commonsense isn't that common

Trembling Hand

Can be found on the bid

nomore4s

Commonsense isn't that common

gooner

skyQuake

Bobby

AlterEgo

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