Do you have to day trade to trade full time?

[mazzatelli1000]

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?

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

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:

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]

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]

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]

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

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

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]

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]

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]

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]

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]

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]

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]

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]

DING DING DING DING DING... AWOOOOGA!

Fallacy alert.

A shocking statement coming from an accountant.

err, perhaps you would like to explain then?

 

[Cartman]

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<]

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]

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]

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