Trading/Daytrading for a living

[tech/a]

This thread is very intresting to a newbie like myself.

I'm very surprised at some of the comments but that just goes to show how ignorant I am about trading.

It sounds like a lot of you incline on going long and medium for most of your capital base. Doesn't sound like you guys go 'short' that much, otherwise you'd be busier during the day etc.

Not that much available to go short on in Aust.
The US is a different matter though.
I prefer to trade the physical rather than CFD's.
Using IB. Having been introduced to their Conditional orders platform and Brokerage that you only dream about ( $6.50 under 10K or .08% in Aust or $1 each way in the US) I'm in traders heaven.

 

[julius]

I prefer to trade the physical rather than CFD's.

Why's this tech ?

 

[tech/a]

I want to own it.
I want something tangible.
Just me I guess, I want an asset.

 

[>Apocalypto<]

Tech, Julius.

this not really aimed at u tech just a reply in a small sense to your above post.

what i have seen heard and learnt. it's a very hard gig to make a living only trading CFD's. I am sure some can do it but i bet that's a rare few.

Like TH has pointed out many a time u want to scalp day trade for a living u got to trade the futures with a big start up account. If u plan to scalp day trade FX then ECN is the only way to go. (not EFX)

Transparency people!

Tech, if u had the capital available could u make a living day trading fully paid shares?

 

[tech/a]

I trade fair sized parcels now on Margin.
So Yes.
But agree a return of say 1-2% a week
doesnt look much on a capital base of $20k.

I dont trade for a living---just for profit,so having funds work hard for me is prime.

 

[ThingyMajiggy]

So who here actually trades for a living, as in sole income is from trading? Doesn't matter about definitions or meanings or if you want to or not, just who here does successfully(profitable more often than not), as in doesn't need to go back to their job next week. On whatever instrument(stocks, options, CFDs, futs).

Am interested to know how many, if any.

 

[skc]

So who here actually trades for a living, as in sole income is from trading? Doesn't matter about definitions or meanings or if you want to or not, just who here does successfully(profitable more often than not), as in doesn't need to go back to their job next week. On whatever instrument(stocks, options, CFDs, futs).

Am interested to know how many, if any.

One here.

Others that I am aware of... MichaelD, SkyQ, WayneL(?), Pixel(?)

Propbably no more than 10.

 

[ThingyMajiggy]

One here.

Others that I am aware of... MichaelD, SkyQ, WayneL(?), Pixel(?)

Propbably no more than 10.

Yeah my thoughts too, what is your main driver? Pairs trading?

I think SkyQ is prop? Wayne is options, not sure about MichaelD and pixel though, would be interesting to find out.

Thanks for replying

 

[captain black]

So who here actually trades for a living, as in sole income is from trading? Doesn't matter about definitions or meanings or if you want to or not, just who here does successfully(profitable more often than not), as in doesn't need to go back to their job next week. On whatever instrument(stocks, options, CFDs, futs).

Am interested to know how many, if any.

Another one here.

System trading shares and CFD's for over 10 years.
Discretionary trading index futures (Kospi and Dax mostly) for around 3-4 years.

 

[ThingyMajiggy]

Another one here.

System trading shares and CFD's for over 10 years.
Discretionary trading index futures (Kospi and Dax mostly) for around 3-4 years.

What's your opinion of it? If you don't mind me asking, are you guys doing alright from it? Or do you stress too much and think it's not worth it etc?

 

[captain black]

What's your opinion of it? If you don't mind me asking, are you guys doing alright from it? Or do you stress too much and think it's not worth it etc?

I started with systems trading once I'd developed a couple of systems I trusted. Once you know you have a positive expectancy then it's just a matter of turning up, placing your trades and let the numbers do the work.

Day trading index futures can be stressful but I know I've got 10+ years of successful systems trading to fall back on if it all turns to crap. Thankfully it hasn't . I got caught with cash tied up in a CFD account when MF Global went under and most of my systems were in drawdown but thankfully was diversified enough not to go under. That night when the news came through about MF Global was probably the most stressful time (didn't eat for a few days). I don't find day to day trading overly stressful.

I work from home and wouldn't want to be doing anything else.

 

[ThingyMajiggy]

I started with systems trading once I'd developed a couple of systems I trusted. Once you know you have a positive expectancy then it's just a matter of turning up, placing your trades and let the numbers do the work.

Day trading index futures can be stressful but I know I've got 10+ years of successful systems trading to fall back on if it all turns to crap. Thankfully it hasn't . I got caught with cash tied up in a CFD account when MF Global went under and most of my systems were in drawdown but thankfully was diversified enough not to go under. That night when the news came through about MF Global was probably the most stressful time (didn't eat for a few days). I don't find day to day trading overly stressful.

I work from home and wouldn't want to be doing anything else.

Bold part is the tricky bit I'm finding Excellent to hear, well done and thanks for explaining! Must have been pretty hectic when the whole MF thing happened.

 

[skc]

Yeah my thoughts too, what is your main driver? Pairs trading?

I think SkyQ is prop? Wayne is options, not sure about MichaelD and pixel though, would be interesting to find out.

Thanks for replying

Yes but trying to diversify. My profits are 75% pairs and 25% directional stuff... mostly day trading.

SkyQ is prop and so am I but we are not in the same shop.

I got caught with cash tied up in a CFD account when MF Global went under and most of my systems were in drawdown but thankfully was diversified enough not to go under. That night when the news came through about MF Global was probably the most stressful time (didn't eat for a few days). I don't find day to day trading overly stressful.

I work from home and wouldn't want to be doing anything else.

Same story here. MFG going under was by far the most stressful situation I've ever been involved. And it's counterparty risk rather than market risk.

The only other stressors would mainly come from drawdown periods. That's why you need an adequate buffer for meeting your expenses.

In terms of generating income, using leveraged instruments (like CFDs or futures) and doing day trading, the capital required can be quite small.

 

[ThingyMajiggy]

I started with systems trading once I'd developed a couple of systems I trusted. Once you know you have a positive expectancy then it's just a matter of turning up, placing your trades and let the numbers do the work.

Day trading index futures can be stressful but I know I've got 10+ years of successful systems trading to fall back on if it all turns to crap. Thankfully it hasn't . I got caught with cash tied up in a CFD account when MF Global went under and most of my systems were in drawdown but thankfully was diversified enough not to go under. That night when the news came through about MF Global was probably the most stressful time (didn't eat for a few days). I don't find day to day trading overly stressful.

I work from home and wouldn't want to be doing anything else.

Also while you're here, what systems trading did you do? Stuff you developed yourself? In what platform? Been looking at a bit of systems stuff too.

Yes but trying to diversify. My profits are 75% pairs and 25% directional stuff... mostly day trading.

SkyQ is prop and so am I but we are not in the same shop.



Same story here. MFG going under was by far the most stressful situation I've ever been involved. And it's counterparty risk rather than market risk.

The only other stressors would mainly come from drawdown periods. That's why you need an adequate buffer for meeting your expenses.

In terms of generating income, using leveraged instruments (like CFDs or futures) and doing day trading, the capital required can be quite small.

Very nice, so how did you get into pairs trading? Didn't realise it would be that big of a chunk of your main profits, you seem to do it well from what I've seen though, you ever thought about spreading futures? I imagine you would pick it up pretty quick!

Got a lot I could learn from you guys, hope to do something similar(trade for a living) down the track. Got plenty of time, but saving the funds.

 

[captain black]

Bold part is the tricky bit I'm finding

It's all that matters. If you're not trading with a positive expectancy then you don't have a business, you have a gambling problem

Excellent to hear, well done and thanks for explaining! Must have been pretty hectic when the whole MF thing happened.

Yeah, it was pretty awful at the time. Thankfully we've gotten most of our money returned (95% for CFD accounts) and I learned a valuable lesson about counter party risk and also about a wonderful wife who looked at me the following morning and said "it's only money, you'll find a way to make it back".

 

[captain black]

Also while you're here, what systems trading did you do? Stuff you developed yourself? In what platform? Been looking at a bit of systems stuff too.

All developed myself with Amibroker. Systems trading is a good place to start to gain confidence.

 

[ThingyMajiggy]

It's all that matters. If you're not trading with a positive expectancy then you don't have a business, you have a gambling problem

Yeah it's how to KNOW you have it though, especially when we trade discretionary and the markets are ever-changing

 

[captain black]

Yeah it's how to KNOW you have it though, especially when we trade discretionary and the markets are ever-changing

With systems trading using in-sample and out-of-sample data and walk forward testing.

With discretionary trading I used similar techniques to code up repeatable patterns and test them (similar to what Thomas Bulkowski has done). Once you have repeatable patterns coded up and tested it then comes down to sim trading and collecting metrics to see if you're able to reproduce your testing results. Market conditions change from minute to minute when you're day trading so you find out very quickly whether you're going to be profitable. Tech/a 's threads on trading index futures with VSA are useful to see how repeatable patterns can be traded consistently.

 

[ThingyMajiggy]

With systems trading using in-sample and out-of-sample data and walk forward testing.

With discretionary trading I used similar techniques to code up repeatable patterns and test them (similar to what Thomas Bulkowski has done). Once you have repeatable patterns coded up and tested it then comes down to sim trading and collecting metrics to see if you're able to reproduce your testing results. Market conditions change from minute to minute when you're day trading so you find out very quickly whether you're going to be profitable. Tech/a 's threads on trading index futures with VSA are useful to see how repeatable patterns can be traded consistently.

So you coded up things like candlestick patterns or more stuff like "if it gaps down then most times the gap will close" type stuff, overall market movement patterns? Yeah Tech's stuff is good, has helped many!

Many other traders out there doing just trading for a living?

 

[minwa]

For retail traders who don't trade OPM, a lot of traders beleive trading to generate income to live off is the goal which is wrong. Building equity is the primary goal. Withdrawing profits to pay for expenses should only be a very small (if any) part of your total profits.

For example in first year of going full time you have 400k and make 100k a year, great. You take out 100k for expenses. Next year is the same, perfect. Then the third year comes and the market conditions shift or your personal condition (kids, family, illness etc) shifts and you end up making 50k loss. Now you still need to pay for expenses of 100k and a 50k loss. You end up with 250k. Next year you have to make 40% instead of the usual 25% just to pay for your expenses and you need to make 100% just to get back to previous equity and pay the expenses as well. Not gonna happen.

If you are not trading OPM or deriving some other sort of income from trading then your own trading (hopefully in multiple low correlated systems in different markets) must be big enough that taking out to pay for expenses is only a small portion.