Thoughts on day trading

[Mindwarp86]

I know some people who use thinkorswim and claim to do very well with day trading.

I've tried short term trades and always seem to get crushed. So have learned the hard way and only invest long term now.

Any success stories? I have read a few investing books, and most say that technical analysis is complete BS. Thoughts on this?

[Panscan]

Day trading is a zero sum game in which you are competing with people who have access to inside information, ability to make trades quicker than you, more time to spend analyzing things and do this for a living.

Would be like a random undergrad anatomy student competing against a general surgeon for who can do an appy better

[Tim]

“I have read a few investing books, and most say that technical analysis is complete BS. Thoughts on this?”

Technical analysis is not BS. It is simply a way to interpret data.
That doesn’t mean it useful for predicting extremely short term pricing behaviors.

The winners are those teaching day trading seminars or monetizing it on the Internet. Success stories are easily available.
Here is one: https://daytradingacademy.com
No connection, they have a testimonial page.

[Zaphod]

Im not sure there are a ton of pure day traders out there, ie, in/out fully every day. You'll eventually be crushed.

There are some successful traders that find systems that work for them for sure. How much of this is actual skill vs. being an artifact in a generally trending market...probably much less. I do think there are some skilled traders out there, but many of these use market profile/volume, etc...as a way to guide them (that is where heavy action, buy/sell has occurred and more in line with supply/demand and market infrastructure.

Every single successful trader has a risk plan however, as they know the real goal is to come back tomorrow and you have bad runs.

This isnt important for docs as we can just funnel large sums in and let it sit.

[hillaj1]

It’s best not have to have thoughts on day trading.

[xraygoggles]

Day trading is a losing game, long term. There has been a flood of new investors day-trading since covid, and with the run-up in the market since the crash, everyone seems to be making money day-trading. But that's how it rolls in a bull market.

Now that there has been some volatility lately, I would image a few of these people have lost a lot of gains (especially if using leverage like margin or options). It also requires a lot of work to keep track of the prices on a daily basis. Not worth the hassle for anyone who doesn't need to day-trade to put food on the table.

[burritos]

Im not sure there are a ton of pure day traders out there, ie, in/out fully every day. You'll eventually be crushed.

There are some successful traders that find systems that work for them for sure. How much of this is actual skill vs. being an artifact in a generally trending market...probably much less. I do think there are some skilled traders out there, but many of these use market profile/volume, etc...as a way to guide them (that is where heavy action, buy/sell has occurred and more in line with supply/demand and market infrastructure.

Every single successful trader has a risk plan however, as they know the real goal is to come back tomorrow and you have bad runs.

This isnt important for docs as we can just funnel large sums in and let it sit.

This is the key. You could day trade this and get a delta in either direction and feel like you've done something. The drive to do something is strong. Mollifying the ego is acutely human. Arguably it is one of the major reason we are in the evolutionary position that we are in.

[8arclay]

Before I learned about passive investing, I did a fair amount as a fresh graduate. Nothing to write home about, mixed results, but after a year I was up about 8%. Lots of middling results, couple big ones just missed, and a good amount of smaller losses. I realized I was spending a TON of time and energy just trying to keep pace with the market. Wasnt worth it to me, but Im glad I scratched that itch when I was young and not a lot of skin in the game.

[jz-]

Like 8arclay, I short-term traded in the late 90s super-bull market. My results / time and energy spent, was poor compared to buy-and-hold.
Fun to speculate on trading Mar. 1-->May 31, 2020 when the strongest moves were overnight gaps, rather than daytime moves.

[Hatton]

Like 8arclay, I short-term traded in the late 90s super-bull market. My results / time and energy spent, was poor compared to buy-and-hold.
Fun to speculate on trading Mar. 1-->May 31, 2020 when the strongest moves were overnight gaps, rather than daytime moves.

Like JZ I did a fair amount of short term trading in the late 90s super-bull. I too believe I have done better to buy and hold and index. I have tried technical analysis also. This can work but with todays info flow I doubt it still does. I will say it again indexing is very easy. It just requires self-discipline to save the money as opposed to spending every dime.

[Mindwarp86]

The ability to even make even a few trades that make you 20% on your capital in a day or two seems so promising if you could even develop the skill of being successful 70% of the time. I guess wondering what the average true efficacy of a great day trader is

[Tangler]

Jason Zweig wrote a book called the devil's financial dictionary. It is a really funny little coffee table dictionary.

When you look up "Day Trader" it says "see idiot" .

When you look up Idiot it says Day Trader.

https://www.amazon.com/Devils-Financial-Dictionary-Jason-Zweig-ebook/dp/B012271Z5M

[WorkforFIRE]

You’ll go down with the ship if you day trade. We don’t have the information like the big dogs do. Panscan said it best. Undergrad student who took anatomy trying to compete with a general surgeon to see who can do an appy.

[Zaphod]

The ability to even make even a few trades that make you 20% on your capital in a day or two seems so promising if you could even develop the skill of being successful 70% of the time. I guess wondering what the average true efficacy of a great day trader is

Those times are just so rare though, ie, without risking a lot of capital which is just dumb. Im sure the efficacy is somewhere less than 1%.

If certain conditions arise that are truly lopsided, those can be good, but that only happens every few years. You still have to follow the market close like a daytrader might, but not act, which is hard.

[CordMcNally]

I've yet to lose money while day trading. I've also yet to make money while day trading. YMMV.