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Thoughts on day trading

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  • #16
    I remember as a resident in the late 90's I rotated with a local orthopod who did day trading in between patients. It was his "second" job. He was the type of guy who did his own pre-ops. "I'm an MD after all". His exams lasted 20 seconds after listening to the heart and having the patient take a deep breath while listening to the heart. It was interesting cause his partner also had a "2nd job", as a security guard at local concert venues. But I digress. This day trader/ortho/perioptist had 3 screens running at all time IBM, S+P, and DOW. All he traded was S+P futures which I had no idea what that was. The last day I spent with him, he was super excited cause he said based on all the market signals the S+P was going to spike high high high and so he made a big move. The next day, I don't know what the S+P did but the DOW dropped over 200 points. I assume they kind tracked each other. That was a lot back in the day.
    Last edited by burritos; 10-25-2020, 10:59 AM.

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    • #17
      Originally posted by Mindwarp86 View Post
      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
      Algo trading is a way to make money. The problem is, you have to have access to the order backlog, read it mathematically correctly, have a faster computer, faster network and you become used to nickel dime profits. The process is important and small market breeze blows up your trade. Some other algo front loads a nice order in the 5 spot that looks like support, your load up a nice little buy to clip it and poof! It’s gone. Cancelled. It works until it doesn’t.

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      • #18
        Originally posted by burritos View Post
        I remember as a resident in the late 90's I rotated with a local orthopod who did day trading in between patients. It was his "second" job. He was the type of guy who did his own pre-ops. "I'm an MD after all". His exams lasted 20 seconds after listening to the heart and having the patient take a deep breath while listening to the lungs. It was interesting cause his partner also had a "2nd job", as a security guard at local concert venues. But I digress. This day trader/ortho/perioptist had 3 screens running at all time IBM, S+P, and DOW. All he traded was S+P futures which I had no idea what that was. The last day I spent with him, he was super excited cause he said based on all the market signals the S+P was going to spike high high high and so he made a big move. The next day, I don't know what the S+P did but the DOW dropped over 200 points. I assume they kind tracked each other. That was a lot back in the day.
        BOOM!

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        • #19
          If someone can day trade successfully enough for it to be worth their time as a physician, they would be stupid to continue to be a physician and could make substantially more money trading other people's money for a living.

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          • #20
            I wouldn't call myself "a day trader". But I did have a period when it was not unusual for me to buy a stock and sell it that same day or a week later if its goes up enough. I've bet on a few earning call, etc. If I can get a 7-10% return in a few days I usually cash out. I've spent less than 5k on this type of trading. Probably tried it 20 times over 3 month window. I was maybe up 10-11 times, flat 4-5, down 2-3 times and totally lost my shirt 1 time and lost 84% in a day on that trade and stopped this "day trading".

            Its a ton of work, hours a day, for very little in return. I think I was up one point 36% in a few weeks, but that's really not that much money on 5k investment. Given the stress and the rush I would never be able to throw real money at this type of venture. You would have to have millions to make a living off of it and if you have millions why risk it? Its the same as a casino. There are a handful of life changing stories out there but IMO the majority walk away down and hopefully get out before they lose to much.

            Its easier to do market timing and buy and hold the right investments for several months/years over day trading. I've still been able to beat the S&P and can have a much more defensive portfolio.

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            • #21
              Ben Felix recently covered this on his excellent YouTube channel... https://youtu.be/qhHOmZVAqBE

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              • #22
                I remember walking through the doctor's lounge and hearing docs giving each other "hot tips" and other financial advice growing up. I swore to myself never to be one of those idiots.

                One of the major benefits of being a doc is being highly compensated. If you earn an average return on your investments you are almost guaranteed to have enough money to retire comfortably. The only way you screw this is up is by doing silly things like day trading, "hot" real estate when you have no clue, etc.

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                • #23
                  For a few months back in 2000 or so I worked rural ER's on the weekends and day traded essentially full time during the week. It was actually right at the transition of the tech bubble. I read a bunch of books, used a trading service (where they tell you what to buy and when) for a while and also did it on my own, had multiple monitors, level 2 quotes, etc.

                  I discovered I was not good at day trading. I think day trading and short term trading in general may actually be more difficult for physicians since you will be wrong a lot and have to admit when you're wrong, something we're not used to. Looking back I'm glad I tried it and learned a lot but did much better with long term investing.

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                  • #24
                    Originally posted by Mindwarp86 View Post
                    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?
                    I did it in college, made some money, decided I could totally to fine doing it as a career, and decided it would be stressful, and rather boring. The winning was fun, but I didn't see a way I'd be excited to get out of bed doing it.

                    So I found an index fund, and now spend my time not caring!

                    You could also think about it this way... Apparently I was very motivated to have beer money in college, and now that I have beer money I am much less motivated.

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                    • #25
                      I've day traded, swing traded (holding for days, weeks, months), and also bought and held for LT. I no longer day trade. Swing trading and holding has proved itself to be fruitful without the stress and attention needed to watch every up/down tick. With day trading you're batting for singles or striking out...occasionally will get a double or triple. With holding, you're increasing your chances of that homerun exponentially. I even have a job that I can watch the markets fairly closely throughout the day. Even then, I strongly do not recommend it.

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                      • #26
                        I played a little with the 2x and 3x ETFs a while back, when I didn't have much to play with. I'm not sure if I made money or lost money, but it was 3 figures either way.

                        What I really learned is how little I knew, and that I was adding stress to my life in an area that I didn't need, and taking away from my focus to practice my profession, which is worth far greater.

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