According to a new research its impossible for an individual to day trade for a living

pannet1

Well-Known Member
#13
please believe that you are going to be 5% of the elite trader's group that is winning and trading for living. if you are still aspiring to become successful and searching for the trading strategy, then you are definitely looking at the wrong place.

day trading reduces the potential of getting higher reward for the same risk taken by positional trader. of course, there are other problems like overnight risk and need to trade in a bigger time frame for a positional trader.

@Tejas Khoday
you are the best person to say this. how many of the successful (challenge winner) traders in your brokerage are actually day traders against positional traders.
 
Last edited:
#16
Not necessarily. You will be surprised that there are many consistent retail day traders.

If you have visited our thread or the Fyers 30 Day Challenge on Traderji, you will see that some traders have posted their winning certificates consecutively. They are short-term traders and have disproven the theory that it is impossible to day trade successfully (Which is required to do it for a living).

In theory, theory and practice are the same. In practice, they aren't.

Some people are just built for trading and many others learn with experiences. It's all about focus. These theories and research reports are published with so much authority and we all give them the benefit of doubt, instead of our own selves. For all you know, the guys who published the report must have burned their accounts when their trading went horribly wrong. :) Who's to say that they aren't biased?

Have you heard of the Efficient Market Hypothesis? It's an investment theory that states that all market information is priced into the stocks/instruments. It also claims that it is impossible to outperform the market by either timing or superior decision making. This theory which is taught to all CFA and finance students has been disproven by many fund managers over the last few decades. Here's a short interview of George Soros who is a strong critic of the modern-day EMH. He is a living example of the fact that efficient market theory does not belong in the real world.
Small edit please: Not exactly true. CFA students are taught about the arguments for and against the EMH along with other thoeries of weaker markets. Most CFA's, incl me, are not naive enough to be convinced by EMH - so we can agree that it isn't real.
 

DanPSup

Hedge Strategy Trader in Options and Futures
#17
I recently came across this research paper Day Trading for a Living? by Chague et al. They carried out their study in Brazilian stock market.

From the Paper


The paper's conclusion was that it is highly unlikely an individual be profitable if they day trade for a living. Those individuals who was profitable took very risky trades.
People who make money with trading, even make enough money with it to make a living out from it, are the once who believed that they can make money with it even before they did put in their first money in any trade. They started with positive thoughts about it and got proved they are on the wright path at the moment they realized they make money with their trading style. It is called: Confidence in our work.

Now you or who ever has the choice to join the successful or you further can stay with negative or unsure thoughts about trading. In case you or who ever needs more information about the subject to may find the way to success in trading, then the following is a must read. It was written in 1993 and is even in today's trading world complete actual:

The winners and losers of the zero sum game

Introduction:

On an given transaction, the chance of winning or losing may be near even. In the long run, however, winners profit from trading because they have some persistent advantages that allow them to win slightly more often (or occasionally much bigger) than losers win. Winners choose better portfolios than losers, they time their trades better, and they negotiate their trades better.

If you trade securities, you should know whatever you are likely to win or lose. Knowing that you can expect to lose on average may save you money in the long run. You may decide not to trade or you may change how you trade. Losers trade for many good reasons, but they should not trade for expected trading profits.

This paper examines the economics that determine who wins and who loses when trading. We will examine many types of traders and we will consider how their trading styles leas to profits or losses. We shall see how access to information of various types created trading advantages, and we shall see why many losing traders continue to trade.


Source with the PDF: http://www.turtletrader.com/zerosum.pdf
 
#18
Well for me its all about analysis and the right knowledge. People with good trading experience and trading style are able to make regular profits from it. But not everyone can do that because they lack the skills required in day trading.
 
#19
@DanPSup
They started with positive thoughts about it and got proved they are on the wright path at the moment they realized they make money with their trading style. It is called: Confidence in our work.
Not confidence but maths especially statistics plays an important role in winning and lossing of a trade.

On an given transaction, the chance of winning or losing may be near even. In the long run, however, winners profit from trading because they have some persistent advantages that allow them to win slightly more often (or occasionally much bigger) than losers win. Winners choose better portfolios than losers, they time their trades better, and they negotiate their trades better.
This quote may be relevant to long term trading strategy but if you have read the paper which I shared, It specifically says that the longer you stay in a day trading regime the higher the chance you will lose all your money.
 
#20
well... use hedging .. play on both sides .. end up in profit ..
 

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