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I did it for a while in the very exciting year of 2008. I see-sawed back and forth and was profitable for months at a time, but in the end I was down. I strictl

I did it for a while in the very exciting year of 2008. I see-sawed back and forth and was profitable for months at a time, but in the end I was down. I strictly kept my daily losses limited at $50/day. So really small risk. At the end of that year my day trading losses were about $1500 and otherwise I was in cash just watching the world burn. My long term funds lost more than that in a day. I've lost out on more money by not being in the market long term going up. Of course I thought I might get good at it (everybody dreams), but the main reason I did it was to learn to confront fear and to keep logical and strict to the trading plan in the face of it. I am still risk averse though, so I didn't really learn thoroughly. The other main thing I learned is that if you aren't a robot then you don't have any business out on that killing floor. The age of human day traders is over.

yomly 10y ago
So if you went in with an "algorithm" which baked in your own rules for trading and left it for a year, would it have performed better? Does a greater proportion of non-HFT bots make money?
- crucialfelix 10y ago
  Developing that trading strategy is a continuous job; that's what successful traders do. They don't play stocks, they play strategies. There are going to be computers involved no matter what. Your indicators, your trading platform, what analysts you trust. So what is a bot ? A "bot" suggests to me something just trading in and out of some security at some average frequency: weeks, days, intraday, minutes, seconds and then there is HFT. These things are all just feeding off of the movement of whales: major flows of money that cause those waves that small technical traders think they can figure out just by watching the shape of them. There is really an amazing amount of intelligence involved in playing the day's game and you are taking in a lot of data, watching other markets (oil versus airlines, currencies, futures, sovereign debt) and using this to either realize the moment is now or to just scare the shit out of yourself and end the day up frazzled and $30 richer. That was my experience. Successful traders reduce their risk even further by choosing what they are trading, shortlisting things that might pop and being able to jump on those (manually or automatically) in less than a heartbeat. That's where the bots will rip an entire sector up before an amateur trader has any chance to understand what is happening let alone why it happened. But those bots are just extensions of the trader. Anyway, the whole thing is retarded and I have more fulfilling things to do on the planet. > would it have performed better? Definitely. Discipline is tough when somebody just demolished your chinese solar stock and you are down a week's earnings. The bot would've cut and run.
  - jokoon 10y ago
    An online friend just got into currency trading and went into some tutorials about reading curves. Apparently there are recurring curve patterns, which allows one to predict where a rate is going. If you can code up some pattern recognition algorithm, there might be a way to make money. Although I'm very skeptical about those patterns, because there could be someone trading back and forth to create those trends, and screw you when they want. Anyway analyzing data and gaining money with it makes really no sense at all. Surely you can make money to live, but there is no point to it until you really are able to win big, and nobody does. Investing money where real business create economic activities that are in effective demand, maybe. But trading numbers, that's really an awful thing.
    - wyager 10y ago
      If those patterns existed and were detectable, the moment people started trading on those patterns (or wrote bots to do so), the pattern would disappear. This is one of the services the market provides. It creates uniform price conditions across time and space. If there is a discrepancy that doesn't make sense (like a recurring profitable pattern in stock prices), you can make money by fixing it. "Trading numbers", as you call it, is (through a layer or two of indirection) helping to establish true prices, transmit market information, provide liquidity, etc. All of these things are critical for "real business" to operate efficiently in a large economy. The abstract markets create huge value for "real business" and its users charge a small percentage of the value created.
    - pepy 10y ago
      I am a technical analyst. Patterns do occur but ultimately prices are driven by fundamental events. Interest rate decisions, market data releases and similar. When that occurs no pattern can survive on the smaller timeframe. Technical analysis works but it is not written in stone.
      - shostack 10y ago
        What are your thoughts on A Random Walk Down Wallstreet? He pretty thoroughly picks apart the efficacy of technical analysis vs buying some indexes with supporting data.
alistproducer2 10y ago
I traded a little during the crisis until I got hit with the pattern day trading rule. I cashed out up 28%. Maybe they were doing me a favor cause I probably wouldn't have done so well on a longer timeline.
- deleted 10y ago
  [deleted]

yomly 10y ago

So if you went in with an "algorithm" which baked in your own rules for trading and left it for a year, would it have performed better? Does a greater proportion of non-HFT bots make money?

crucialfelix 10y ago
Developing that trading strategy is a continuous job; that's what successful traders do. They don't play stocks, they play strategies. There are going to be computers involved no matter what. Your indicators, your trading platform, what analysts you trust. So what is a bot ? A "bot" suggests to me something just trading in and out of some security at some average frequency: weeks, days, intraday, minutes, seconds and then there is HFT. These things are all just feeding off of the movement of whales: major flows of money that cause those waves that small technical traders think they can figure out just by watching the shape of them. There is really an amazing amount of intelligence involved in playing the day's game and you are taking in a lot of data, watching other markets (oil versus airlines, currencies, futures, sovereign debt) and using this to either realize the moment is now or to just scare the shit out of yourself and end the day up frazzled and $30 richer. That was my experience. Successful traders reduce their risk even further by choosing what they are trading, shortlisting things that might pop and being able to jump on those (manually or automatically) in less than a heartbeat. That's where the bots will rip an entire sector up before an amateur trader has any chance to understand what is happening let alone why it happened. But those bots are just extensions of the trader. Anyway, the whole thing is retarded and I have more fulfilling things to do on the planet. > would it have performed better? Definitely. Discipline is tough when somebody just demolished your chinese solar stock and you are down a week's earnings. The bot would've cut and run.
- jokoon 10y ago
  An online friend just got into currency trading and went into some tutorials about reading curves. Apparently there are recurring curve patterns, which allows one to predict where a rate is going. If you can code up some pattern recognition algorithm, there might be a way to make money. Although I'm very skeptical about those patterns, because there could be someone trading back and forth to create those trends, and screw you when they want. Anyway analyzing data and gaining money with it makes really no sense at all. Surely you can make money to live, but there is no point to it until you really are able to win big, and nobody does. Investing money where real business create economic activities that are in effective demand, maybe. But trading numbers, that's really an awful thing.
  - wyager 10y ago
    If those patterns existed and were detectable, the moment people started trading on those patterns (or wrote bots to do so), the pattern would disappear. This is one of the services the market provides. It creates uniform price conditions across time and space. If there is a discrepancy that doesn't make sense (like a recurring profitable pattern in stock prices), you can make money by fixing it. "Trading numbers", as you call it, is (through a layer or two of indirection) helping to establish true prices, transmit market information, provide liquidity, etc. All of these things are critical for "real business" to operate efficiently in a large economy. The abstract markets create huge value for "real business" and its users charge a small percentage of the value created.
  - pepy 10y ago
    I am a technical analyst. Patterns do occur but ultimately prices are driven by fundamental events. Interest rate decisions, market data releases and similar. When that occurs no pattern can survive on the smaller timeframe. Technical analysis works but it is not written in stone.
    - shostack 10y ago
      What are your thoughts on A Random Walk Down Wallstreet? He pretty thoroughly picks apart the efficacy of technical analysis vs buying some indexes with supporting data.

alistproducer2 10y ago

I traded a little during the crisis until I got hit with the pattern day trading rule. I cashed out up 28%. Maybe they were doing me a favor cause I probably wouldn't have done so well on a longer timeline.

deleted 10y ago
[deleted]