Is Day Trading Dead?

[OsbourneCox 10]

What are people's thoughts about this article?

 

http://wallstcheatsheet.com/trading/heres-the-proof-day-trading-is-dead/?p=20096/

[Kiwi 16]

Its another religious argument. My belief is true and you are going to hell.

 

The funniest thing is that at this moment in history he concludes: you should all buy and hold.

 

He points out some inefficiencies that have died and one approach that hasn't. Then, despite that he says its all dead. It's like the low end "News;" how do you sell newspapers and tv to the peasants: blood, fear, controversy.

 

 

 

Edit: LMAO; I googled him. He started real trading in October 2009. He's a 20+ year old lawyer who writes a good fable. No more need be said.

Edited October 31, 2010 by Kiwi

[SIUYA 11]

from his article...

"In today’s market, traders now have to be both right about direction and have conviction in the direction at the same time."

 

so whats new?

[BlowFish 10]

Yes day trading is so last decade unless you are High Frequency Trading (HFT), in and out a thousand times a pico second you are doomed

[jim380 10]

Is it true that day trading used to be easier?

[syswizard 10]

Is it true that day trading used to be easier?

 

Back in 2000, the intraday swings in the Nasdaq were tremendous...sometimes 200 points. More importantly, these swings were "smooth"....thus making it very easy to hold without worry. Traders could make 2-3k in one trade.

 

Today, it's much choppier thanks to HFT. It's very easy to get "rattled out" of your position only to see it go back to your original direction.

[huracan 10]

There will always be day traders - and some will be successful. Is day trading difficult? You bet. Will some firms exit the space? Of course. Has the author of the article ever day traded? I doubt it.

[BrianE 10]

I don't know if it's dead, but it sure seems to be a tough way to make a living.

[TheBigMan 10]

What are people's thoughts about this article?

 

Here's the Proof Day Trading is DEAD (SPY, QQQQ, IWM, DIA) | Wall St. Cheat Sheet

 

When I read statement #4 I instant came to the conclusion that his was a bs. article. The movement of the market due to upward or downward pressure is natural and quite common. We see it every day weather stocks go up or down they do it in a zig zag pattern. He said "Yet once again, computers replaced humans in exploiting this edge, thus rendering the strategy ineffective." That is how most traders make their money.....:crap:

[86834 10]

Day Trading is far from dead. The day trading dies, is the day we've got bigger things to worry about, like and end of the world as we know it.

 

The article is mainly about trading equities where volumes are spread a lot more thinly over various individual stocks within an index, unlike futures where you're trading the underlying index or commoditiy.

 

Trading did use to be a lot easier, but at the same time, I wouldn't say its got harder providing that you're day trading properly. What has happened is that basically it's come to a point where if you're going to day trade, you have no choice but to learn the mechanics of trading now, and to do it properly. As I mentioned in a another thread, the majoirty of the market is always looking for trends, even tho the market spends 80% of the time in a range. So essentially you have lots people who have taught themselves how to be chart analysts inadvertly thinking that they're trading. Over the past couple of years, they were able to get away with it because of the monster moves and trends, which gave a lot of people a false sense of security. Most of them people are gone now, and you can tell that from even from how quite the forums have got. In the prop letter, he stated that the days of someone being able to grind out a $50k USD a year living are over and that they're going to cut these 50k a year traders. Fair enough in my opinion, everything is relative, and if you're only earning 50k USD a year from trading, then you're not exactly an amazing trader.

 

If you're 'trading' and not analysing, then it's just a case of adapting to the conditions.

 

What is happening is the same as what happened on Eurex around 2006. Lots of people made good money when it was easy and were not talented enough to adapt to new conditions. The only differences is that back then they were blaming the flipper. Same stuff just another cycle, people blaming everyone/everything except for themselves.

[leobust 10]

Its far from dead..

But the markets says...."Many are invited....But few are choosen"

[wow 10]

Is it true that day trading used to be easier?

No, After the fact always easier. :haha:

[homestudy 10]

Day Trading is far from dead. The day trading dies, is the day we've got bigger things to worry about, like and end of the world as we know it.

 

The article is mainly about trading equities where volumes are spread a lot more thinly over various individual stocks within an index, unlike futures where you're trading the underlying index or commoditiy.

 

Trading did use to be a lot easier, but at the same time, I wouldn't say its got harder providing that you're day trading properly. What has happened is that basically it's come to a point where if you're going to day trade, you have no choice but to learn the mechanics of trading now, and to do it properly. As I mentioned in a another thread, the majoirty of the market is always looking for trends, even tho the market spends 80% of the time in a range. So essentially you have lots people who have taught themselves how to be chart analysts inadvertly thinking that they're trading. Over the past couple of years, they were able to get away with it because of the monster moves and trends, which gave a lot of people a false sense of security. Most of them people are gone now, and you can tell that from even from how quite the forums have got. In the prop letter, he stated that the days of someone being able to grind out a $50k USD a year living are over and that they're going to cut these 50k a year traders. Fair enough in my opinion, everything is relative, and if you're only earning 50k USD a year from trading, then you're not exactly an amazing trader.

 

If you're 'trading' and not analysing, then it's just a case of adapting to the conditions.

 

What is happening is the same as what happened on Eurex around 2006. Lots of people made good money when it was easy and were not talented enough to adapt to new conditions. The only differences is that back then they were blaming the flipper. Same stuff just another cycle, people blaming everyone/everything except for themselves.

 

Killer post I couldn't agree more. If it was easy my Mom would be doing it, Markets change all the time, they changed this summer. What worked yesterday may not work today. Its our job to adapt and give thanks everyday we get to do this job! It doesn't get much better then this.

[matrix 10]

day trading is how you perceive it, if you can not day trade, go to a bigger chart it really is that simple if you know price action and how it reacts and you have the discipline you will make it, fail in any of these areas and you will fail no matter the time frame

[estrader 10]

Trading is not dead and it was never easier. Read ‘Reminiscences of a Stock Operator’ by Jesse Livermore...it was written about 100 years ago and yet is as relevant today as it was when it was first published...

 

It can be summarised neatly and succinctly with his very wise quote:

"There is nothing new in Wall Street. There can't be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again."

 

Anyone here who thinks they have to learn something new because the market has changed is fooling themselves. There is nothing new, at all. Learn to trade and the skill will last a lifetime.

[MightyMouse 12]

Someone should tell the hedge funds, investment, and commercial banks that day trading is not dead, so that they stop wasting their time on insider trading, front running, etc.

 

They probably don't day trade because they don't know which is the best time frame to use and which indicators give the best signals. Or, possibly, they are too overwhelmed by fear and greed to trade properly during the day time frame.

[MadMarketScientist 11]

If the article would have been "Is Buy and Hold Dead" the argument probably could be supported. It's not called the Lost Decade for nothing (actually more than a decade by now -- how soon until we return to Nasdaq 5000

 

Anyway, I'd say it's more like Is Day Trading Hard? Heck yes. But dead? Not a chance.

 

The real sweet spot these day may actually be swing trading over a 1-5 day period.

 

MMS

[TheBigMan 10]

Someone should tell the hedge funds, investment, and commercial banks that day trading is not dead, so that they stop wasting their time on insider trading, front running, etc.

 

They probably don't day trade because they don't know which is the best time frame to use and which indicators give the best signals. Or, possibly, they are too overwhelmed by fear and greed to trade properly during the day time frame.

 

Wow this post above was made in 2008. A full two years before these guys got caught with their hands in the cookie jar.

[BrianE 10]

The post was yesterday. MightyMouse joined in 2008.

[Automated 10]

I saw "Inside Job" last night. Great expose on the financial meltdown. Sad part is that none of the culprits are going to jail, in fact a lot of them work as financial advisors to our government. Goldman Sachs is the new Catholic Church. They own us. Watch the movie, very well done and compelling, if not depressing ;>)

[MadMarketScientist 11]

I have that one in my Netflix queue for when it's released to DVD....heard good things though that it is frustrating to watch knowing the reality of things.

[SIUYA 11]

Google - buy and read, and then realise nothing really changes.

""where are all the customers yachts""

Any student of the markets, conspiracy theorists and anyone wanting to work on Wall street in all its guises, should do some economic history study - and not in the traditional sense.

Then accept that that is how the system works.

This is not a judgement on the rights of wrongs - but if its an eye opener for those who say - how can they let this happen. Then read history and learn - it always happens, and it does not take a genius to understand it will happen again in some form.

[MadMarketScientist 11]

I don't think there is any question that what we are seeing now will be repeated in different formats.

 

To assume we'll never see a real estate mania again, or a stock market bull like the late 90's, etc... is naive. It will happen again -- all the human instincts and greed of course will come into play. It may be dressed differently but it will be back - if it isn't already in a different form.

 

It's probably why if someone asked me who was young where they should go work I'd probably tell them somehow someway get a job at Goldman or Morgan -- you'll be set.

 

MMS

[Tams 20]

Day Trading Still Alive, Outsourced to China

 

http://www.nytimes.com/2010/12/10/business/global/10daytrade.html?_r=2&ref=business

[MadMarketScientist 11]

Gotta say that's pathetic -- if we can't even hold onto jobs like that there's just nothing left......

 

 

MMS