# IMO Daytrading is generally a losing game



## savvybuck (Feb 12, 2014)

Now I am not against the idea of day trading in theory.

The stock market is comprised of average investors, who are Mom and Pops, institutional investors who are subject to many rules and regulations, and hedge funds, who are also subject to various rules and regulations. So you think to yourself, “Hey, I am my own person with my own money. I am subject to zero regulations on how I invest my money and I think I can beat all the chumps out there earning a measly 8% return year over year!”



Sounds great in theory right? If you think the market is pricing stock X at $50 a share and it should be valued at $100 a share after the inevitable earnings beat, then why shouldn’t you take the position temporarily and liquidate for a nice profit?

However, in practicality, most of us who try will be losers. You not only have to beat the market but you have to beat many “logistical barriers” which I will explain below.

*1. Transaction Fees*

In simple terms, when you buy a stock and then subsequently sell it, the transaction fee is generally $20 total. So even on a $2,000 position, the fees represent 1% of your total amount! Consider that the over the long term, the typical investor should expect 8% in returns, 1% in fees is a massive chunk of your overall returns!

*2. Taxes*

Each time a day trader liquidates to realize on a gain, you have to declare it as capital gains. So, a day trader who expects to be profitable, will generally pay more in taxes and have compounding work against them in the long run. A buy and hold investor will only have to pay taxes once in the end, when they finally liquidate the position after X number of years. 

*3. Bid and Ask Spread*

Not only taxes and transactions fees, but each time a daytrader enters and exits a position, they are subject to the bid ask spread. Even for many liquid blue chip stocks, there is still a slight bid ask spread which takes away your returns.

Walmart: 0.045%

Alphabet: 0.89%

Johnson and Johnson: 0.35%

Wells Fargo Corp: 0.13%

General Electric: 0.21%

I don’t have any actual studies on bid ask spread for blue chip stocks, but for sake of this article, I will say there’s an industry wide 0.3% bid/ask spread for each transaction.



*Bottom Line*: When you simply look at the 3 items above, it doesn't seem like much. However, if you are making 10-20 trades per month and hundreds of trades per year, those fees to come out to be very significant.


I did a simple table which shows that if a stock moves up and down many times, the day trader will have to do 20% better than the buy and hold investor (30% better than the market) in order for day trading to be profitable.


Basically, if you can be correct in 70% of your trades, then day trading is worth while. Otherwise, you are better off buying and holding.


Thoughts? Criticism?

thanks!


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## tygrus (Mar 13, 2012)

I am starting to think that about equity investing in general.


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## newuser (Sep 16, 2014)

Any wealthy members on this forum make their fortune day trading? Please tell us your story.


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## tygrus (Mar 13, 2012)

newuser said:


> Any wealthy members on this forum make their fortune day trading? Please tell us your story.


Not a wealthy story, but a former friend of mine was a broker in a mid-sized firm so he had access to all the tools, quotes, research etc and he would only chance a day trade maybe once or twice a week. Sometimes he scored an easy $1000 in a day, but just as many times he had to bail on trades when they turned against him.

He had a couple rules he followed and one was to buy early in the am about 30 minutes after the market opens. Thats a time when the marker can get temporarily pounded down while people jockey positions. And his other rule was to never hold over night. He was always out by just after lunch.


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## james4beach (Nov 15, 2012)

The broker successfully trading, I can believe. There is a big difference between someone who works in this industry and you or I, who are small retail investors with no inside knowledge.

One of my friends does successfully trade ETFs for short periods and beats the market. He has specialized knowledge... In fact he works on Bay Street along with institutional traders. And he's only able to profit by using a unique edge which is something of a trade secret.

For us folks who aren't insiders: I think daytrading is doomed to fail. I think this was a fantasy that first emerged during the dot com bubble, before all the day traders lost their shirts. Then the new bull market came along, and a fresh batch of day traders were back in 2006, before they once again got wiped out.

Rinse and repeat. New bull market comes along, with a new crop of hopeful retail traders 2011-2015. Maybe they saw those vectorvest TV commercials where a 12 year old kid brags about how easy day trading is. Hilarious!


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## GoldStone (Mar 6, 2011)

Daytrading is a loser's game. In other news, water is wet.


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## donald (Apr 18, 2011)

Human dna
the odds are stacked against but human dont deal in logic in many things(driven by our animal brain)
Everyday people do vast things that have broad stats heavily against them
any person who starts a business(example) has a little under 20% to survive after 5 yrs but what new small business owner starting fresh would think like that(none)
if we as human played the logic odds game and weighed everything logically i doubt none would get married(you have a 50% of divorce)
If you think of it from a primal angle(passing ones dna to survive next generation-animal kingdom(your odds in the mating game are not so great(trying to seek out the best genes you can mate with)most have to settle under that but not without trying(in a lion pride every male is going to be driven towards trying to be the alpha but me know the all of them fail except one)
humans are humans
does not matter---logic and measuring odds is useless with our species
day trading will never go away


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## sags (May 15, 2010)

And yet, there are professional gamblers who earn a nice living by securing an edge against the odds.

If there are day traders earning huge amounts of money, I wouldn't expect they will be writing any "how to" books.

Just revealing their "secret" to the public would put an abrupt end to it.

People say that you can't win against the slot machines. The odds are against you and you will inevitably lose. They claim it is all random.......but is it ?

A guy in Montreal beat the casino for millions of dollars at the Keno machines and they couldn't figure out how he was doing it.

The tore the machines apart, examined them for any tinkering..........and found nothing wrong.

Finally after yet another big win, the casino refused to pay the guy and he took them to court.

In court the casino was forced to reveal that the slots weren't totally random, despite what is often claimed.

By law, the casino has to guarantee a defined % payout ratio, and the machines are set up to accommodate that certain percentage.

So, they have a cycle of numbers.....tens of thousands of combinations, and then the cycle starts again. Not knowing where you are in the cycle of numbers is the "random" part.

This guy discovered that when the casino closed at night, they shut off the power to the slot machines and they reset back to the beginning of the cycle.

By carefully observing when the casino opened in the morning..........how many "spins" it took for the machine to pay a "hit" of some sort, he learned when each hit would take place.

Then all he had to do was sit down.........play the minimum coins until a winning spin was due............and play maximum bet. Voila..........big winnings.

The casino claimed the guy was "cheating" because he figured out the system. The judge wasn't sympathetic to their argument and they had to pay the guy.

There was another guy who used to walk into a Las Vegas casino and bet millions on a prohibitive favorite..........often a boxing match featuring a champion versus a nobody.

He would get small odds............but he was betting large enough amounts that he made a lot of money.

There used to be a story about him..........every time there was a "mismatch" boxing fight or football game.

Just saying..........most people are poor gamblers. The best gamblers know exactly what they are doing.

I think the same is probably true for day traders.


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## janus10 (Nov 7, 2013)

savvybuck said:


> *1. Transaction Fees*
> 
> In simple terms, when you buy a stock and then subsequently sell it, the transaction fee is generally $20 total. So even on a $2,000 position, the fees represent 1% of your total amount! Consider that the over the long term, the typical investor should expect 8% in returns, 1% in fees is a massive chunk of your overall returns!
> 
> ...


Don't think stocks - think options, futures, forex. I'm sure there are many daytraders who exclusively deal with stocks - none that I know do, however.

An example, 1 Nov 15 RBOB futures contract is worth ~ $58k USD but you need use only about $5,200 USD on margin. Commissions may be around $3. I'm not going to say it's trivial to catch a 1% move, but it isn't hard. The 10:1 ratio of contract vs. margin then can yield a 10% change on what you put up.

Forex is typically 50:1 from what I understand (never traded it).

If you are dealing with 2x and 3x leveraged ETFs (since you can't trade futures/forex in registered accounts) then you can realize larger moves than if dealing directly with the underlying. I've averaged 10.16% per trade on stocks/options, but a bit more than 1% per trade for futures. However, the leverage in the margin account still provides significant gains.

If you are using registered accounts, there aren't those annual capital gains drag you alluded to.

For options, bid ask spread can be much larger than what you've posted. For futures, at least active ones (not Orange Juice for example) and when dealing with prompt or near month contracts, my experience is that it is very tight - a single point (equivalent to a penny in a stock priced > $100).

The only day traders who haven't lost big are the ones who haven't lost big yet. Those with a plan may try to do it on the side (so you need the right kind of job that allows you to split your attention) until they have built up enough in a trading account (e.g. $250k), with a high enough annual growth rate (>30%), for a consistent period of time (e.g. 2 years). 

Perhaps it is similar to those that consider becoming full time pro poker players - and I mean cash game, not tournament.

All that being said, I would agree that there are more unsuccessful day traders than those who have had a good run of success. When you are typically trading hundreds of thousands, or even millions, of dollars of contracts on margin, there is a potential for a huge change in one's (mis)fortunes.


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## GreenAvenue (Dec 28, 2011)

janus10 said:


> Don't think stocks - think options, futures, forex. I'm sure there are many daytraders who exclusively deal with stocks - none that I know do, however.
> Forex is typically 50:1 from what I understand (never traded it).


I have traded forex for three years. Had to get up before London open (5 am) and did all my trades before NY open. I still do it on a small scale because I went back to school. Daytrading sounds tedious because you have to keep track of the market on a 24/7 basis. And maybe constitutional investors like to go home at 5 p.m. Well whatever suits you right. Daytraders will have their money sooner imo.


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## Moneytoo (Mar 26, 2014)

I don't have the time, knowledge and experience to day trade, but I've been questioning the superiority of "buy & hold" vs "buy the dips sell the rips" for example (and would've gladly paid $5 commission to sell POT for example when it was up 10% from my purchase price, but now it's 30% down and I'm stuck with it...)

I'm glad that we sold some winners (the only one I regret selling is Starbucks as it keeps going up - the others stayed flat or went down) I'd love to learn to swing trade - and this article makes sense to me: http://www.valuetrend.ca/the-high-cost-of-buy-hold/ (it also addresses some of your points that seemed like a faulty logic to me...)


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## techcrium (Mar 8, 2013)

Moneytoo said:


> I'm glad that we sold some winners (the only one I regret selling is Starbucks as it keeps going up - the others stayed flat or went down) I'd love to learn to swing trade - and this article makes sense to me: http://www.valuetrend.ca/the-high-cost-of-buy-hold/ (it also addresses some of your points that seemed like a faulty logic to me...)


Didn't bother reading the OP, but read this guy's article and it was total fail. 

1. He is basically saying you can time the market and uses just the last 10 years of data to "demonstrate how". AKA hindsight = 20/20

lol, that's like me basically saying real estate will go up forever and I use the last 10 years of data to show why.

2. This guy is saying that if you slowly sell stocks increment by increment, it comes out ahead than if you sold lump sum.

Except he forgot 1 key factor: When you don't sell any stocks, they all continue to compound and grow.

3. Again, another hindsight told-you-so point.


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## lonewolf (Jun 12, 2012)

There are times to place a trade & exit the same day. For example in the S&P, 5 waves up seam to be forming from the 1871.91 low. If the 5 up is a C wave of an ABC flat wave C will equal wave A & wave 5 will equal wave one of the C wave with in a 3 point range 2025 & 2028. If one was to place a trade based on a prefured count of the price pattern tracing out an ABC flat with a 5th wave down to follow they could short @ 2025 with a stop @ 2029 for a low risk high reward trade. The trade might only be on for seconds which would make it a day trade, if the market moved in the direction you postioned for it could turn into a position trade.


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## donald (Apr 18, 2011)

Slightly off topic and this is like bringing up Gretzky in a conversation asking if one can make the nhl (the odds)
If anyone wants to read a good book!read the several out there about Jessie Livermore
The man was not mortal!
one of if not the most interesting bio i have ever read finance aside
Trading did him in a couple of times and it eventually lead to him taking his life but....the man knew how to trade stocks(several times from popper to prince)
amazing accounts of his journey in trading
he was a savant(nerves of steel- the man had that in spades)


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## Moneytoo (Mar 26, 2014)

techcrium said:


> Didn't bother reading the OP, but read this guy's article and it was total fail.
> 
> 1. He is basically saying you can time the market and uses just the last 10 years of data to "demonstrate how". AKA hindsight = 20/20
> 
> etc.


Sorry, but it sounds like we read two completely different articles, so whatever


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## dogcom (May 23, 2009)

Daytrading is generally a losing game. I think one could probably do better in Vegas at least you know the odds. Generally is a generous word for it ,when really only probably one in a thousand can probably do it.


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## techcrium (Mar 8, 2013)

Moneytoo said:


> Sorry, but it sounds like we read two completely different articles, so whatever


Let me quote his exact words:

-17.3% drawdown vs. -38% on the S&P500 and -38% on the TSX from the *June 2008 peak to yr.-end 2008*
-7.5% drawdown vs. -21% S&P500, -14% on the TSX300 from *August 2011– October 2011*
less than -2% over this summer vs. double digit losses on both sides of the border (Sources: Croesus Finasoft, NBF).


He is using dates of the financial crisis 7 years ago to illustrate that in hindsight, "Hey guise! We *COULD* have sold at the top and make off with a bandit of money!"


His second part argument is that many companies stayed flat for 10+ years.

That's great, many companies like Netflix, Apple, grew exponentially for 10+ years. A daytrader like him would have sold Apple back in 2005 and missed out on the entire last 8 years of gains.


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## Moneytoo (Mar 26, 2014)

techcrium said:


> His second part argument is that many companies stayed flat for 10+ years.
> 
> That's great, many companies like Netflix, Apple, grew exponentially for 10+ years. A daytrader like him would have sold Apple back in 2005 and missed out on the entire last 8 years of gains.


Well, maybe if you read the OP, you'd at least agree that "Why lose money or make nothing just to avoid some tax? Pay the tax and take a profit – or watch the stock fall – lose capital or make little or nothing for years."

I just started reading the blog recently, so can't defend his foresight, let's see how his today's "forecast" will pan out: http://www.valuetrend.ca/canadian-banks-are-breaking-out 

Sorry, I'm not familiar with your investment style. I'm semi-active, trying to improve on my entry points even when buying index ETFs - as I believe "average 8% returns" quoted in the OP are behind us. So TA and seasonality/market timing are of high interest to me. What is your strategy?


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## Rusty O'Toole (Feb 1, 2012)

I know a guy who made $140,000 in 8 months day trading Nortel and lost it all in a week. He rode it all the way up and all the way back down.

There are times when it is easy to make money day trading like trading tech stocks in 1999 but those times are rare and abnormal.

I also remember an interview with a successful speculator who recalled making nothing but winning trades in corn one summer. It was beginner's luck. The interviewer said "it must have seemed easy" the guy said "it WAS easy". Needless to say, the winning streak did not last forever.

So, there are times when it is easy to make money day trading if you are lucky in your timing and young enough and green enough to go with it.


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## Getafix (Dec 29, 2014)

I know a guy that has almost quadrupled his money in just under a year of day trading. This guy trades leveraged 3x ETF's, which can be tricky but make it easy to scalp 2-3% gains very quickly. Since these ETF's have an inverse as well, you can quickly flip if you're on the wrong side of a trade. So it's not easy but there are some people that are doing it successfully. Sure even good day traders lose money on some trades but they're quick to cut their losses. 

I also day/swing trade, not as much as i used to since i started a new job. I've learned quite a lot and losses are a great way to get rid of your bad habits. I just checked my record & since i started in april, i've done 67 trades. 17 of those were losing trades & 50 were winners. So around a 75% win ratio. If not for a couple of rookie mistakes i made in the beginning (trading without stop losses) i would have quite a decent return. So considering i was a complete newbie when i started, trading without any indicators or stop losses it's still an ok record & probably quite a bit of good luck. 

My point being that day trading is not a complete farce as some claim it to be. If you're disciplined, have a good set of rules, can trade without emotion & stick to your plan, you can make money at it. It might not be a lot, but even achieving a measly 1% a day can quickly add up if you're winning more than losing.


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## OnlyMyOpinion (Sep 1, 2013)

Moneytoo said:


> ... I just started reading the blog recently, so can't defend his foresight, let's see how his today's "forecast" will pan out: http://www.valuetrend.ca/canadian-banks-are-breaking-out...


It's great to read all you can. The good, bad and ugly.
This guy says banks are a buy again (using ZEB to illustrate). He says they started buying last week. But in your earlier link to his Oct.5 blog, someone in the comments specifically asked him if its a good time to start buying banks or ZEB again and he said 'not yet'. 
If you sold banks (ZEB) a year ago and bought back in now ($21.81) you'd be ahead about $1.42 per unit (before buy-sell costs). But I have no doubt he redeployed the proceeds during the year to make a potful of money for people buying his portfolio services, while DIY buy-and-hold investors suffered silently. Otherwise someone might call him just another widely regarded salesman flogging his portfolio services.


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## Moneytoo (Mar 26, 2014)

OnlyMyOpinion said:


> If you sold banks (ZEB) a year ago and bought back in now ($21.81) you'd be ahead about $1.42 per unit (before buy-sell costs). But I have no doubt he redeployed the proceeds during the year to make a potful of money for people buying his portfolio services, while DIY buy-and-hold investors suffered silently.


About this time last year almost every BNN analyst (yes, I love reading all I can - and watching BNN ) was recommending TD and BNS as the best buys among Canadian "big 5/6". Coincidentally, we bank with these two, so I bought "half a position" of TD (where my paycheques go) and my husband - "a full position" (enough for a DRIP) of BNS (house of his paycheques) We bought both on the dip - as was recommended - right before they dipped more (and BNS didn't stop - still down 14% from our purchase price, not including the dividends, even after it came up a bit) "My TD" is only 2.8% down now, so I guess I'm the lucky one lol

Not the biggest mistake we made (I also bought a few oil and gas stocks near their tops, one is down 90%+), and I'm sure we'll make many more, but one thing for sure: just because someone (or even everyone) says it's a good idea - doesn't necessarily mean it is... But some ideas sound better than others 



> Otherwise someone might call him just another widely regarded salesman flogging his portfolio services.


Well, I'm hesitant to post links here (on CMF) as [almost] every time I do - someone discredits the message because it comes from the website or a person trying (sometimes inconspicuously) to sell their services. I've been watching this particular guy on BNN, and was happy to learn that he started buying on the upside a week after I "cought the bottom" - and believe there's a thing or two I can learn from him (as his was "a sure bet" while mine was a lucky one...) But not trying to convince anyone, as we all see what we want to see - but thank you for pointing out that I should also pay attention to what he says in the comments


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## My Own Advisor (Sep 24, 2012)

GoldStone said:


> Daytrading is a loser's game. In other news, water is wet.


LOL


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## fraser (May 15, 2010)

My accountant told me that she has a two clients who were day traders. The did make money on some trades. But at the end of the year they were both even or down. I suspect that it is the 80/20 rule. We stayed at a B&B in Costa Rica. The owner made his living doing day trades. He must not have been that successful is he and his wife had to operate the B&B as well.


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## blin10 (Jun 27, 2011)

a lot of day traders will tell you about how they doubled their money but will never tell you when they loose money... everyone also knows a "buddy" that makes a "ton" of money day trading, but that "buddy" never mentions bad trades


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## Getafix (Dec 29, 2014)

That's true, no one wants to tell you about their losers. Anyway the guy i'm talking about, started his own online chatroom (which i'm also on). The group is basically a bunch of day traders who met through Stock Twits, but wanted a more professional platform where they could discuss trades without having to deal with the noise on S.T. So basically it's a private chatroom where everyone shares ideas on trades, entry/exit points etc (broken up in to different rooms: bio, oil, gas, vix, etc). This guy i'm talking about, shares his daily trades real-time (with pics as proof at the end of the day). So there's no denying his track record. There's also lots of other successful traders in that community but i mentioned this guy as he's the one who has the best record so far. He has losses almost every day, but the important thing is his winners exceed his losers.


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## HaroldCrump (Jun 10, 2009)

Most threads on daytrading success end up being _I know a guy who knows a guy_...this one seems to be no exception.


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## dogcom (May 23, 2009)

For me when someone tells me how well they did gambling or day trading, the very next question I ask them is how much do they lose?

This is when you find out the bad news and the losses almost always add up to more then the winnings and usually at this point you will also find out that they have a problem.

The real winners are the ones selling the systems or the newsletters. These people also have the advantage of selling based on looking back, hindsight or history. We have to buy and sell based on what happens in the future.


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## dogcom (May 23, 2009)

sags said:


> And yet, there are professional gamblers who earn a nice living by securing an edge against the odds.
> 
> If there are day traders earning huge amounts of money, I wouldn't expect they will be writing any "how to" books.
> 
> ...



Sags are not horse racing and boxing odds set by the amount gambled going either way. In this way the casino or book maker gets paid no matter who wins. They may set the odds to start the bidding but the money coming in sets the odds.

http://www.docsports.com/current/understanding-horse-racing-odds.html

On slot machines and other machines with how far technology has come along they may now have very complex systems in place to determine payouts. I am just speculating here but when you have a club card or slip you keep using this may also effect your odds of winning. The idea is to take your money but at the same time keep you in the game. I am sure most gamblers who have a problem usually is the results of some sort of success or seeing someone succeed and day trading would also fit this mould.


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## Rusty O'Toole (Feb 1, 2012)

The point is there are times you can make big money in certain stocks for example, medical stocks have been on a tear for over a year. Someone who was smart or lucky could have made a bundle, and could have kept it if he was even smarter and luckier. The hard part is identifying these trends before they take off. Even harder is getting out before they kill you. This gets harder and harder as governments and big banks interfere in the markets, and the old indicators don't work anymore.

But, next year no doubt some segment of the market will go up (or down) like crazy and someone will make a fortune buying (or selling short).


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## Moneytoo (Mar 26, 2014)

Rusty O'Toole said:


> But, next year no doubt some segment of the market will go up (or down) like crazy and someone will make a fortune buying (or selling short).


Do you think it's time to sell Bell: http://www.theglobeandmail.com/glob...orts/article26785838.ece/BINARY/canaccord.pdf ?


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## humble_pie (Jun 7, 2009)

Moneytoo said:


> Do you think it's time to sell Bell



certainly not. Diamonds & bells are a girl's best friends.

later comes the arsenic & old lace.


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## janus10 (Nov 7, 2013)

Getafix said:


> That's true, no one wants to tell you about their losers. Anyway the guy i'm talking about, started his own online chatroom (which i'm also on). The group is basically a bunch of day traders who met through Stock Twits, but wanted a more professional platform where they could discuss trades without having to deal with the noise on S.T. So basically it's a private chatroom where everyone shares ideas on trades, entry/exit points etc (broken up in to different rooms: bio, oil, gas, vix, etc). This guy i'm talking about, shares his daily trades real-time (with pics as proof at the end of the day). So there's no denying his track record. There's also lots of other successful traders in that community but i mentioned this guy as he's the one who has the best record so far. He has losses almost every day, but the important thing is his winners exceed his losers.


I don't have a lot of experience, but this is what I've seen, too. Once traders become professionally successful (and by that I mean they have discipline, risk management, minimize emotion, and this IS their job) they become less visible to the public eye. 

One guy I now know frequented a commodity-specific public forum frequented by amateurs and professionals. The professionals rarely revealed their trading strategies and certainly not any details on their wins/losses but sometimes divulged the direction of their bets with good information on the fundamentals currently present. He almost never posts at the public forum now, choosing to open up a secret chat room and invites select people. I would have assumed that he had a bad run, and left to never be heard from again (as has happened countless times before).

I'm fortunate that I was invited in because not only is it opening my eyes to discipline, risk management, a LOT of TA, and the camaraderie of kindred spirits, but also many other commodities to trade. Traders typically prefer volatility and not all things can be volatile at all times. Kind of like going from a good 100m specialist to a mediocre decathlete.

My guess is that successful traders are: good learners; disciplined; process oriented; somewhat unemotional; well capitalized (e.g. $200k of tradeable cash); able to change their opinion based on additional facts; and focused. Ironically, a lot of successful traders have big egos, which I would have considered detrimental. But, if you are successful, then you definitely are more than 1 standard deviation from the norm so perhaps that is human nature. 

I keep thinking professional poker is a reasonable analogy - just because you keep winning your home games with your buddies, doesn't mean you can make a great living at it year after year. One of the most oft quoted lines is, "The market can stay irrational a lot longer than you can stay solvent."

Think of daytrading as a get poor quick scheme.


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## My Own Advisor (Sep 24, 2012)

Getafix said:


> That's true, no one wants to tell you about their losers. Anyway the guy i'm talking about, started his own online chatroom (which i'm also on). The group is basically a bunch of day traders who met through Stock Twits, but wanted a more professional platform where they could discuss trades without having to deal with the noise on S.T. So basically it's a private chatroom where everyone shares ideas on trades, entry/exit points etc (broken up in to different rooms: bio, oil, gas, vix, etc). This guy i'm talking about, shares his daily trades real-time (with pics as proof at the end of the day). So there's no denying his track record. There's also lots of other successful traders in that community but i mentioned this guy as he's the one who has the best record so far. He has losses almost every day, but the important thing is his winners exceed his losers.


Interesting...

I have to wonder though if some traders are that successful, then why not quit while they are ahead? 

Eventually like gambling I suspect the luck must eventually run out. No one trader is THAT much smarter than all other traders combined. I suppose there are always outliers in everything...


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## Moneytoo (Mar 26, 2014)

humble_pie said:


> certainly not. Diamonds & bells are a girl's best friends.
> 
> later comes the arsenic & old lace.


Sorry, second part is too witty for me to decipher lol As for Bell, would hate to see the only winner in my TFSA turn red with the leaves, like everything else... sigh


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## humble_pie (Jun 7, 2009)

Moneytoo said:


> As for Bell, would hate to see the only winner in my TFSA turn red with the leaves, like everything else... sigh




there are some boring old things that i keep around for their dividends plus their option sales. In effect, ([dividends + option premiums] - market volatility) is still greater than Tbill or triple A bond return, for these boring old things.

my cost base in BCE is 41.39 so there'd be a ways down before i'd fret. But with 5% or north on current BCE dividend return, surely a BCE holder has other, more grave concerns to worry about?

if it's any comfort to you, i haven't got one single thing in TFSA that isn't deep in the red, other than the call options i sold a while ago when their premiums were much higher. The TFSA collected those premiums but of course the value of those short calls has plummetted, hence the colour green.

the stocks themselves look ghastly. Of late they've recovered a tiny bit of colour following their near-death experiences. Perhaps foolishly, i'm expecting they'll survive & come back eventually.

notice that during a bear market collapse, it's obvious that almost nobody predicted how bad it was going to be. Usually only one or 2 brave souls manage to predict. We have those souls in cmf. I'm going out of my way to say this because a couple of years from now, when things are back to hunky dory, what we are going to hear from everybody & his cousin is how they all had _mountains_ of cash in mid-2015 & they all _knew_ the market plunge had stopped, so they all _bought_ & they _bought_ & they _bought_ ... 

courage with the TFSA. hang in. this too shall pass.


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## Moneytoo (Mar 26, 2014)

humble_pie said:


> there are some boring old things that i keep around for their dividends plus their option sales. In effect, ([dividends + option premiums] - market volatility) is still greater than Tbill or triple A bond return, for these boring old things.
> 
> my cost base in BCE is 41.39 so there'd be a ways down before i'd fret. But with 5% or north on current BCE dividend return, surely a BCE holder has other, more grave concerns to worry about?


I bought 100 shares for $48.50 last summer (the first stock in my TFSA ) It went down, DRIPed two shares, then went up surprisingly high for a minute, so I "trimmed" it - sold 20 shares for $60 in February. Because I didn't want to DRIP it above $53 lol So now I'm stuck with 82 shares - not enough for options, not enough for a DRIP... unless it falls below $53 - or increases the dividend  And regretting not selling it all for $60... But no, not the biggest concern - just don't want to regret not selling it for $55... 



> if it's any comfort to you, i haven't got one single thing in TFSA that isn't deep in the red, other than the call options i sold a while ago when their premiums were much higher. The TFSA collected those premiums but of course the value of those short calls has plummetted, hence the colour green.


I studied options on the website that you recommended, but the covered calls that I wanted to try weren't worth the effort, so need to grow my portfolio more...



> notice that during a bear market collapse, it's obvious that almost nobody predicted how bad it was going to be. Usually only one or 2 brave souls manage to predict. We have those souls in cmf. I'm going out of my way to say this because a couple of years from now, when things are back to hunky dory, what we are going to hear from everybody & his cousin is how they all had _mountains_ of cash in mid-2015 & they all _knew_ the market plunge had stopped, so they all _bought_ & they _bought_ & they _bought_ ...


That's what we're doing - buying, & buying, & buying  My husband even transferred his People's Trust TFSA to Questrade - to load up on equities ETFs  But - he's already making plans how we're going to sell it all "in two-three years, right before the bear market - and then repurchase at the bottom" lol So I hope our CMF permabears were wrong again - and it was just a correction (I'd prefer not to sell and sit tight either way, but my husband believes it's easy to foresee a bear - "when S&P 500's P/E hits 30, we sell!" I agreed lol)



> courage with the TFSA. hang in. this too shall pass.


Adding another 5K this week (buying more XAW - ex-Canada ETF, to offset my Canadian stocks ), 5 more K after that - and I'll finally max it out... So hanging in, thank you for encouragement


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## tinypotato (Jul 27, 2010)

I think the general public doesn't really truly understand "trading" vs. "investing".

The only similarities between the two are:

1) You must have a plan
2) The plan must suit your personality/temperment/goals
3) You must be disciplined to stick with the plan & experienced enough to know when to revise the plan

That's where the similarities end. I suspect this forum is skewed towards long-term, buy and hold investors. Absolutely nothing wrong with that. However, that doesn't make daytrading "gambling".


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## GoldStone (Mar 6, 2011)

The problem with day trading is the fuzzy math.

_"I know a guy who knows a guy who makes money as a day trader."_

So...?

I know a guy who knows a guy who works at McDonald's. He also makes money. Is it something to brag about?

Making money is not enough. Beating an index is also not enough. 

A full-time trader has to beat the index by a large enough margin to cover the foregone salary they could have earned in a regular career.

Option A: Trade full time
Option B: Hold a regular job that pays, say, a modest 50K. Invest your savings in a passive portfolio.

The trader has to beat the passive portfolio by 50K just to break even. You need a large capital base to make this doable.

For example, 200K is not enough. 50K is 25% of 200K. A trader has to earn 25% annually just to break even with a modest 50K salary. Good luck with that.

If you are smart enough to earn 25% annually as a trader, you are smart enough to make a lot more than 50K in a normal career.


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## My Own Advisor (Sep 24, 2012)

"Making money is not enough. Beating an index is also not enough."

Agreed.

If you're THAT good at day trading, you'd be smart enough to stop it while you're way ahead and not day trade at all. Otherwise, I think it's just an addiction.


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## peterk (May 16, 2010)

GoldStone said:


> A full-time trader has to beat the index by a large enough margin to cover the foregone salary they could have earned in a regular career.


Of course this comparison is not directly fair either, as day-trading is one of those mysterious coveted work-from-home "careers" that so many of us career folks like to dream about. One would presumable accept far less in financial compensation to be able to work fewer and more flexible hours from home with no corporate BS or commuting to deal with.

Day-trading just happens to be the topic that perhaps has the most information on the internet easily available and the lure of unlimited financial gains compared to just "modest" financial gains of most work-from-home ventures.

Not that I do any of it. It's hokum, as Sheldon says.


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## humble_pie (Jun 7, 2009)

Moneytoo said:


> I bought 100 shares for $48.50 last summer (the first stock in my TFSA ) It went down, DRIPed two shares, then went up surprisingly high for a minute, so I "trimmed" it - sold 20 shares for $60 in February. Because I didn't want to DRIP it above $53 lol So now I'm stuck with 82 shares - not enough for options, not enough for a DRIP... unless it falls below $53 - or increases the dividend  And regretting not selling it all for $60... But no, not the biggest concern - just don't want to regret not selling it for $55...
> 
> I studied options on the website that you recommended, but the covered calls that I wanted to try weren't worth the effort, so need to grow my portfolio more...
> 
> That's what we're doing - buying, & buying, & buying




moneyToo i didn't mean investors like yourself & husband, in recent months it appears you have been buying but it seems to be intermittent purchases of securities as funds have become available, plus a well-considered judgment that a permanent financial apocalypse is not currently happening. The foregoing does *not* add up to day trading!

btw re options, you are probably doing what most newbies do. You're looking at thinly traded options in the nearest months only. Understandably, there's no market in these. Most canadian options on the montreal exchange exhibit this profile.

one has to look at stocks with properly liquid options markets, such as US options. If one insists on dealing in an illiquid stock with thinly traded montreal-type options, one has to go much farther out in time in order to find premium. It's also helpful if one has at least 4 or 5 contracts to buy or sell.

BCE is a good illustration of this predicament. Its short term options fetch almost no money. Occasionally it's possible to sell US options in BCE with somewhat better premium, but otherwise near-term montreal BCE options are pitiful.

one has to go much farther out in time. Without looking, i'd imagine that at the moment one would have to go all the way out to the LEAPs of 2017 before one could fetch a decent price on an OTM call.

to improve the return, one can also sell a strangle (combo of an OTM call plus an OTM put). After all, with a strangle, only one side has the potential to get into trouble.

in sleepy old BCE, i might sell options 2 or 3 times a year. I might collect a current return from both options & dividend of roughly 7.5% per annum. I'm indifferent as to whether or how BCE stocks swings within a band of $40-60.

what's the point? the advantage of all this is that BCE is a stable, no-surprises, no-brainer, high dividend stock that requires almost no maintenance. It's almost bond-like. Including the options, i probably spend less than an hour per annum "managing" my BCE shares (meaning i get to spend time on more lively stuff.)

most of the above-mentioned hour is devoted, not to BCE itself, but to monitoring possible erosion of CRTC control. I believe that telephony will be deregulated in canada long before the banks, which is why i don't add to my telco position, neither am i bullish on the sector in canada. I have a few telus shares as well but their options are even worse than BCE.


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## Moneytoo (Mar 26, 2014)

humble_pie said:


> The foregoing does *not* add up to day trading!


I know, I know, that was me making fun of us buying now - and my husband thinking that the bear will come in two-three years and he'll see it coming and we'll sell everything in advance (as far as I'm concerned, the markets can crash any minute - and I'm buying fully aware that this correction might turn into a bear - this year) 

As for the real day trading, I was really interested in it a year ago (agree with peterk who called it "one of those mysterious coveted work-from-home "careers" that so many of us career folks like to dream about" ) But realized pretty soon that it's not that easy... so just "paper-trading" my favorite stock (that swings a lot), AGIO 



> btw re options, you are probably doing what most newbies do. [] one has to look at stocks with properly liquid options markets, such as US options.


Most of my stocks are Canadian, I only have two US stocks (but 50 shares of each) My accounts are too small, and my husband, whose RRSP is bigger and who has 200 shares of Apple - wouldn't try them. So need to grow my accounts first 



> [BCE] It's almost bond-like.
> 
> I believe that telephony will be deregulated in canada long before the banks, which is why i don't add to my telco position, neither am i bullish on the sector in canada. I have a few telus shares as well but their options are even worse than BCE.


And this is the root of my concern. Initially, we decided to buy dividend stocks instead of bonds. But later realized that if/when the rates start going up - the stocks may come down. When and how low - who knows. But of course it'll take years before bonds start yielding 4%+. And telcos held up quite well (I have BCE, husband has Telus) But, they have additional concerns. So I keep thinking to sell or not to sell and when to sell... and, most importantly - what to replace it with if sell?.. 

Anyways, sorry for off topic - and thank you for your posts!


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## avrex (Nov 14, 2010)

Both of these guys are correct.



peterk said:


> ...day-trading is one of those mysterious coveted work-from-home "careers" that so many of us career folks like to dream about.


Yep. We've all dreamed about finding something that could be easy and saying goodbye to the corporate bullshit.

But, then reality hits....



GoldStone said:


> Making money is not enough. Beating an index is also not enough.
> A full-time trader has to beat the index by a large enough margin to cover the foregone salary they could have earned in a regular career.
> Hold a regular job that pays, say, a modest 50K. Invest your savings in a passive portfolio.
> The trader has to beat the passive portfolio by 50K just to break even. You need a large capital base to make this doable.


All right everyone.... now get back to your regular day jobs.


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## janus10 (Nov 7, 2013)

Yesterday i was chatting with one of the guys in this small group of daytraders. He is the only one doing it full time and he trades his own account and one for a client.

This client provided access to his margin account at the beginning of May. It started in the low six figures and is up 59%. In 5.5 months.

59%.

In less than half a year.

Trading commodity and FX futures and options.

How much would you pay for that kind of performance?


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## janus10 (Nov 7, 2013)

My Own Advisor said:


> Interesting...
> 
> I have to wonder though if some traders are that successful, then why not quit while they are ahead?
> 
> Eventually like gambling I suspect the luck must eventually run out. No one trader is THAT much smarter than all other traders combined. I suppose there are always outliers in everything...


If you have the discipline to day or swing trade and be successful why would you give that up? And you don't need to be smarter than all the traders. You cut your losses short and let your winners run.

I get the impression that most of the responses here are nit based on first hand experiences. 

In every case of which I am aware, which isn't many, a daytrader that has lost big was not following their discipline methodology. The trade went against then and they continued to add capital to it. So hundreds of successful trades were wiped out by an outsized position that stayed against them long enough to exhaust their capital.

I almost succumbed to that myself earlier this year. I kept adding to a losing short position and was down about $30k. When I felt the the top was in I made a large increase to my position. Not quite all in but close. Within a week it turned into a positive $60k profit. I was so anxious to get out that I didn't let the winner run and left a lot on the table.

But I have reduced the amount of capital in any one position so things won't get so far out of kilter.

Sometimes I think if I just did the opposite I'd make even more money. After all I almost never buy at the bottom or sell at the top.


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## fatcat (Nov 11, 2009)

if day trading actually worked we would see all kinds of investment firms popping up here and there and thriving but we don't, investment firms struggle against heavy competition and mister market who is unforgiving

anyone ... anyone ....who is any good at day trading is going to very quickly find more capital because more capital means more profits ... so so simple ... and they will quickly become a mini-investment firm that strives to become a large investment firm

except we see the record of investment firms over time and they average out to be about as good as the market, they have good years and bad years

day trading alas, ends up being pretty much exactly the same

it's a fantasy, nothing more, in the end, the market wins

if you want to make money in day trading, sell stuff to other people who want to make money in day trading, newsletters, software programs and websites ... there are millions of them

thats how you make money in day trading


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## Nordic (Dec 17, 2014)

janus10 said:


> Yesterday i was chatting with one of the guys in this small group of daytraders. He is the only one doing it full time and he trades his own account and one for a client.
> 
> This client provided access to his margin account at the beginning of May. It started in the low six figures and is up 59%. In 5.5 months.
> 
> ...


If the Daytrader is being compensated by the client, he's very likely providing discretionary portfolio management without being registered, which is illegal.... All it takes is for the client to have a bad year and file a complaint with regulators, and the daytrader could face a significant monetary penalty.


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## tinypotato (Jul 27, 2010)

The problem is generalizing in absolutes....

Expecting success at daytrading with no effort, no risk (i.e. easy money) is not realistic. The odds of being successful that way is slim....

Working at trading, studying the market, understanding your psychology and adjusting your plan to suit yourself...THEN applying disciplined approach to consistently trade when your plan lines up MAY be a route to success...

Basically, if you're looking at daytrading as easy-money to get-rich-quick and escape work. Then you're likely to fail. If you're looking at daytrading as your business, willing to put in tonnes of WORK...then you may be able to make it work.

Not all daytraders fail. Not all daytraders succeed. Same as everything in life.


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## Afp (Mar 19, 2013)

GoldStone said:


> The problem with day trading is the fuzzy math.
> 
> _"I know a guy who knows a guy who makes money as a day trader."_
> 
> ...


This is brilliant. Thank you GoldStone. I used to trade a lot when I first started but unfortunately, successful investing in the stock market has no drama. It's boring. Boring high quality dividend growth stocks that continue to slowly and reliably increase in value over time. Luckily, it didn't take me long to realize I should stay away from drama, stick with boring high quality dividend growth stocks. Just buy them whenever they are relatively cheap and never sell them.


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## janus10 (Nov 7, 2013)

tinypotato said:


> The problem is generalizing in absolutes....
> 
> Expecting success at daytrading with no effort, no risk (i.e. easy money) is not realistic. The odds of being successful that way is slim....
> 
> ...


One of the best responses here, especially compared to ones which hype statements which are factually incorrect.


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## The_Tosser (Oct 20, 2015)

What is this 'market' you people speak of that we're supposed to be trying to actively beat? (or i should more correctly state that some people are trying to actively beat)

What is the benchmark here?

Are you guys using the same benchmark or is everyone comparing ideas using a different units of measure? Maybe i missed it.


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## Eclectic12 (Oct 20, 2010)

Some posts are using the particular market's index as the benchmark. For example, trading on the TSX means beating one of the TSE indexes.

I believe the idea is that to make the day trading worthwhile, it would have to beat what one could do by buying an ETF or similar low expense product.


Cheers


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## The_Tosser (Oct 20, 2015)

Eclectic12 said:


> Some posts are using the particular market's index as the benchmark. For example, trading on the TSX means beating one of the TSE indexes.
> 
> I believe the idea is that to make the day trading worthwhile, it would have to beat what one could do by buying an ETF or similar low expense product.
> 
> ...


Ah OK thanks.

Well, given that parameter then i really do not see how people can say this or that in day trading can or can't be done without first being specific enough to warrant the conclusion.

All i really see here is a pile of standard light-weight Pavlovian book-answers because it's easier to write out what you've read 1000 times vs actually think about what one is saying.

There are untold amount of trades and ideas that can be done that will best Major US and CAD indexes, but it starts with NOT trying to beat an index using the vehicles *within* that index. I'm not sure where that would stand in this thread. Would this be 'cheating?' lol well maybe so but if it can and is being done then my guess is many would opt for putting in the mild effort to long-run best most long-run index returns.

I think the real question is what is the best risk-adjusted return to be found. This question posed @ post 1 just way too wide open to be answered except everyone making up their own rules and goal posts.

Maybe on another note to be discussed later, I question those that think effort is always and directly proportional to results. Again there are copious amounts of studies to be read out there that prove time and again that program-trading beats human effort a vast majority of the time. I won't get into it here beyond a mention, but I can and do allow several programs to run unattended (read: head off to your job and let it do its thing), which is the picture of a lazy-man approach. Of course the initial 'work' going into the program has be pretty good to begin with man man-to-machine it's gonna beat you all else being equal.


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## Moneytoo (Mar 26, 2014)

The_Tosser said:


> There are untold amount of trades and ideas that can be done that will best Major US and CAD indexes, but it starts with NOT trying to beat an index using the vehicles *within* that index. I'm not sure where that would stand in this thread. Would this be 'cheating?' lol well maybe so but if it can and is being done then my guess is many would opt for putting in the mild effort to long-run best most long-run index returns.


Care to elaborate?  Maybe in a new thread...


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## jollybear (Jun 28, 2015)

The_Tosser said:


> All i really see here is a pile of standard light-weight Pavlovian book-answers because it's easier to write out what you've read 1000 times vs actually think about what one is saying.


Maybe don`t start by insulting members that responded to this thread.........many are extremely knowledgeable investors. 

Question about the algorithmic trading system you`re referring to.............do you not think the people that write these programs would have acquired so much wealth by day/swing trading with their "winning formulas" they would have no need to sell stock analysis computer programs?


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## dogcom (May 23, 2009)

A system can work as shown in the past but it doesn't account for changes in long term trends, systemic risk, bull to bear to bull markets or government intervention into the market. So a system could have you making all this money then something changes and the system doesn't work anymore. This is what happened during the Tech bubble which formed the first big day trading trend. Many made money and then lost it when the trend gave way. 

This is where only the true superstars can make it through because they can adapt and change to the new reality and everyone else quits or loses a lot of money.


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## dogcom (May 23, 2009)

I don't think smarts and knowledge is enough for day trading success. One has to have an instinctive eye for it that comes natural to them. This is not something that someone can teach you. Forum members would be day traders if smarts and knowledge was an important factor so The Tosser can only expect these kinds of answers.

So the smart knowledgeable thing for forum members to do, is not to day trade.


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## The_Tosser (Oct 20, 2015)

jollybear said:


> Maybe don`t start by insulting members that responded to this thread.........many are extremely knowledgeable investors.


Pure logic my friend. I don't know how it is you guys got this far into it without someone asking the same thing. I don't care how 'knowledgeable' someone is, if they can't and haven't defined the field then you don't and can't have an answer that is worth anything.

It's really that simple.

So I'll ask you to tell me what these folks mean. Would it be OK to short term trade (you may also need to define 'day trade' since if one traded a few times a week would this be enough?)... securities that are derivatives of an index and if proven over a lengthy enough period be called a 'win' for short term trading over buy and hold of that index?


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## The_Tosser (Oct 20, 2015)

dogcom said:


> I don't think smarts and knowledge is enough for day trading success. One has to have an instinctive eye for it that comes natural to them.


We like to think we have instinct that is of a positive influence to the bottom line. I mean i really want to believe it. If it's just you and I and we're speaking in hushed tones i would tell you I really do believe in it. 

But i believe cold hard studies more. As unbelievable as it is to me, it's been shown that a set of 'coded' instructions will best even the most long served knowledgeable trader. All I know is when i start to think about this i know i am on shaky ground siding on the side of the human instinct over machine. I don't trust 'us' to not screw it up.

I'll also add what is generally accepted as trading knowledge for the most part when it comes to profitability, is mostly useless. I agree with you there completely.


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## Moneytoo (Mar 26, 2014)

RFD Forum got the teacher: http://forums.redflagdeals.com/trading-idea-based-graham-tsx-1682065 - and we've got the disser...


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## dogcom (May 23, 2009)

To me day trading is buying and selling positions over a day or two but mostly in and out in that trading day.


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## The_Tosser (Oct 20, 2015)

Moneytoo said:


> RFD Forum got the teacher: http://forums.redflagdeals.com/trading-idea-based-graham-tsx-1682065 - and we've got the disser...


Now that guy has put some time into it. I didn't read it all but at the very least you can tell he's got his version of investing down to the point that you could likely codify it. When i get a chance for interest sake alone I'm going to go over it in more detail.


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## The_Tosser (Oct 20, 2015)

Moneytoo said:


> Care to elaborate?  Maybe in a new thread...


As per dogcom's post just above, the trade methodology(ies) that i was referring to would not fit the parameters due to not trading enough.

I don't really know even though i guess i should, but we do for certain, several hundreds of trades a year but in many instances we will hold a trade for weeks to maybe even pushing 2 months and this is dictated mainly by a rigid, programmed process. Either the market moves 'enough' or it does not. It's outside of our control but it's the market that dictates how long the trade is left on for. I would love for the market to be volatile enough for it to cause the programs to make multiple rounds trips per day but it's not the norm. I could easily flip the switch, change the parameters and force it to trade more if i wanted to.

Aside from that, it's a long tested method that has been proven over decades to best the SP500, by trading derivatives of said index. So does it beat its index reliably, yes. Risk-reward tested, yes. Is it day trading in the strictest sense that we're using here? No.


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## The_Tosser (Oct 20, 2015)

savvybuck said:


> However, if you are making 10-20 trades per month and hundreds of trades per year, those fees to come out to be very significant.
> 
> 
> I did a simple table which shows that if a stock moves up and down many times, the day trader will have to do 20% better than the buy and hold investor (30% better than the market) in order for day trading to be profitable.
> ...


OK guys i went and re-read the original post.

Savvybuck used the term day trading but then allowed for 10-20 trades a month  Hey maybe i am all of a sudden a day trader again .

No worries, my real point here is to concentrate on this idea that if a stock moves up and down 'a lot' then the active trader is screwed because of transaction costs etc.

I can say for certain that this isn't at all necessarily true and in fact can be the exact opposite results quite easily. It is completely volatility and path dependent. Neither of which the day trader nor buy and hold can know for sure but the day trader likely has considered as one of the reasons that he has decided on his vehicle to trade in the first place.

I know this because what Savvy is beating around the bush about whether he knows it or not is very much the consideration I use in some of my trade programs. Most potential securities simply do not make the grade as viable candidates if you want to employ methods that exploit the volatility.


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## Moneytoo (Mar 26, 2014)

The_Tosser said:


> Aside from that, it's a long tested method that has been proven over decades to best the SP500, by trading derivatives of said index. So does it beat its index reliably, yes. Risk-reward tested, yes. Is it day trading in the strictest sense that we're using here? No.


Too advanced for me at this point, but thank you


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## savvybuck (Feb 12, 2014)

The_Tosser said:


> OK guys i went and re-read the original post.
> 
> Savvybuck used the term day trading but then allowed for 10-20 trades a month  Hey maybe i am all of a sudden a day trader again .
> 
> ...



I don't quite understand your points.

I am saying that if someone is trading 10-20 times a month, that already represents $240-480 in fees annually (give or take)...which is bad enough


If you are trading 10 times a day...then the fees are even greater! 

$10 x 2 (buy and sell) x 5 (days in a week) x 52 = $2600

You are spending $2600 in fees alone vs the buy and hold investor.


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## dogcom (May 23, 2009)

If you are this kind of trader and hoping to make a success of it then the fees are low enough these days to make a go of it. While fees are always a factor and a concern, however they are still the cost of doing business.

Buy and hold can't be compared to this sort of business or trading because you are either going to be successful at it or lose money and lots of it. Most day traders also want volatility where as most buy and hold investors are hoping for low volatility.


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## The_Tosser (Oct 20, 2015)

savvybuck said:


> I don't quite understand your points.
> 
> I am saying that if someone is trading 10-20 times a month, that already represents $240-480 in fees annually (give or take)...which is bad enough
> 
> ...


Yes, but it does not mean that you can't earn a better return than the buy and hold simply because of the number of trades you're making.

You claim impossible, I am telling you for a mathematical fact it is not. Whatever scenario you ran to get those numbers had something in it that does not necessarily match certain realities.

To make it simple, you're telling me to start a stock @ $10 and over several months moves to $12. A great buy and hold return. 



> I did a simple table which shows that if a stock moves up and down many times, the day trader will have to do 20% better than the buy and hold investor


What i am saying depending on the volatility and path i could show you many pre-defined rigid trading programs that could very possibly strip the crap out of that $2 buy and hold gain.

What we can't tell before hand is if past volatility will be indicative of future (generally speaking higher volatility is better for the trader). What we also cannot tell you is the ultimate path (did the stock return 5%, 50%, a loss? as a buy and hold) and daily return distributions which may or may not result in added gains or losses. The number of trades you'll do is pretty much irrelevant and again you'd have to dive into the details but generally speaking the more trades you get the better your odds the trader beats the buy and holder.

The bottom line is there's no hard and fast rule @on who would beat whom, but to say because you trade more is guaranteed to under-perform buy and hold is not correct. 

It's the conclusion that people get to when they first read Jack Bogle when he discusses trading costs and end-term results. It's understandable, but it misses a few real nuances.

I will state in your defense, MOST stocks that a buy and holder would purchase are generally the worst types of stock to attempt to 'out-trade' the buy and holder. Again being nothing but a math calc, you know what inputs will give the best results. The conclusion being do not try and actively trade, say a utility stock. You need to go for a higher-beta security.


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## The_Tosser (Oct 20, 2015)

Moneytoo said:


> Too advanced for me at this point, but thank you


Here's the best single link i could find on short notice that will give you the trade. More importantly it gives you something to think about.

http://www.cboe.com/micro/buywrite/BlackRock-VIXYourPortfolio.pdf

The article is way more than just this trade. It discusses 3 similar trades and the one I was mentioning directly was the SPX put-write process that has been done for decades by many. Don't bother with the other two for now. Two are retail-ready trades the third one is OTC swaps and not a viable retail trade. Read the first 6 pages, then jump to page 10 and then maybe 14.

As they stand, these things best the SP500 pretty much all day long. It doesn't take a whole lot to enhance them either.

I think people trade stocks by default. It's what you learn first. It's what you see on financial shows. I really question that conventional thinking for those that are serious about making money in the markets. I am a fan of Jack Bogle. Buy and hold. I could listen to Bogle talk for hours and agree with every word he says. It still doesn't mean I'd do anything like what he recommends. What he does suits stocks, index investing. It's great for what it is and for what most people would be comfortable in doing. All I am saying is there's a whole other world out there that is better in terms of returns and it's such a small leap from where they are now.

To each his own. I'm just tossing it out there. It's not like i didn't get any help along the way.


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## Moneytoo (Mar 26, 2014)

The_Tosser said:


> Here's the best single link i could find on short notice that will give you the trade. More importantly it gives you something to think about.
> 
> http://www.cboe.com/micro/buywrite/BlackRock-VIXYourPortfolio.pdf
> 
> ...


Thank you very much, will copy it to my thread to study later (I plan to cover our bases using indexing and buy'n'holds, and then allocate a portion of portfolio for experimenting - core and explore as they say )


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## savvybuck (Feb 12, 2014)

The_Tosser said:


> Yes, but it does not mean that you can't earn a better return than the buy and hold simply because of the number of trades you're making.
> 
> You claim impossible, I am telling you for a mathematical fact it is not. Whatever scenario you ran to get those numbers had something in it that does not necessarily match certain realities.
> 
> To make it simple, you're telling me to start a stock @ $10 and over several months moves to $12. A great buy and hold return.


I never claimed impossible.

I specifically said that you need to overcome a $240 deficit to beat the buy and hold guy. So, let's look at the 3 points I listed.

1. Assuming 10 trades a month equals $240 a year in lost fees

2. Assuming you sell stocks and profit take, that's probably another 10% in taxes that is lost from lack of compounding

3. Also, bid and ask spread equates another 0.6%.

Say you have a $200,000 portfolio....

You probably need to be at $230,000 at end of year 1 just to break even. If you have such a system that can manage to double your portfolio to $400,000...then great! By all means continue to trade short term. But all I'm saying is that you have lots to overcome to beat the buy and hold guy.


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## The_Tosser (Oct 20, 2015)

savvybuck said:


> But all I'm saying is that you have lots to overcome to beat the buy and hold guy.


Right, you're claiming basically impossible when in fact it's not near as dire as you're playing it out to be.

Give me some time, i'll show you an example if i can make it easy enough for you to see.


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## The_Tosser (Oct 20, 2015)

Well, this is ugly! 

Sorry in advance for how it's going to show up and i promise if it bends anyone out of shape because of some posting rules etiquette I'll not do it again.

Here's the printout on a security i do trade and it's set with the parameters that i use on it. Remember as well this is hard coded and can be applied to anything you want, in an instant. The characteristics are known so you have a good idea if you understand the math, the types of securities it's best run on. I had mentioned that earlier.

I set the beginning and end dates on purpose to make another point but you could have stopped it at any point in the game with similar results. Ditto for extending it to the close yesterday.

As you'll see, it happily muddles along buying and selling at the max frequency of once a day. It traded for 9 months? and did 17 trades not incl original purchase. The portfolio was set @ $100K with a starter position of about 1/2 that in the security. Note also that it has no issues selling @ losses (it's a long-only program). It tracks # shares held, prices @ trades, # shares traded at the time and end balances.

The final result is the buy and hold fellow is more or less flat. It started @ $41.42 and ended @ $40.47 so down less than $1 per share. He has his $100K in tact. I won't quibble about pennies.

The trader is up to $106,718.60 and his commission are less than $40 not counting original entry cost. If you're going to trade and insist on over-spending with the wrong broker it's not my fault. No trader would do that anyway. They would move accounts.

I don't expect anyone to go through each trade and track it but i'll post them all if you want to do it. I just gave you the summary so ignore below if you are easily offended. You may not call this day trading. By some accounts it does not trade enough. I could tweak the program to have it trade more or less with similar results anyway. The idea is to beat the buy and hold by trading, not to add up trades for the sake of adding up trades. It matters not in the final analysis. There are very viable methods to beat the buy and hold. It's not as dire in many cases as it may seem. I stress that for best results you need to chose the security with the right properties and then 'pray' for continued volatility characteristics, path and symmetry of period returns to maximize the results.

Before posting the trade log I'll end with this thought. I do not do a trade that does not give me an edge in one way, shape or form. I allow this program to run my money, unattended.

Apologies once again for the ugliness.

(Daily)
Date is: 16/09/2014
Number of shares owned @ 41.42 is 1207
Cash value is: 50,006.06
Total Portfolio Value is: 100,000.00

(Daily)
Date is: 01/10/2014
38.25
100 to buy
Number of shares held is: 1307
Cash Portion of Portfolio is: 46,181.06
Total Portfolio Value is: 96,173.81

(Daily)
Date is: 11/10/2014
31.86
262 to buy
Number of shares held is: 1569
Cash Portion of Portfolio is: 37,833.74
Total Portfolio Value is: 87,822.08

(Daily)
Date is: 17/10/2014 
27.19
269 to buy
Number of shares held is: 1838
Cash Portion of Portfolio is: 30,519.63
Total Portfolio Value is: 80,494.85

(Daily)
Date is: 22/10/2014
32.74
311 to sell
Number of shares held is: 1527
Cash Portion of Portfolio is: 40,701.77
Total Portfolio Value is: 90,695.75

(Daily)
Date is: 01/11/2014
35.06
101 to sell
Number of shares held is: 1426
Cash Portion of Portfolio is: 44,242.83
Total Portfolio Value is: 94,238.39

(Daily)
Date is: 11/12/2014
34.03
43 to buy
Number of shares held is: 1469
Cash Portion of Portfolio is: 42,779.54
Total Portfolio Value is: 92,769.61

(Daily)
Date is: 23/12/2014
34.91
37 to sell
Number of shares held is: 1432
Cash Portion of Portfolio is: 44,071.21
Total Portfolio Value is: 94,062.33

(Daily)
Date is: 06/01/2015 
29.49
263 to buy
Number of shares held is: 1695
Cash Portion of Portfolio is: 36,315.34
Total Portfolio Value is: 86,300.89

(Daily)
Date is: 16/01/2015
26.74
174 to buy
1869
Cash Portion of Portfolio is: 31,662.58
Total Portfolio Value is: 81,639.64

(Daily)
Date is: 27/01/2015
31.2
267 to sell
Number of shares held is: 1602
Cash Portion of Portfolio is: 39,992.98
Total Portfolio Value is: 89,975.38

(Daily)
Date is: 31/01/2015
24.97
399 to buy
2001
Cash Portion of Portfolio is: 30,029.95
Total Portfolio Value is: 79,994.92

(Daily)
Date is: 13/02/2015
29.05
281 to sell
Number of shares held is: 1720
Cash Portion of Portfolio is: 38,193.00
Total Portfolio Value is: 88,159.00

(Daily)
Date is: 03/03/2015
33.85
243 to sell
Number of shares held is: 1477
Cash Portion of Portfolio is: 46,418.55
Total Portfolio Value is: 96,415.00

(Daily)
Date is: 07/04/2015
36.09
91 to sell
Number of shares held is: 1386
Cash Portion of Portfolio is: 49,702.74
Total Portfolio Value is: 99,723.48

(Daily)
Date is: 29/04/2015
42.16
199 to sell
Number of shares held is: 1187
Cash Portion of Portfolio is: 58,092.58
Total Portfolio Value is: 108,136.50

(Daily)
Date is: 22/05/2015
46.18
103 to sell
Number of shares held is: 1084
Cash Portion of Portfolio is: 62,849.12
Total Portfolio Value is: 112,908.24

(Daily)
Date is: 30/06/2015
40.47
152 to buy
Number of shares held is: 1236
Cash Portion of Portfolio is: 56,697.68
Total Portfolio Value is: 106,718.60


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## The_Tosser (Oct 20, 2015)

addendum.

Note your original buy was about $40, with the high following of $50 and the low of about $24, before heading back to $40. There was nothing malicious about that. Think of it as say, your typical resource stock that you bought at a "deal" 2 years ago as a buy and hold and it's beaten you like a rented mule ever since. Seeing as many here are TSX-Resource centered you'll get my meaning I am sure of it. 

Well actually this is better than that because at least in this case you're back to even.


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## Eclectic12 (Oct 20, 2010)

savvybuck said:


> 2. Assuming you sell stocks and profit take, that's probably another 10% in taxes that is lost from lack of compounding


Won't the day trader fit CRA's criteria so that profits have to be recorded as regular income?


Cheers


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## savvybuck (Feb 12, 2014)

Alright thanks for the response. 

From what I'm understanding is that:
Over the 9 months, you (or he the client) managed to convert $100,000 to $106,000 on a single stock through multiple transactions over the year. 

Your basis of argument is that, had the buy-and-hold investor instead bought the security and held onto it, he would have remained flat at around $100,000, give or take. Correct?


While that is an impressive job...However, here are some flaws to your proposal.

1. The timeframe is too short. A buy and hold investor relies on long timeframes in order to succeed. While you may jump 6% in 9months or even 60% in 9months, we have to compare against longer time periods...say 10 year timeframes.

2. You are using a single security as an example. I don't endorse putting your entire portfolio in a single security. A buy and hold investor would most likely own many securities across industries and countries to diversify against risk

3. Yes, your transaction costs may have been $40 but what about taxes? $6000 would be a minimum of $1000 in taxes and possibly $1400 if it is considered an employment job. So, in the next year, you only have $4600-$5000 to work with.


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## The_Tosser (Oct 20, 2015)

savvybuck said:


> Alright thanks for the response.
> 
> From what I'm understanding is that:
> Over the 9 months, you (or he the client) managed to convert $100,000 to $106,000 on a single stock through multiple transactions over the year.
> ...



Savvy, the time frame is not too short. I wrote write in there the results are the same if you ran it to today. I could run it for as long as you want. You have no factual basis to know what the program does. You're leaping to conclusions you desire to make.

Yes i am using a single security. I said that from the start. I said it several time thereafter. You need to read what is written. How many times do i have to write that if you want to day trade or frequently trade that you want to use a security that has volatility? I have more on the single security at the end of the post.

You're stretching your excuses to fit your previously defined bias. I on the other hand am telling you what types of securities one can use to more easily beat a buy and hold. I said it several times, you cannot have missed it except on purpose but i'll give you the benefit of the doubt up to this point.

3) So now you want to bring even more into the mix. Do it in an RRSP, do it in a TSFA, so what is your point now?

How is it you're intentionally trying to disprove what i just showed you as fact? Your first two points were dealt with before you asked them and the third you intentionally ignore the tax-efficient methods it can be accomplished with.

Face it friend, your initial post should not have asked for comments or criticism and instead asked only for comments that would support your previously defined bias and excel sheet thesis.

I gave you much better than criticism, i gave you results of a trade process that used a security that it works well with (why would i do something dumb and lessen my odds? that's just foolishtrading) i gave you transaction costs that were real and i gave you the spread costs as worst case on every trade made. I trade on that basis. The program sells the bid and buys the ask. It gives at every turn. It's so nice 

This is no anomaly either. I can show this 1000 times but if someone has the blinders on and doesn't really wanted to learned something that may be of use to them, 1000 more times isn't going to help. It's called willful ignorance. they don't want to learn anything. They just want confirmation.

This is why I too stress to most people, just buy and hold. Even those that think they're cut out for trading will likely fail, in part for the reason you proffer, yes. The space between the ears alone is what stops them from learning to do it well. I will bet against a day trader or 'frequent trader' every time. The odds are just too good, so in that light i agree with you completely. 

However, to think one can't out-trade buy and hold is flawed all the way to the bank in a whole pile of circumstances. People just need to be "savvy' enough to know what those circumstances are. Why would someone knowingly decrease their odds of success? I guess the point is they're doing it out of ignorance. They don't mean to be ignorant, they just are. It's not on purpose. Well OK i can accept that.

We haven't even gotten to the deeper implications of this trade and frankly the way it is going we're not likely to. I will however end on that deeper note. The trick to beating your index of choice because that's what most buy and holders use as their benchmark, is as i have mentioned before. Your life is made much harder using stocks of said index. You must use a representative derivative of the index that exhibits certain known characteristics that you can exploit effectively in many scenario's. What i am saying is you could very easily use this one security (in fact this is exactly what i do) as a preferred proxy for an entire index.

This goes way beyond your initial reason for the post but frankly who cares this is real dollars and cents to the bottom line and has teeth with respect to beating your B+H index. You can believe whatever you want about trading verses buy and hold, what i am talking about right now is beating an index reliably without a whole pile of effort. That to me is the end game I'm looking for and i suspect is the same one most are looking for. It's doable. It starts with being open minded about the possibilities and looking at anything you're doing squarely in the face and being brutally honest about it. 

For anyone with the time and willingness, you could use the results above and actually reverse-engineer the idea. It would take a while i am sure, but you've got enough info to do it. Combine that with the characteristics that suit the model and you're good to go. In fact i am running this one in reverse right now. (short). Being short has limited value. I hate it myself.

Anyway Savvy it's been a pleasure my friend but i can't put any more time into this. It's old hat to me and gets boring quickly. All the best. Your buy and hold will do you well, no doubt about it. Jack Bogle. I love the guy.


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## Woz (Sep 5, 2013)

So the programs essentially a rebalancing program that keeps a constant position size (in dollars). Buy when it goes down and sell when it goes up. It will outperform a buy and holder if the stock stays in a range, but underperform if the stock heads in one general direction, either up or down. I don’t think anyone would dispute this strategy would outperform in certain situations, the challenge is identifying stocks that are going to stay in a range. 

In fact, your example is a bit of a weird one as it’s really only a half cycle of a stock that you presumably identified trading within a range and it looks like you entered at the top of that range. If you had correctly identified that stock as trading in a range, why enter at the top.


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## Woz (Sep 5, 2013)

Also, I’d add that I wouldn’t really consider that day trading or even trading volatility. You’re best case scenario is the same as the buy and holder, that the stock heads steadily higher. If you’re trading volatility then you should profit when it’s the most volatile, not just outperform a buy and holder when it’s the most volatile.


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## Moneytoo (Mar 26, 2014)

The_Tosser said:


> Anyway Savvy it's been a pleasure my friend but i can't put any more time into this. It's old hat to me and gets boring quickly. All the best. Your buy and hold will do you well, no doubt about it. Jack Bogle. I love the guy.


Before you get pegged as a scammer who buys T-Bills and tries to sell his program to day-traders-wanna-be's - I'm genuinely curious why someone like you would join a forum like this?  And sorry for my initial reaction to your posts in my thread - I thought you're just another indexer who read the couch potato website and believes that ignorance is bliss and will outperform any other strategy, so one shouldn't even try to do better... hope you'll stick around!


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## fatcat (Nov 11, 2009)

Moneytoo said:


> RFD Forum got the teacher: http://forums.redflagdeals.com/trading-idea-based-graham-tsx-1682065 - and we've got the disser...


thanks for that, it's well known that bogle, peter lynch and buffet all got their start on red flag deals ... there is some deep investment knowledge on that board

peter lynch built his fortune on a nifty little program he put together on his mac plus

he ran the damn thing while he worked his regular job running a taco bell

the money keep piling in so he got into the investment business 

sweet ...


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## Moneytoo (Mar 26, 2014)

fatcat said:


> thanks for that, it's well known that bogle, peter lynch and buffet all got their start on red flag deals ... there is some deep investment knowledge on that board


Yeah I was hoping we can have something similar on CMF - someone leading the way, with those who want to learn, try or just watch following... a safe thread, where traders won't be called gamblers


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## techcrium (Mar 8, 2013)

Moneytoo said:


> Yeah I was hoping we can have something similar on CMF - someone leading the way, with those who want to learn, try or just watch following... a safe thread, where traders won't be called gamblers


If you didn't know...he was being sarcastic.


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## Moneytoo (Mar 26, 2014)

techcrium said:


> If you didn't know...he was being sarcastic.


Yeah I didn't notice - busy at work while getting sick, was pleasantly surprised but read diagonally blah-blah-blah


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## 1980z28 (Mar 4, 2010)

savvybuck said:


> Now I am not against the idea of day trading in theory.
> 
> 
> Thoughts? Criticism?
> ...


I have and will tried this Gambling going forward
Would like to start with high volume stocks such as banks as if it goes wrong I can wait,swings will be only a dollar or less

Example do a TD trade at open for 1000 shares maybe 54000 if it goes to .50 sell you get 500,,,,,is 500 minus cost and tax in one trade worth it,,,just a though

I have always buy and hold for the last 35 years

As I get older I have more time to do Gambling can take a hit to the downside,wont lose any sleep


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## SpendLessEarnMore (Aug 7, 2013)

savvybuck said:


> I don't quite understand your points.
> 
> I am saying that if someone is trading 10-20 times a month, that already represents $240-480 in fees annually (give or take)...which is bad enough
> 
> ...


I just started trading last month and racked up over $2000 in commission in September alone. This month probably at least $1000 in commission at Interactive Brokers.

By that definition I must be a day trader though I don't see myself as a day trader. I don't follow charts or do technical analysis. I hold most my stocks over couple days or longer.

I've cut back to less than 10 trades recently. Don't want to be labelled day trader this year for tax purposes but next year I may go full throttle.


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## MrMatt (Dec 21, 2011)

SpendLessEarnMore said:


> I just started trading last month and racked up over $2000 in commission in September alone. This month probably at least $1000 in commission at Interactive Brokers.
> 
> By that definition I must be a day trader though I don't see myself as a day trader. I don't follow charts or do technical analysis. I hold most my stocks over couple days or longer.
> 
> I've cut back to less than 10 trades recently. Don't want to be labelled day trader this year for tax purposes but next year I may go full throttle.



Okay, for all those commissions, what was your starting and ending balance?
What types of returns, in absolute and % portfolio growth did you see?


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## jollybear (Jun 28, 2015)

SpendLessEarnMore said:


> I just started trading last month and racked up over $2000 in commission in September alone. This month probably at least $1000 in commission at Interactive Brokers.


@Spendlessearnmore: For September would you say you did more than 200 trades? NYSX and TSX? Just comparing IB commission rates to what I pay.


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## humble_pie (Jun 7, 2009)

idk, i think maybe we're getting all these day trading touts because there are no interest rates paying anything any more, energy stocks with dividends are already destroyed, other stocks are being destroyed in sector rotation, europe is broken & the rest of the planet is on fire with revolutionary wars.

this leaves canadians desperate for how to get investment performance. Ah, day trade, they think to themselves.

maybe smoking & pilfing are less costly, though.


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## SpendLessEarnMore (Aug 7, 2013)

MrMatt said:


> Okay, for all those commissions, what was your starting and ending balance?
> What types of returns, in absolute and % portfolio growth did you see?


I started with $157k beginning of September. End September $171.5k. Currently I'm at $192k cost including $7500 dividends. Don't know what absolute is but my market value is $193.3k.

Again I just started less than 2 months so maybe I got lucky. It was never my intention to trade as much but when I see an opportunity I grab it. % portfolio so far is 21.51% which includes $500 in interest paid so far and about $3700 in commission paid.

I guess we'll have to wait for 1 whole year to get more accurate numbers.


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## SpendLessEarnMore (Aug 7, 2013)

jollybear said:


> @Spendlessearnmore: For September would you say you did more than 200 trades? NYSX and TSX? Just comparing IB commission rates to what I pay.


I enter all my trades in but some of them I group them all to get average value for the day. It's showing me 242 trades for September so it's more than 242.

I do just TSX for now because I'm comfortable reading the tsx tendencies and the success I have so far. Buying/Selling 200 stocks I pay $1.135 so I pay usually $0.005675/stock but sometimes they have ecn fees.


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## jollybear (Jun 28, 2015)

Thanks for the info......I pay a $6.95 flat fee. Congrats on your success, here`s to more market volatility!


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## SpendLessEarnMore (Aug 7, 2013)

jollybear said:


> Thanks for the info......I pay a $6.95 flat fee. Congrats on your success, here`s to more market volatility!


I used to trade with Questrade's $4.95 flat I think it was couple years ago. My plan is to use both Questrade's for large volumes and InteractiveBrokers for smaller volume, higher price stock. I was planning this November but might have to put it off to 2016.


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## techcrium (Mar 8, 2013)

SpendLessEarnMore said:


> I started with $157k beginning of September. End September $171.5k. Currently I'm at $192k cost including $7500 dividends. Don't know what absolute is but my market value is $193.3k.
> 
> Again I just started less than 2 months so maybe I got lucky. It was never my intention to trade as much but when I see an opportunity I grab it. % portfolio so far is 21.51% which includes $500 in interest paid so far and about $3700 in commission paid.
> 
> I guess we'll have to wait for 1 whole year to get more accurate numbers.


That's impressive, however, I notice from your blog that you had massive losses from day trading 2 years ago. So, you can't omit your losses and simply say you started just 2 months ago...

You currently have a networth of $234,000 vs $200,000 in 2013.

With a $150,000 portfolio, had you bought and held a bunch of stable blue chip stocks in 2013, today you should be sitting at around $300,000 networth minimum.


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## SpendLessEarnMore (Aug 7, 2013)

techcrium said:


> That's impressive, however, I notice from your blog that you had massive losses from day trading 2 years ago. So, you can't omit your losses and simply say you started just 2 months ago...
> 
> You currently have a networth of $234,000 vs $200,000 in 2013.
> 
> With a $150,000 portfolio, had you bought and held a bunch of stable blue chip stocks in 2013, today you should be sitting at around $300,000 networth minimum.


2 years ago I only had about $30k to invest with mostly in RRSP. I didn't have a big $150k margin account like I do now that I can diversify with.
Most my netvworth was tied in 2 rental properties. 

Hence why I say I started this $150k margin account portfolio 2 months ago. Yes 2 years ago I got lots of experience but with low capital. 

I haven't checked my past history but I haven't worked from 2013 to 2015 and my networth has gone up $34k or 17%? I'm happy with that considering all the expenses I had during that span with getting married and having a daughter.


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## Getafix (Dec 29, 2014)

Getafix said:


> My point being that day trading is not a complete farce as some claim it to be. If you're disciplined, have a good set of rules, can trade without emotion & stick to your plan, you can make money at it. It might not be a lot, but even achieving a measly 1% a day can quickly add up if you're winning more than losing.


So since i made that post in October i thought i'd check my day trade record. So far i've made 14 trades (all profitable) in around 6 weeks for a total gain of approximately 12%. I would have done a lot more but with my job the only days i can trade are on my two days off which thankfully are weekdays. 

This is all using the same leveraged biotech ETF. If i had bought the same ETF on 28th September and held till today, my total gain would be 0.46%. By trading in & out i've significantly outperformed that. I know that just 6 weeks record doesn't prove much but i'll try & post my results again in a month or two to see if i can keep up these gains.

Screenshots of the trades in case someone might think i'm making these numbers up:


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## Shlomo (Dec 16, 2015)

Wow,... You guys are freaking me out a bit! (LOL)

I used to Day and Swing starting back in 2003 (Heavily after 2005) and had fee's of $25 to $29 each side! (depending on broker). I made nice coin back then and am just getting ready to get back into trading again this year (severe health issues required a long hiatus). The thing that seems to be missing here is that almost EVERYONE on this thread is concerned with 'long positions' and making comparisons as such (Index's, Blue Chips, etc..). I too made most of my money on long 'day' positions as it has always been easier to trade, but my short 'day' positions made my portfolio grow in shorter periods of time, especially in down markets, during earnings and of course with 'bad news'. It wasn't uncommon to trade the same stock multiple times in a single trading day (long and short), but now things look much 'stranger' and the trading waters are much 'muddier' than they were back then (super high frequency trading, etc..). Having traded almost 'exclusively' in short term positions I find it difficult to believe that so many people don't actually day trade anymore and to be honest I thought there would be a LOT more Day Trading and Scalping these days. Have things changed that much since 2008 when speaking of short term trading? I only ask since it appears that most don't have much good to say about Day Trading as a whole and ironically it was always good to me.... (good enough not to go back to my $200.00 / day job back then).

Cheers,


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## Eclectic12 (Oct 20, 2010)

The challenge is that a lot seem to jump into day trading without enough knowledge or resources.

I remember back around 2000 a G&M article where a day trader in tech stocks complained about the unfair advantage others had and later in the article indicated he was using a run of the mill bank brokerage account. 

What a recipe for disaster! Back then, a live trader had to review all online orders due to the securities rules. Sure enough, it was how long it took to liquidate when the tech market as a whole headed south that he indicated was a major cause of his problems.


Cheers


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## OnlyMyOpinion (Sep 1, 2013)

Shlomo said:


> ... difficult to believe that so many people don't actually day trade anymore...


Maybe its just you and HAL (computers and algorithms) that are left out there day trading? :disillusionment:


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## Shlomo (Dec 16, 2015)

OnlyMyOpinion said:


> Maybe its just you and HAL (computers and algorithms) that are left out there day trading? :disillusionment:


LOL.. well aside from yourself, I assumed that most realized that this was more of an attempt at humor/sarcasm than a factual statement. 

My guess is that there must be significant differences in the way Day-Trading occurs now VS 8-10 years ago. The tools are certainly more advanced and the ordering system is definitely further up to date in terms of complexity and ability. I can only surmise that because of this and much lower fees, Day-Trading must be even more popular than years previous. The 'shorting side' of the equity market still seems to be at least as difficult as it was years ago (through online brokerages) and that seems 'odd' to me. Of course market rules and regulations are made to favour the 'Market Makers' and that should come as no surprise when speaking of market manipulation, but I digress...

Cheers,


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## godblsmnymkr (Jul 15, 2015)

so many misinformed people ITT.
you're comparing trading profits to benchmark ETFs? you have no idea what you are talking about. yes 9/10 traders fail. yet it is a very difficult to make a living at it, but it can be done.


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