Author Topic: Been day/swing trading my retirement account  (Read 7501 times)

secondcor521

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Re: Been day/swing trading my retirement account
« Reply #150 on: May 12, 2019, 10:49:28 AM »
^ Right.  Regarding your last paragraph, I understand what you believe; I'm more focused on how you tell if your beliefs are accurate to the world as it is.

I think stop losses, both on individual trades and on the overall strategy, are a smart idea.  I worry a little bit that your strategy stop loss is something you might change your mind on if that day comes.  Based on your statement that I quoted previously, I was worried that you might decide that daytrading works but you're just doing it wrong and once you learn from your individual mistakes your results will turn around again.

My freshman year roommate set limits on his drinking, but repeatedly decided to adjust those limits so he could drink more.  I hope you stick to your limits.  Right now it sounds like you will, but who knows what the future holds.

Good luck.

Financial.Velociraptor

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Re: Been day/swing trading my retirement account
« Reply #151 on: May 12, 2019, 11:42:29 AM »
Your strategy to employ trailing stop losses is a good one for day trading.  Your strategy to go all in, is not.  A single flash crash in your active trade can blow up your portfolio.  There would likely be no recourse.  Stock trading distributions are not "standard normal".  They have enormously long tails.  Don't bet more than you can afford to lose on any trade is good advice for any strategy whether day trading or not.

JenniferW

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Re: Been day/swing trading my retirement account
« Reply #152 on: May 12, 2019, 11:34:56 PM »
Your strategy to employ trailing stop losses is a good one for day trading.  Your strategy to go all in, is not.  A single flash crash in your active trade can blow up your portfolio.  There would likely be no recourse.  Stock trading distributions are not "standard normal".  They have enormously long tails.  Don't bet more than you can afford to lose on any trade is good advice for any strategy whether day trading or not.

When you say flash crash and wiping out my portfolio, do you really think it's possible for say a stock which is currently trading with a volume of millions per day could crash 50-90% in a matter of a second, gapping down that far past my 2% stop loss?  I've never seen anything like that.   I don't intend on trading stocks with an average volume of less than 1m.

I'm not interested in penny stocks, I've seen some videos of people doing that and it's nuts, good chance to blow an account that way.  I saw one guy bet $175k over a few buys pre market and the stock went up like 30% in matter of 9 mins before he sold -- the same guy admitted to having blown his account in the past on a single trade.  This is something I never intend to do.   I'm sticking to listed stocks with a lot of volume and decent amount of market cap.  Keeping my gains small and less risky.

Right now I am risking it all because I want to get past 25k as soon as possible to avoid PDT rule.  Also commissions slow down growth the less you have.  Trying to improve both situations.  I'm being as careful as I can.

EDIT: Thought more about what you said: "don't bet more than you can lose on a single trade".  Thing is ALL my money was in VTI. And, with the current market conditions, I feel I have a stronger chance of losing money in it than day trading.   Again I'm up 17% in my Roth IRA compared to 2% in my Roth 401k (VTSAX) since March 5th.  If I had stayed in VTI, since the first of the month I would of lost 3%, but instead I gained 5.3%, a difference of 8.3%.  I don't see what the problem is (or real risk) in actively getting in and out of intraday positions of a stock which currently a great company, with their shares currently in high demand, on a day with good positive market direction, with high volume.  I am really going to focus on the best of the best stocks on an intraday basis.  Again, no penny stocks, or low liquidity stocks for me.  For days where market is dropping hard and I can't find a viable day trade of a good company, I have SQQQ (or the like) to short the market, which has been trading like 25-50m shares a day lately.. incredibly liquid.
« Last Edit: May 13, 2019, 12:26:42 AM by JenniferW »

ChpBstrd

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Re: Been day/swing trading my retirement account
« Reply #153 on: May 13, 2019, 09:42:00 AM »
I’ll rephrase and illustrate what I think @Financial.Velociraptor and others are saying. The stock market is kind of like a very busy roulette wheel. One can often make what appears to be “consistent” profits betting on both black and red, and take the money of the people betting on green. Mathematically, you will win this bet 94.7% of the time, pulling in a couple percent at a time, putting down $36 and winning $2. However, you are placing a lot of money at risk in the event the ball lands on green. This green event is both unlikely and inevitable. Its expected frequency is about once every 20 turns, but because random returns do not necessarily look like random returns, it is possible to go hundreds of turns without hitting green.

Given this game, we can make a couple observations:
1) It is possible for a person to win hundreds of times in a row, lose twice in a row, etc. Any such result would be random and as likely as any other specific sequence, despite the expected frequency of green being just 2 in 38.
2) It is unwise to infer that a strategy has a positive expected value simply because of a long winning streak.
3) Roulette has a very simple, visible mechanism with odds that are easy to calculate. A casino that could obscure the odds-generating apparatus with complex rules, flashing lights and noises, closed boxes, etc. could force people to rely on inference rather than calculating the odds, because past results become the only information available. Thus a slot machine or game becomes “hot” when people observe a random sequence of wins.
4) No matter how low the odds of losing, a strategy that involves reinvestment of the entire pot will inevitably lose the entire pot. E.g. if we play double-or-nothing coin flip for your entire net worth, you might randomly win several times in a row, but going broke is still inevitable. This fact does not change if the odds are 50% in your favor or 99%.
5) Risk increases as a factor of number of exposures. The odds of winning the red+black Roulette strategy described above once is 36/38=94.7%. If, in the event of a win, you will be betting all your money plus winnings again, your odds for that next roll are the same, but the odds of winning both are .947 x .947 = 89.7%. A 3-roll strategy yields 84.9%. If you plan to roll 4 times and then quit, it’s 80.4% and so on. At .947^10 the odds of winning all rolls drops to 58%. At .947^100, the odds of a winning streak become 0.4%.
6) Unlike a Roulette bet or options contract, stocks are unlikely to go to zero in a short timeframe (odds = asteroid or nuclear war). Also, the gains/losses are a linear function rather than binary. However none of these differences change the applicability of the above observations. If you want to assume stocks can drop no more than 20% per day, just set your capital at risk as 20% of the funds you tie up, and the odds work the same.

Here’s what I’m hearing so far: You’ve found a trading strategy which has yielded many wins in a row.  By inference, you have concluded that the strategy has a positive expected value, and resolved to make many more such trades. You have not run tens of thousands of Monte Carlo simulations or analyzed the risk profile, because such info is unavailable or obscure and you are not a hedge fund with hundreds of interns with MBAs and computer science degrees willing to find and analyze the data. You have rationalized taking dozens or hundreds of risk exposures by pointing out that stocks are unlikely to go to zero, but you have not defined the amount at risk or the odds of different risks. You are in a casino and doing well at the moment.

Stimpy

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Re: Been day/swing trading my retirement account
« Reply #154 on: May 13, 2019, 10:08:18 AM »

 Thought more about what you said: "don't bet more than you can lose on a single trade".  Thing is ALL my money was in VTI. And, with the current market conditions, I feel I have a stronger chance of losing money in it than day trading.

One last though for you (and it's a big one.)

Are you going to FIRE?   Or are you just trying to make a buck?

The thing is, most everyone on this forum is a long term investor.  Doesn't matter if we have everything allocated to ETF's, Stocks, Bonds, Real estate.  We believe that if we give up a buck today, tomorrow we can get 10.   The LONG game = a winning game more often then not this has been proven many times.   By NOT investing in an ETF like VTI, your risking a lot.

Lets take today, May 13, 2009.  The market is crashing, personally I think it's kinda funny but I am weird.  You could probably day trade by shorting the market, and walk away with ahead quite a bit but i am betting your not going to do that.

As for VTI (as of this moment per Seeking Alpha)  it's down 2.4%. IF you had just invested  Friday you would be down.  However, your not losing money.  Why?  Cause you didn't sell.  Hell, it might drop another 40% and you STILL would not have lost money.  BUT you know what you would have?  An opportunity to buy cheap stock, or in my case, cheap income as I prefer dividends, either way if you just wait, you will gain back that theoretical 42.3% drop + what was paid by the dividends (all reinvested of course).

Now lets take your day trading.  You kept your losses at oh, lets say 2% max per trade.  Over the entire period the market drops (for that theoretical 40% drop), you would have lost how much REAL money?  My guess is at least several thousand.   And you can't even claim that loss on your taxes, Thanks IRA!   You can argue that you'll get it back plus more on the way up.   Sure.  Lets say you do that and come out ahead slightly, cause your gifted....

But let me factor 1 more issue in the equation.  Time spent.  For the ETF you might have spent a whole what.... 30 minutes dealing with the ETF if your doing this all manually.   But for your day trading you spent days worth of time watching screens, looking for signals, etc.

Which way lost more money when all is said in done.  Day Trading, why? Time = Money.

Now it's clear your going to day trade.  And while we can't tell you what to do with your money, I (and I assume everyone else reading this thread) would like to plead with you to invest MOST of your money back in to VTI or some equivalent.  We won't stop you from day trading, but IF you really want to FIRE or at least FI, you need to play the long game. 

Also I believe someone already posted it else where, but see the worst market timer ever and see how they did.  They could have retired VERY nicely, despite always getting in RIGHT before the market crashes.

https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/  (One of may of the same article all over the web)

Also ChpBstrd is comparing your day trading to casino.  He's got the right of it.  You won on your first slot machine.  Go ahead, keep playing. BUT know that eventually you will lose.   Again, this is WHY you should invest in to VTI (or equivalent) so you don't lose it all.

waltworks

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Re: Been day/swing trading my retirement account
« Reply #155 on: May 13, 2019, 10:19:51 AM »
Guys, she's not going to listen. Might as well save your breath. She's been losing money trying to invest for 20 years - if the lessons haven't sunk in by now...

-W

J Boogie

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Re: Been day/swing trading my retirement account
« Reply #156 on: May 13, 2019, 10:49:33 AM »
  I don't see what the problem is (or real risk) in actively getting in and out of intraday positions of a stock which currently a great company, with their shares currently in high demand, on a day with good positive market direction, with high volume.  I am really going to focus on the best of the best stocks on an intraday basis.  Again, no penny stocks, or low liquidity stocks for me.

Just to give a good recent example that really hits home for me - 3M (my employer and also my largest single stock holding as I have a little over 1 years worth of monthly purchases). By most any account, a great blue chip company with a strong balance sheet. Shares were in high demand until April 25th, and they went from $219 to $190 in a couple hours. They're at 175 right now.

Granted, you could have a Stephen Tusa like nose for shorting industrials, but he's kind of an industrial permabear. There's a view that industrial stocks benefit from an unearned halo of perceived stable value, when in reality they lack the growth potential of tech and but are liable to suffer from cyclical downturns, slowing growth in China, etc.

Top it off with the fact that 3M is #7 on the Dow Jones index, and receives more passive inflows than most companies - those inflows can mask the sentiments from active investors who might have seen this 3M crash coming after 4 or 5 consecutive earnings misses that weren't quite big enough to move the needle as guidance was never really slashed like it was on the 25th.

Point being, things can seem all fine and good at a company when really they're not. Unfounded bullish sentiments can push a stock price far past fair value, and you won't notice it until everyone else does.

But I sympathize with your desire to get your money of index funds that Jack Bogle himself predicted modest returns from. So do what I do. Create an IPS that allocates your capital based on the current shiller PE ratio. When PE ratios are high like this, I allocate roughly 70% in small/mid and undervalued large cap REITs with a target return of 6% or higher unless dividend growth history promises greater long term returns. I have 15 or so REITs I spread it between. Brad Thomas is probably my favorite REIT specialist, but I don't follow any of his retail recommendations.

What does this do for me? Well, I like to think of my invested capital as productively making money for me. Sometimes the stock market feels like the only money that you're making is from speculation-based appreciation, even though there is an underlying productive asset. A REIT must pay out 90% of its taxable earnings* so you're getting the profits just like a business owner should. I don't mind having my money in the slow and steady lane for a little while as long as I know what I'm getting.


*Yes, there is fungibility as depreciation is expensed and tax liabilities are driven as low as possible, but still. The goal is to pay investors dividends.






Financial.Velociraptor

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Re: Been day/swing trading my retirement account
« Reply #157 on: May 13, 2019, 08:39:22 PM »
I’ll rephrase and illustrate what I think @Financial.Velociraptor and others are saying. The stock market is kind of like a very busy roulette wheel.

@ChpBstrd gives a good run down of the statistics argument.  I'd further that while I believe it is possible for retail investors to beat the market consistently by leveraging their smaller size and flexibility, the intra-day trading game is not the right place for that.  The big quant funds are both more sophisticated and especially faster than a retail investor who can't even muster enough ballast to exempt themselves from the pattern day trading rule.  The "buy-in" at that particular poker table is around 100 million bones. 

For example, a few years ago, a quant fund invested a little over 115 million in laying its very own fiber optic sub sea cable from London to New York.  The goal was to shave microseconds off communication time.  These microseconds were enough to allow recovery of the entire investment in the first year trading global currencies as the front runner.  I can't even get Google Fiber here in Houston yet.  Impossible to compete with such a beast on its own terms...

secondcor521

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Re: Been day/swing trading my retirement account
« Reply #158 on: May 13, 2019, 09:08:17 PM »
For example, a few years ago, a quant fund invested a little over 115 million in laying its very own fiber optic sub sea cable from London to New York.  The goal was to shave microseconds off communication time.  These microseconds were enough to allow recovery of the entire investment in the first year trading global currencies as the front runner.  I can't even get Google Fiber here in Houston yet.  Impossible to compete with such a beast on its own terms...

"Flash Boys" is a pretty good book on the general subject (although it's initial story is about a fiber optic line between Chicago and New York).

JenniferW

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Re: Been day/swing trading my retirement account
« Reply #159 on: May 13, 2019, 09:33:09 PM »
Guys, she's not going to listen. Might as well save your breath. She's been losing money trying to invest for 20 years - if the lessons haven't sunk in by now...

-W

Wow you are making an invalid assumption about me.

I have never been frugal nor tried to invest my entire life.  I briefly tried to "invest" just 1-2 months before the tech bubble burst, and it wasn't day trading.  I didn't know what I was doing.  After I got burnt by that crash I haven't had much faith in the stock market or investing.

Thankfully I found MMM site about six months and have been really frugal since then, gotten completely out of debt (except for mortgage) and just started investing this year. (Just over a year ago I was $7500 in debt and paid that off and now have over $12,000 saved/invested.) I read Simple Path to Wealth just a couple months after I started my journey to financial independence. I just started putting money into VTI / VTSAX this year.

So NO I haven't tried to invest for the past 20 years, but only just over the last few months.

I ultimately want to do just VTI/VTSAX but I can't get myself to commit to it just yet with current market conditions.  I agree day trading time consuming, especially since I am new to it and having to read a lot of books and watch tutorial videos. I would rather just stick my money in VTI and not look at the market.  But I just can't get myself to do that yet with the current market conditions.  I know JL Collins says you can't predict the market, but come on, we are at the top of a 10 year bull run.  How could it possibly go higher?  P/E ratios are ridiculously high, companies are having to buyback outstanding shares (tax breaks help) to boost their EPS.  Do you think it's possible for the market to keep going another few years?  Is there any chance for that?  Shouldn't I wait for a correction?

 
« Last Edit: May 13, 2019, 09:52:52 PM by JenniferW »

JenniferW

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Re: Been day/swing trading my retirement account
« Reply #160 on: May 13, 2019, 09:40:54 PM »
For example, a few years ago, a quant fund invested a little over 115 million in laying its very own fiber optic sub sea cable from London to New York.  The goal was to shave microseconds off communication time.  These microseconds were enough to allow recovery of the entire investment in the first year trading global currencies as the front runner.  I can't even get Google Fiber here in Houston yet.  Impossible to compete with such a beast on its own terms...

"Flash Boys" is a pretty good book on the general subject (although it's initial story is about a fiber optic line between Chicago and New York).

Muhsen goes over this in his videos and mentioned that book.  A quite interesting topic: High Frequency Trading.  They use lasers now.  Some day I'll read the book after I've read all these other books.

waltworks

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Re: Been day/swing trading my retirement account
« Reply #161 on: May 13, 2019, 10:21:04 PM »
So here's the thing... You wrote:

"I guess I am partially scarred because I was investing quite a bit in 1998-99 and lost a bunch all at once in the big tech bubble crash.   I didn't even know about stop loss orders then either.  Lost big back then.  Lost a bit back in October (about $250 on $3000 investment).  I seemed to always get into the market at the wrong time! LOL.  So yeah I have a fear of losing big again, with how expensive the stocks are now compared to a decade ago.  Just trying to have some sort of control over it this time."

So you have in fact repeatedly put money in, freaked out, and then sold at a loss/sat out of the market. For 20 years! If you'd been just sticking money in (yes, including during the tech boom/bust) and not doing anything else, you'd be retired.

-W


frugledoc

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Re: Been day/swing trading my retirement account
« Reply #162 on: May 14, 2019, 01:23:45 AM »
Guys, she's not going to listen. Might as well save your breath. She's been losing money trying to invest for 20 years - if the lessons haven't sunk in by now...

-W

Wow you are making an invalid assumption about me.

I have never been frugal nor tried to invest my entire life.  I briefly tried to "invest" just 1-2 months before the tech bubble burst, and it wasn't day trading.  I didn't know what I was doing.  After I got burnt by that crash I haven't had much faith in the stock market or investing.

Thankfully I found MMM site about six months and have been really frugal since then, gotten completely out of debt (except for mortgage) and just started investing this year. (Just over a year ago I was $7500 in debt and paid that off and now have over $12,000 saved/invested.) I read Simple Path to Wealth just a couple months after I started my journey to financial independence. I just started putting money into VTI / VTSAX this year.

So NO I haven't tried to invest for the past 20 years, but only just over the last few months.

I ultimately want to do just VTI/VTSAX but I can't get myself to commit to it just yet with current market conditions.  I agree day trading time consuming, especially since I am new to it and having to read a lot of books and watch tutorial videos. I would rather just stick my money in VTI and not look at the market.  But I just can't get myself to do that yet with the current market conditions.  I know JL Collins says you can't predict the market, but come on, we are at the top of a 10 year bull run.  How could it possibly go higher?  P/E ratios are ridiculously high, companies are having to buyback outstanding shares (tax breaks help) to boost their EPS.  Do you think it's possible for the market to keep going another few years?  Is there any chance for that?  Shouldn't I wait for a correction?

The stock market is a wild ride.  It would not surprise me if it goes up massively over the next few years, or if crashed 30-50%

It would surprise me if every purchase I make now is not worth significantly more in 20 years.

My money is where my mouth is, I have equivalent of 1 million dollars (in U.K. pounds) in vanguard all world.

JenniferW

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Re: Been day/swing trading my retirement account
« Reply #163 on: May 14, 2019, 02:55:13 AM »
So here's the thing... You wrote:

"I guess I am partially scarred because I was investing quite a bit in 1998-99 and lost a bunch all at once in the big tech bubble crash.   I didn't even know about stop loss orders then either.  Lost big back then.  Lost a bit back in October (about $250 on $3000 investment).  I seemed to always get into the market at the wrong time! LOL.  So yeah I have a fear of losing big again, with how expensive the stocks are now compared to a decade ago.  Just trying to have some sort of control over it this time."

So you have in fact repeatedly put money in, freaked out, and then sold at a loss/sat out of the market. For 20 years! If you'd been just sticking money in (yes, including during the tech boom/bust) and not doing anything else, you'd be retired.

-W

I actually only put money into market around late 1999 to early 2000 about 1-2 months before it crashed if I recall, not 1998.  It was all at once and I was just starting to try to invest.  I didn't know what I was doing. Market crashed right after. I literally spent all of 2 or 3 months in the market.

And I didn't do a single trade in the market since then until October of last year, just before the this last correction.   This was before I read JL Collins book, "A Simple Path to Wealth".   Now I consider after reading that book, and after becoming frugal, I am an investor.  I am now armed with the knowledge of the power of index funds, and I intend to use them, just not right now at the top of the market.  Also, I've never tried day trading before, not until very recently.  So no I don't have a 20 year history of trying to day trade to try and beat the market and losing like you seem to be trying to portray.  (My experience in the market has been about 4-5 months total prior to reading JL Collins book.)

Also I've been "poor" (relatively low income) and not invested the past 20 years because of limited income, along with fear of the market.  Only after learning more about frugality and being content with what I have, have I learned that I am not that poor and can actually save quite a lot.  No more living paycheck to paycheck. So now that I am saving money and content, I don't want to lose it in the top of a market.  And I'm not losing, I'm up 13.5% over S&P 500 the past 2 1/2 months.

It's sad you are saying I have a 20 year history of messing up when I didn't even know about index funds until a few months ago, nor about frugality ideas.  I didn't know about frugality, index funds nor day trading until very recently! I guess you've had a rosy past 20 years of being perfectly frugal and knowing about index funds.. good for you.  I am happy to be a part of this forum and to learn from others here, it has transformed my life, very recently.  Btw, I have regretted not knowing about frugality and investing in index funds the past 20 years.. but I can't be too hard on myself due to my ignorance and I can't rewind time.  I imagine many other newer people here, as most Americans, have been just as ignorant as me about vanguard index funds in the past as well as frugality and saving.  I can only look to the future, but this time I have knowledge to guide me.  Yes index funds are good.. but for me not right at the moment.

If the positive performance I have been having recently day trading goes sour, then I'll just give up the idea, and resort to index funds.  But for now I am winning, by a good margin.  I do agree though, there is the time factor as well, and right now it's taking up a lot of my time and I don't especially like that.  I'm hoping as I learn more I won't have to spend more than say 1 hour per day reading news, and researching the day's picks, as well as executing the trade.  Yeah the time involved sucks.  The idea of throwing into index fund, ignoring market price is appealing, so I can focus on other things in my life than money.  I can't wait for a big correction so I can start doing that.
« Last Edit: May 14, 2019, 03:49:44 AM by JenniferW »

GoCubsGo

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Re: Been day/swing trading my retirement account
« Reply #164 on: May 14, 2019, 08:51:08 AM »
First off, this is a very interesting thread, and I applaud you on your transparency and explanation of WHY you are taking what most here think is a big risk. 

I too first started investing right during the tech bubble (bad luck timing, first job out of college).  It definitely sucked to see that hard earned money flounder for years.  I stuck with it and have rewarded handsomely with a seven figure portfolio and am near FIRE in my mid 40's.  I too like to buy individual stocks and have had some big wins but mostly that is with 10% of my portfolio, the rest is indexed and real estate.  I do my research on stocks when I'd otherwise be watching TV and generally buy and hold my picks.  Not a ton of time involved and I do like researching stock ideas.  Maybe you could go that route in the future with some portion of your portfolio.

Time is money, and I'm not sure if your job allows you to do this while working, but I'd bet you are spending a LOT of time following your trades at the detriment of something else.  There is an opportunity cost in that.  Could you make more money in your career if you invested this amount of time in getting better at it?  Just a thought as you said you don't have a strong income.

At your age I would seriously start using your newfound knowledge on frugality and investing to come up with a plan should your day trading experiment not work out. You've started down the frugality path which is huge but I think you should have a plan in place to get to a FIRE goal.  I don't think day trading will ultimately be the main catalyst for this.  Hard work, frugality,career advancement and a solid investment plan will get you there.  Best of luck and keep posting. 

Blueberries

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Re: Been day/swing trading my retirement account
« Reply #165 on: May 14, 2019, 09:01:29 AM »
If you're day trading out of fear or control, you really are better off averaging into VTI.  You will not get the top and you will not get the bottom, but you probably already understand that as a day trader.


I ultimately want to do just VTI/VTSAX but I can't get myself to commit to it just yet with current market conditions.  I agree day trading time consuming, especially since I am new to it and having to read a lot of books and watch tutorial videos. I would rather just stick my money in VTI and not look at the market.  But I just can't get myself to do that yet with the current market conditions.  I know JL Collins says you can't predict the market, but come on, we are at the top of a 10 year bull run.  How could it possibly go higher?  P/E ratios are ridiculously high, companies are having to buyback outstanding shares (tax breaks help) to boost their EPS.  Do you think it's possible for the market to keep going another few years?  Is there any chance for that?  Shouldn't I wait for a correction?

Yes and yes.  This thinking is unproductive.  The market doesn't care what you think it should do and it doesn't care what Buffett or Dalio or Lynch thinks either.  It's the great equalizer. 

Just to throw some info out there; every President in the last 30+ years (I can't recall the exact figures and I'm too lazy to look) that has followed a two-term President has experienced a recession while in office.  Does this mean Trump will experience a recession?  No.  The odds are higher, historically, but the market is probability based, which is why you can see repeated patterns and yet, they don't all work. It's also why you can have a 20+ year bull run or an unexpected Great Recession or any other anomaly.  Historical data gives us an idea of what we can expect in the future, but it isn't science.  There are different people and policies in the market now than were there just 5 years ago so naturally, while human nature hasn't changed, the players have and because of that, history could never truly repeat itself. 

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Re: Been day/swing trading my retirement account
« Reply #166 on: May 14, 2019, 10:29:24 AM »
I can't even get Google Fiber here in Houston yet.  Impossible to compete with such a beast on its own terms...

Can’t you get it from AT&T or XFinity?

DoNorth

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Re: Been day/swing trading my retirement account
« Reply #167 on: May 14, 2019, 10:54:06 AM »
you keep mentioning high PE ratios as the driver for the end of the bull market.  how about looking at return on investment capital, historically low interest rates/inflation and incredibly low unemployment.  Even this trade war with China will most likely only result in a small correction to a market that will continue to trend up.

https://www.forbes.com/sites/greatspeculations/2018/11/19/pe-ratios-are-misleading-especially-right-now/#3099519c2281

Financial.Velociraptor

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Re: Been day/swing trading my retirement account
« Reply #168 on: May 14, 2019, 11:46:41 AM »
I can't even get Google Fiber here in Houston yet.  Impossible to compete with such a beast on its own terms...

Can’t you get it from AT&T or XFinity?

Google fiber is way faster than my Xfinity branded cable internet.

The_Big_H

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Re: Been day/swing trading my retirement account
« Reply #169 on: May 14, 2019, 09:57:37 PM »
OK, you are going to pick stocks, trade them around alot, whatever.  You think you can beat the market, you have "that edge" that no one else knows about.

Yes, you, this isn't your profession, you don't have super-laser computers or special programs that you have written to trade for you, you have no inside knowledge, you have just news reports that literally everyone else has, you also don't have billions of dollars in order to exploit your 1-2% "edge". 

You are going to beat out thousands of people who have ALL Of these at their disposal?

OK, lets say you do have "that edge", great.  You found a way to "beat the market" reliably and consistently. IF you actually legitimately do, a rational person would then proceed mortage/debt/leverage ALL your assets, quit your job, and spend your time taking advantage of that edge with as much leverage as possible. In a few years you should amass a fortune, like 8-9 figures.

You'll quickly be noticed, people will throw money at you to get you to invest with "your edge".  Congratulations newly minted hedge fund manager.

Btw, if your edge is good enough, you'll probably be investigated.  Much like the casino can spot a cheat/card-counter by them actually winning over time.  Your constant many-statistical-deviations-above-average win rate will attract attention.  That's how Madoff was suspected by some, by the way, he just "won too much".

Or rather, instead, someone will work out your edge, in fact, many people will.  They'll exploit your edge better than you and your "edge" will be quickly blunted before you really got a chance to use it.

Side note, this is why anyone selling you a system is full of it.  If they had a good system they wouldn't be TELLING YOU ABOUT IT at any price!

Econ101 for me:
Professor: *going on basically about how stock markets work an how you make money, and lose money*
Some other Student: "So, how do you know where the market is going"
Professor: "If I knew that, I would be on a beach full of naked women,  not here teaching you how to do it"


Wintergreen78

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Re: Been day/swing trading my retirement account
« Reply #170 on: May 15, 2019, 12:09:22 PM »
I keep asking people to tell me about the ten-year returns of all these investment gurus and day traders who claim to have systems for beating the market. Surely some of them actually have successful published track records to back up their claims.

I’m still waiting to see a list of the ones that had long-term success.

bacchi

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Re: Been day/swing trading my retirement account
« Reply #171 on: May 15, 2019, 12:16:44 PM »
I keep asking people to tell me about the ten-year returns of all these investment gurus and day traders who claim to have systems for beating the market. Surely some of them actually have successful published track records to back up their claims.

I’m still waiting to see a list of the ones that had long-term success.

That's because the successful ones are drinking mai tais on a beach at their estate. They don't have time to respond to haters on the internet. Duh.

Asalted_Nut

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Re: Been day/swing trading my retirement account
« Reply #172 on: May 15, 2019, 12:30:40 PM »
Guys, she's not going to listen. Might as well save your breath. She's been losing money trying to invest for 20 years - if the lessons haven't sunk in by now...

-W

I would agree that whatever anyone says it won't change her mind at this point. But I think it may be due to inexperience rather than experience. To give a personal example:

Once upon a time (or so the legend goes), my parents hosted a rather large event with catering. To keep the food fresh, they purchased a large quantity of dry ice, which I had never seen before. They told me not to touch it, because I would get burned. I was still in single digits, and knew that fire burns, ice doesn't burn! So I poked it with one finger. And it didn't burn. So I broke off a piece and swallowed it.



Just kidding. But I did put my finger on it for a full second, at which point it did start to burn and I knew not to do that again! But if I had stopped with just poking it, I might have felt that since I didn't get burned, the dry ice would not actually burn and my parents were wrong. I imagine that's where JenniferW is now - poking the dry ice, and hasn't gotten burned, so may believe anyone who says that she will get burned must be wrong (or hasn't done it right because they got burned when she has not yet been burned).

Side note, if you ever get your hands (wearing thick gloves, hopefully) on some dry ice, put some in the toilet!


Wintergreen78

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Re: Been day/swing trading my retirement account
« Reply #173 on: May 15, 2019, 12:36:14 PM »
I keep asking people to tell me about the ten-year returns of all these investment gurus and day traders who claim to have systems for beating the market. Surely some of them actually have successful published track records to back up their claims.

I’m still waiting to see a list of the ones that had long-term success.

That's because the successful ones are drinking mai tais on a beach at their estate. They don't have time to respond to haters on the internet. Duh.

So, someone makes a claim. You ask them to provide evidence to back up their claim. They respond that no one will provide evidence, and asking for evidence proves that you are a “hater”.

Got it.


Psychstache

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Re: Been day/swing trading my retirement account
« Reply #174 on: May 15, 2019, 01:07:16 PM »
For example, a few years ago, a quant fund invested a little over 115 million in laying its very own fiber optic sub sea cable from London to New York.  The goal was to shave microseconds off communication time.  These microseconds were enough to allow recovery of the entire investment in the first year trading global currencies as the front runner.  I can't even get Google Fiber here in Houston yet.  Impossible to compete with such a beast on its own terms...

"Flash Boys" is a pretty good book on the general subject (although it's initial story is about a fiber optic line between Chicago and New York).

If you don't like reading/prefer audio/want to save time, Michael Lewis has a new podcast called "Against the Rules" and the latest episode ("The Magic Shoebox") is essentially and abridged version of Flash Boys.

P.S. the rest of the season is amazing and you should listen to the whole thing.

waltworks

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Re: Been day/swing trading my retirement account
« Reply #175 on: May 15, 2019, 01:10:49 PM »
I keep asking people to tell me about the ten-year returns of all these investment gurus and day traders who claim to have systems for beating the market. Surely some of them actually have successful published track records to back up their claims.

I’m still waiting to see a list of the ones that had long-term success.

That's because the successful ones are drinking mai tais on a beach at their estate. They don't have time to respond to haters on the internet. Duh.

So, someone makes a claim. You ask them to provide evidence to back up their claim. They respond that no one will provide evidence, and asking for evidence proves that you are a “hater”.

Got it.

I think Bacchi was being facetious.

-W

Wintergreen78

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Re: Been day/swing trading my retirement account
« Reply #176 on: May 15, 2019, 02:32:10 PM »
I keep asking people to tell me about the ten-year returns of all these investment gurus and day traders who claim to have systems for beating the market. Surely some of them actually have successful published track records to back up their claims.

I’m still waiting to see a list of the ones that had long-term success.

That's because the successful ones are drinking mai tais on a beach at their estate. They don't have time to respond to haters on the internet. Duh.

So, someone makes a claim. You ask them to provide evidence to back up their claim. They respond that no one will provide evidence, and asking for evidence proves that you are a “hater”.

Got it.

I think Bacchi was being facetious.

-W

Whoops - missed the facetiousness! Sorry Bacchi.

But I am serious: it isn’t impossible that at least a handful of people have been successful using wacky short term trading strategies. I’d love to see some examples if anyone actually has been successful for a sustained period. And not “hey, I made some money” but actual documentation of CAGR over time. Something that lets you compare it to indexes and actively managed funds.

ScarElbow

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Re: Been day/swing trading my retirement account
« Reply #177 on: May 15, 2019, 02:49:19 PM »
LOL Im so tempted to take up that challenge just for shits and giggles.
« Last Edit: May 15, 2019, 02:53:40 PM by ScarElbow »

Stimpy

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Re: Been day/swing trading my retirement account
« Reply #178 on: May 15, 2019, 03:25:28 PM »
But I am serious: it isn’t impossible that at least a handful of people have been successful using wacky short term trading strategies. I’d love to see some examples if anyone actually has been successful for a sustained period. And not “hey, I made some money” but actual documentation of CAGR over time. Something that lets you compare it to indexes and actively managed funds.

Define Sustained period.  I am aware of a few people whom have had several years of success, followed by a period(s) of losses.  That in and of it self I don't believe is super rare.  But as I said above in a previous post, they aren't rich.  Your never going to hear how they beat the market or made it to the big leagues.  Some make enough money to live on, others it's just extra for later on, but its not enough to call it day.

I should note those whom make a living, also tend to have a side gig of some sort.  So that should tell you something right there.......
« Last Edit: May 15, 2019, 03:27:40 PM by Stimpy »

bacchi

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Re: Been day/swing trading my retirement account
« Reply #179 on: May 15, 2019, 03:27:28 PM »
But I am serious: it isn’t impossible that at least a handful of people have been successful using wacky short term trading strategies. I’d love to see some examples if anyone actually has been successful for a sustained period. And not “hey, I made some money” but actual documentation of CAGR over time. Something that lets you compare it to indexes and actively managed funds.

The study posted by waltworks on page 3 shows that there were a small number of traders examined that made money from 1995-99. Trading costs were higher then but, of course, the market was also on a tear and the study didn't do a comparison between Nasdaq, which everyone and their barber was tracking, and the day trader returns (especially after taxes).

Quote from: http://faculty.haas.berkeley.edu/odean/papers/Day%20Traders/Day%20Trade%20040330.pdf
Do  day  traders  make  money?  This  was  a  central  question  in  the  investigations  described  above.

Anyone who owned stock in 1995-99 made money. If you were following the trends, your tech mutual funds probably made 90% in 1998 alone.

The time period begs the question -- what happened when the dot com crash happened? Did the successful day traders short all the way down, making millions, or did they start sending out resumes again?
« Last Edit: May 16, 2019, 10:57:40 AM by bacchi »

Exflyboy

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Re: Been day/swing trading my retirement account
« Reply #180 on: May 15, 2019, 03:54:01 PM »
I did this in my 401k.. I used to jump in and out of company stock.

I made 36% in my first year.. I was good!

After 18 months and up about 25% I had about $150K. Then I thought about how long I could do this and when I had $500k would I be taking all this risk?

I decided "No" and rolled into index funds where its been ever since.

Shortly after I rolled to index funds the company stock tanked, The company was badly managed and this Fortune 500 company is now a shadow of its former self.

I would have lost my shirt if I had kept this game up and it was a lot of work too.

Of course I was playing with large bets on a single stock which most traders wouldn't do.

ChpBstrd

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Re: Been day/swing trading my retirement account
« Reply #181 on: May 16, 2019, 09:22:16 AM »
Quote
But I am serious: it isn’t impossible that at least a handful of people have been successful using wacky short term trading strategies. I’d love to see some examples if anyone actually has been successful for a sustained period. And not “hey, I made some money” but actual documentation of CAGR over time. Something that lets you compare it to indexes and actively managed funds.
Indeed it is probable that somebody somewhere has beaten the market for several years in a row. After all, probably a couple hundred thousand people start day trading each year. Some of them will lose their life savings within a month, while others will beat the market by dumb luck.

Similarly, if I gathered tens of thousands of people in an NFL football stadium and had them all flip coins, it would not be improbable for someone in that crowd to get tails 15 times in a row, a specific sequence of events with a 0.5^15 = 0.003% chance of occurring on any one attempt. Another way of stating those odds is 1 in 0.00003/1 or 1 in 32,768. But because I have tens of thousands of people flipping coins, it is reasonable to expect that one of them will get 15 tails in 15 flips.

Would it be wise to copy the strategy of that one person, investing your life savings on their next flip? Of course not.

Wintergreen78

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Re: Been day/swing trading my retirement account
« Reply #182 on: May 16, 2019, 10:08:10 AM »
Oh, I’m not saying that I will start day trading if you can show me a handful of people that have had sustained success. This is really just curiosity. What fascinates me about the whole day trading phenomenon is that the people who are into it can’t even point to one or two examples. You would think that at least one person would have had a sustained run, written a book or two, and become that one guy that everyone knows and talks about when they bring this up.

Like that kid Steve in junior high who can do a sick kick flip on his skateboard. I saw him do it once in the parking lot after school.

ChpBstrd

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Re: Been day/swing trading my retirement account
« Reply #183 on: May 16, 2019, 10:43:01 AM »
Oh, I’m not saying that I will start day trading if you can show me a handful of people that have had sustained success. This is really just curiosity. What fascinates me about the whole day trading phenomenon is that the people who are into it can’t even point to one or two examples. You would think that at least one person would have had a sustained run, written a book or two, and become that one guy that everyone knows and talks about when they bring this up.

Like that kid Steve in junior high who can do a sick kick flip on his skateboard. I saw him do it once in the parking lot after school.

There are thousands of such books/blogs/“systems” you can buy. The authors don’t even have to prove the performance they claim to have consistently achieved with their “trading method”.

If such an author did publicize their historic account statements, and it was proven they bought Netflix and Amazon call options on margin in 2011 or whatever, it wouldn’t teach us anything we didn’t already know or tell us what will work next. Nor would it inform us about the millions of others who lost their money gambling on GE bull spreads, shorting the VIX, trading Bitcoin, or Theranos stock.