Author Topic: Been day/swing trading my retirement account  (Read 7498 times)

waltworks

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Re: Been day/swing trading my retirement account
« Reply #50 on: April 06, 2019, 05:41:54 PM »
It's a game for people who are bad at statistics. Then again, there are a lot of games like that in life.

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ScarElbow

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Re: Been day/swing trading my retirement account
« Reply #51 on: April 06, 2019, 07:11:18 PM »
Absolutely right. Statistics are crucial to being successful in trading. I highly recommend learning about stats before diving head first into trading. Not kidding about that either

JenniferW

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Re: Been day/swing trading my retirement account
« Reply #52 on: April 06, 2019, 08:07:50 PM »
Absolutely right. Statistics are crucial to being successful in trading. I highly recommend learning about stats before diving head first into trading. Not kidding about that either

Do you mean like a college level course which requires knowledge of calculus?  That hard core?  If so, I'd have to brush up on my calculus.. been 25 years since I took calc i, ii & iii, linear algebra and diffy q! lol.  Never took stat though.

waltworks

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Re: Been day/swing trading my retirement account
« Reply #53 on: April 06, 2019, 08:50:37 PM »
Do you mean like a college level course which requires knowledge of calculus?  That hard core?  If so, I'd have to brush up on my calculus.. been 25 years since I took calc i, ii & iii, linear algebra and diffy q! lol.  Never took stat though.

LOL. If there was a prereq it would be formal logic. You don't need any calculus. But in a way you have captured the reason that traders pretty much all fail - they believe that there is some complex pattern (that can be understood with enough research/charts/mumbo jumbo) involved, when in reality it's a random walk (with an upward trend). 

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ScarElbow

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Re: Been day/swing trading my retirement account
« Reply #54 on: April 07, 2019, 08:31:46 AM »
Nope not that hardcore. I failed calculus many times over so screw that. I'm talking about simple, common knowledge of standard deviation where price moves in the normal distribution bell curve over a given time period. Combine that with the MACD weekly version of the daily chart (48, 104, 36) setting, you can easily identify overbought/oversold area and momentum shift. I've been using this extensively in my trading career and find very high probability of success. Good luck!
« Last Edit: April 07, 2019, 01:03:08 PM by ScarElbow »

Financial.Velociraptor

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Re: Been day/swing trading my retirement account
« Reply #55 on: April 07, 2019, 06:43:41 PM »
I've been using this extensively in my trading career and find very high probability of success. Good luck!

@ScarElbow how do you define "high probability?"  I'm skeptical of any day trader who claims more than about 60% win rate (you can technically become "stupid rich" at 51% win rate).  I'd love to hear more if you have documented a better performance.

Personally, I trade options.  The "greeks" are calculated by the exchange and tell me all the statistics I need to know.  I made an "A" in college stat (twice, once in Grad School [where they made me "prove", ad nauseum, with THE ONE HIGH AND HOLY MATHEMATICS that the markets are perfectly efficient and I shouldn't dare attempt anything other than indexing]).  But I have never broken out the MS Excel statistical module to calculate a 95% CI for a trade.  Seems like overkill in my case. 

Best of luck to all the traders AND all the indexers in this thread!

MustacheAndaHalf

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Re: Been day/swing trading my retirement account
« Reply #56 on: April 07, 2019, 10:28:19 PM »
Stock market price changes differ from a normal distribution.  Without modeling kurtosis ("fat tails") you might hit extreme positive and negative price movements that are outside your modeling of the market.

Telecaster

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Re: Been day/swing trading my retirement account
« Reply #57 on: April 07, 2019, 11:32:31 PM »
Stock market price changes differ from a normal distribution.  Without modeling kurtosis ("fat tails") you might hit extreme positive and negative price movements that are outside your modeling of the market.

I was just about to post the same thing.  Stock return distribution are definitely not normal, if you assume they are, you are doing it wrong.   Thing is, when the stock market is going up everything you try works great, especially things like momentum strategies.  But when it isn't going up, it wallops you in the ass. 

I'm old enough to have been around in the dot com bubble.  People were following all kinds of different strategies and sometimes even getting legitimately rich.   But when the cork popped it all went to zero in a hurry.

J Boogie

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Re: Been day/swing trading my retirement account
« Reply #58 on: April 08, 2019, 01:32:35 PM »
I personally seek to avoid pure arbitrage. I prefer for my economic activity to be value add rather than skimming.

That's the problem with day trading, even if you do it profitably, you're not adding any real value to the economy.

Buy and hold investing gels with my value add strategy. Even buying single stocks opportunistically gels with my strategy, provided it's a medium to long term. You're providing value when you buy something undervalued (existing longs would second that, as would the people selling the thing you found on Craigslist for a great deal).

That's my beef with swing trading. You are providing value to no one outside of yourself... and the value you are providing to yourself is questionable. If it's purely for your entertainment, well ok, but beware that your desire for gambling doesn't snowball as it often tends to for those who engage in it.

BicycleB

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Re: Been day/swing trading my retirement account
« Reply #59 on: April 08, 2019, 01:59:10 PM »
Stop day/swing trading your retirement account!


Doing this day/swing trading is stressful and takes up time; I wish the P/E ratios were at 2009-2012 levels then I'd just do the index fund. I just have a great fear of losing a bunch like what happened starting back in October.

Given the "overvaluation" of the market right now, by day/swing trading with stop loss orders placed when needed, I feel more comfortable knowing I can't lose 20-50% in a short time period in a blindly invested index fund.  That said, I am using Vanguard for my Solo 401k and put in like $500-600 per month into VTSAX -- about 25-30% of what I invest each month.

Whenever the market does tank big, I'll then just buy into a discounted VTI in my IRA and Robinhood accounts.  Then I won't have to think about the market each day.  I'll just buy into VTI each month without even looking at market.

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.

You are taking numerous actions to attempt having control over "it", but the actions you're taking aren't likely to give you real control. They're likely to just add fees and variance to existing trends of the market. In effect, you're exerting false control over individual waves but your investments will still rise and fall with the tide.

If you're trading a solo 401k, you have a business that earns money. Your time would be much better spent earning more money from the business than wasting it on trading attempts.

I don't dispute that a minority like Financial.Velociraptor might get some value out of their efforts. My personal opinion based on your learning rate to date is that you will not be one of them. Sorry if that sounds blunt, but you've said you want to be talked out of this. So just stop!! If you have the ability to earn money in your business, shift your investments to indexing now and start working more on the business.

Managing your emotions and time is going to be a lot more fruitful than managing a bunch of day trades.

PS. Today's prices are irrelevant if you're seeking FIRE. Your decision to invest should be based on the fact that you are in the accumulation phase, and are successfully earning more than you spend. Congratulations! In the future, when you are in FIRE, the relevant price is the average price at the time when you need to sell. You only need to sell a few percent at most in a given year of FIRE, so the price during an individual year doesn't really matter then either.
« Last Edit: April 08, 2019, 02:18:34 PM by BicycleB »

Maenad

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Re: Been day/swing trading my retirement account
« Reply #60 on: April 08, 2019, 03:51:22 PM »
That's the problem with day trading, even if you do it profitably, you're not adding any real value to the economy.

I for one never looked at it from that perspective. Thanks, J Boogie, I thought in a new way today!

ScarElbow

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Re: Been day/swing trading my retirement account
« Reply #61 on: April 08, 2019, 04:21:20 PM »
@Financial.Velociraptor You don't need to calculate SD by hands (I certainly don't) as that would be a nightmare trying to plug in all the data for all time frames. I use thinkorswim platform and they already calculate them for you in real time. What I found throughout the years of trading is the longer the time frame the more likely it is price moves back to the mean especially in volatile environment (swings of 2sd & 3sd). I wait for this kind of move before I analyze the position with other confirmations indicators for mean reversion. The high probability trades are where all 3 time frames of the 4H chart on the 15, 20, & 30day. If all 3 charts swing too far to one side (2sd and 3sd), in my experience over 90% of the time it tends to swing back (sometimes violently). Hope that helps.

Now for the more patient trades (longer floating positions) I use the 6month and 1year daily chart for analysis, but the rules of normal distribution still apply. Good luck!

Xlar

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Re: Been day/swing trading my retirement account
« Reply #62 on: April 09, 2019, 09:32:43 AM »
Stop day/swing trading your retirement account!


Doing this day/swing trading is stressful and takes up time; I wish the P/E ratios were at 2009-2012 levels then I'd just do the index fund. I just have a great fear of losing a bunch like what happened starting back in October.

Given the "overvaluation" of the market right now, by day/swing trading with stop loss orders placed when needed, I feel more comfortable knowing I can't lose 20-50% in a short time period in a blindly invested index fund.  That said, I am using Vanguard for my Solo 401k and put in like $500-600 per month into VTSAX -- about 25-30% of what I invest each month.

Whenever the market does tank big, I'll then just buy into a discounted VTI in my IRA and Robinhood accounts.  Then I won't have to think about the market each day.  I'll just buy into VTI each month without even looking at market.

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.

You are taking numerous actions to attempt having control over "it", but the actions you're taking aren't likely to give you real control. They're likely to just add fees and variance to existing trends of the market. In effect, you're exerting false control over individual waves but your investments will still rise and fall with the tide.

If you're trading a solo 401k, you have a business that earns money. Your time would be much better spent earning more money from the business than wasting it on trading attempts.

I don't dispute that a minority like Financial.Velociraptor might get some value out of their efforts. My personal opinion based on your learning rate to date is that you will not be one of them. Sorry if that sounds blunt, but you've said you want to be talked out of this. So just stop!! If you have the ability to earn money in your business, shift your investments to indexing now and start working more on the business.

Managing your emotions and time is going to be a lot more fruitful than managing a bunch of day trades.

PS. Today's prices are irrelevant if you're seeking FIRE. Your decision to invest should be based on the fact that you are in the accumulation phase, and are successfully earning more than you spend. Congratulations! In the future, when you are in FIRE, the relevant price is the average price at the time when you need to sell. You only need to sell a few percent at most in a given year of FIRE, so the price during an individual year doesn't really matter then either.

I thought the example of "Bob, the worldís worst market timer" was helpful to understand that even when the market does badly and you lose money that sticking with the market will still work out fine: https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/

Much Fishing to Do

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Re: Been day/swing trading my retirement account
« Reply #63 on: April 10, 2019, 07:55:38 AM »
I say go for it.  At 8%/month you'll turn the $5k into like $5 BIllion in 20 years, which sounds pretty good.  Even if it doesnt go perfectly you'll at least have like $1B.

Blueberries

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Re: Been day/swing trading my retirement account
« Reply #64 on: April 10, 2019, 08:47:22 AM »
I wouldn't do it with a retirement account, but who cares what I'd do?

One thing I would suggest is that you watch your emotions.  It's very easy to get overly excited.  That excitement will lead to trading mistakes in one way or another.  I don't know what kind of money you're making, but if you make a decent chunk, you would do well to take a portion of those profits out of the market.  It sounds stupid; you're making a lot, you're doing well, why would you want to do that?  Trading is all about psychology and it's important that you keep your mind fit at all times.

You wanted a book recommendation - read Jesse Livermore's book "How To Trade in Stocks".  Probably not in the realm of what you're looking for, but you will find that many pros recommend this book (even those with different trading styles) and with good reason.   

Beard N Bones

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Re: Been day/swing trading my retirement account
« Reply #65 on: April 10, 2019, 09:14:43 AM »
Learners evolve into winners. Losers disappear into the 90%. Bottom line, be a student of the game

@ScarElbow   Based on that little piece of rhetoric, I can't help but think you are part of a company that does nothing but sells its "opportunity."

ScarElbow

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Re: Been day/swing trading my retirement account
« Reply #66 on: April 10, 2019, 09:48:09 AM »
LMAO yes I own a company where we package worms neatly into little cans and we target fools all over the world.
« Last Edit: April 10, 2019, 12:12:59 PM by ScarElbow »

Maenad

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Re: Been day/swing trading my retirement account
« Reply #67 on: April 10, 2019, 09:49:55 AM »
In the first dot com gold rush, there were commercials about day trading. It was easy and everyone was minting money. "Quit your job and become a day trader," the commercials touted.

We know how that ended.
How did it end ?

Sent from my SM-G950W using Tapatalk

With the day-traders broke and looking for jobs after the dot-com bubble popped.

ericbonabike

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Re: Been day/swing trading my retirement account
« Reply #68 on: April 10, 2019, 10:09:27 AM »
In like 10 years of doing this,
you should look back and see what your cumulative gain is.  And compare that to S&P.

I tried something like this for a couple (more like 5 years).  And S&P averaged about 12%.  I did about 8% and thought "Holy shit, I'm making money!".

The real kick in the nuts is when I look at the cumulative return over that period and I see if I had just put my money in ITOT, I would have had 367% return, and I'm more like 120% return.   

So, instead of sitting on $1 million right now, I should be sitting on ~3ish. 

Super depressing.

JenniferW

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Re: Been day/swing trading my retirement account
« Reply #69 on: May 03, 2019, 12:59:41 PM »
I'm in it bad now lol.  Just transferred my Roth IRA from Vanguard to TD Ameritrade a few days ago.  I have made $6800 in Roth IRA contributions so far (for 2018 and some of 2019).  The Roth IRA balance is now $7791 in just under two months for a 16.37% gain.  Compared to, in the same timeframe, 4.5% VTSAX gain in my Solo Roth 401k.

Past three days I've made about 4.6% in my Roth IRA in TD Ameritrade, in three trades.  Two of them were wins w/ TSLA and one was a small loss (0.75%) with WTI.   Swing trading VTWO right now at least until Monday, maybe longer as I expect some more market growth next few days due to lowest unemployment rate in what 49 years?



Above chart is in Central Time (CST).

I've been watching a few Udemy course videos on Stock Trading by Mohsen Hasan, starting last week.  $11.99 per course is what I paid so pretty cheap -- he has three different courses and I bought them all.  He's a great teacher and I've learned so much which has helped me the past few days to capture these gains. Mohsen covers the following in his video series: The Basics of the Market, Orders & Prices, Technical Analysis, Recommended Resources, Risk Management and Money Management, Trading Psychology, The Micro-Structure, ECNs & Dark Pools, Valuation & Technical Analysis, Fundamentals, Macro-Events, Trading Plan & Strategies, Day Trading & Swing Strategies (OPG, Equity Dilution, Dividend Cuts)

Going to be getting a few books as well.  Just bought How to Make Money in Stocks by William J. O'Neil.

Liking the Thinkorswim platform.

So much to learn! Gah!   I am making sure to place all my BUY orders with TRG brackets with Sell Limit and Stop Loss included.  I don't like to lose more than say 1-1.5% in a trade so I set the STOP LOSS up pretty high.  I usually just like to day trade and get out of the market, but the market is good enough at the moment (it seems) so I have 95% of my account in VTWO (at least until Monday).
« Last Edit: May 03, 2019, 01:14:47 PM by JenniferW »

waltworks

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Re: Been day/swing trading my retirement account
« Reply #70 on: May 03, 2019, 01:11:38 PM »
Keep us updated, it will be interesting to see where you're at in a few years.

-W

BicycleB

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Re: Been day/swing trading my retirement account
« Reply #71 on: May 03, 2019, 02:04:20 PM »
I'm in it bad now lol. 

....

So much to learn! Gah! 

Well put.  :)

I do admire your coming back to report. Will admire even more if you report after losses (should they occur).

JenniferW

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Re: Been day/swing trading my retirement account
« Reply #72 on: May 03, 2019, 03:37:46 PM »
Iíll share my full journal each time I post ó Iíll provide a link to it each time. :) So you can see it all if ya want.  What my running batting average is along with my Win/Loss ratio etc..  I did share a loss (last trade I lost 0.75%).  Iíll post every month or so, at least until I blow up my account and just revert to VTI :)
« Last Edit: May 03, 2019, 03:41:30 PM by JenniferW »

Telecaster

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Re: Been day/swing trading my retirement account
« Reply #73 on: May 03, 2019, 03:54:19 PM »
Thing is, when the market is going up, everything seems to work.   But when it is going down everything goes to shit in a hurry.   

waltworks

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Re: Been day/swing trading my retirement account
« Reply #74 on: May 03, 2019, 04:26:21 PM »
Post your trades before you do them. Great way to keep yourself accountable.

-W

ScarElbow

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Re: Been day/swing trading my retirement account
« Reply #75 on: May 03, 2019, 04:45:29 PM »
Lol I love your light hearted attitude and easy approach. I'm rooting for your success from the other side of the internet. Go get it!
« Last Edit: May 03, 2019, 05:00:17 PM by ScarElbow »

Bernard

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Re: Been day/swing trading my retirement account
« Reply #76 on: May 03, 2019, 06:51:51 PM »
I've been in the stock market for about 2 decades. I made many mistakes and I got lucky a few times. For example, my gains in the rise of Amazon have wiped off my losses in other stocks, such as Chipotle, DDD Printing, and The Container Store.

I made money, but not enough, so imagine my surprise when I learned that investing in the stock market is as easy as buying low-fee index funds or ETFs. If you throw $10K in the market, buy 10 different stocks, you will have some winners, and some losers. In almost all cases, the total gain will be less than the one you'd have if you had owned all of the stocks traded at Wall Street, or all Stocks in the S&P 500.

Warren Buffet himself has recognized that in his 2017 Annual Report (I own a bunch-o-BRK.B). Although it's as good as stock as it gets, aside from the fact that Berkshire doesn't pay ANY dividends, Berkshire was not able to keep up with the S&P 500. Hence, as soon as BRK.B hits $224 again, I'll kiss it good bye and put the money in a Vanguard ETF.

Unless you are one in ten-thousand, you will NOT be able to beat the system, year after year after year. It's really that simple. Wish I had known that 20 years ago.

Wintergreen78

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Re: Been day/swing trading my retirement account
« Reply #77 on: May 04, 2019, 11:07:28 AM »
Iíll share my full journal each time I post ó Iíll provide a link to it each time. :) So you can see it all if ya want.  What my running batting average is along with my Win/Loss ratio etc..  I did share a loss (last trade I lost 0.75%).  Iíll post every month or so, at least until I blow up my account and just revert to VTI :)

Jennifer,

Iím really curious. You talked earlier about having funds invested in 1999. But all of your posts now are about pretty small dollar amounts. What were you doing for the last twenty years?

If you had been making regular IRA contributions during that time and getting any returns at all, it seems like you would be talking about hundreds of thousands invested, not less than ten thousand.

MaaS

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Re: Been day/swing trading my retirement account
« Reply #78 on: May 04, 2019, 02:22:43 PM »
Well, good luck. Doing well initially with small amounts of money is probably the worst thing that could happen to you, bummer.

-W

Agreed. One of my very first individual stock purchases went very poorly - and in hindsight, it was a great stroke of luck.


Blueberries

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Re: Been day/swing trading my retirement account
« Reply #80 on: May 05, 2019, 09:53:42 AM »
I'm in it bad now lol.  Just transferred my Roth IRA from Vanguard to TD Ameritrade a few days ago.  I have made $6800 in Roth IRA contributions so far (for 2018 and some of 2019).  The Roth IRA balance is now $7791 in just under two months for a 16.37% gain.  Compared to, in the same timeframe, 4.5% VTSAX gain in my Solo Roth 401k.

Past three days I've made about 4.6% in my Roth IRA in TD Ameritrade, in three trades.  Two of them were wins w/ TSLA and one was a small loss (0.75%) with WTI.   Swing trading VTWO right now at least until Monday, maybe longer as I expect some more market growth next few days due to lowest unemployment rate in what 49 years?

I've been watching a few Udemy course videos on Stock Trading by Mohsen Hasan, starting last week.  $11.99 per course is what I paid so pretty cheap -- he has three different courses and I bought them all.  He's a great teacher and I've learned so much which has helped me the past few days to capture these gains. Mohsen covers the following in his video series: The Basics of the Market, Orders & Prices, Technical Analysis, Recommended Resources, Risk Management and Money Management, Trading Psychology, The Micro-Structure, ECNs & Dark Pools, Valuation & Technical Analysis, Fundamentals, Macro-Events, Trading Plan & Strategies, Day Trading & Swing Strategies (OPG, Equity Dilution, Dividend Cuts)

Going to be getting a few books as well.  Just bought How to Make Money in Stocks by William J. O'Neil.

Liking the Thinkorswim platform.

So much to learn! Gah!   I am making sure to place all my BUY orders with TRG brackets with Sell Limit and Stop Loss included.  I don't like to lose more than say 1-1.5% in a trade so I set the STOP LOSS up pretty high.  I usually just like to day trade and get out of the market, but the market is good enough at the moment (it seems) so I have 95% of my account in VTWO (at least until Monday).

If you have found an edge (O'Neil's book outlines his edge, which builds on Darvas, which builds on Livermore) and you take your gains as a multiple of your loss (3-to-1 or 5-to-1), you will succeed.  I wish you the best!

Telecaster

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Re: Been day/swing trading my retirement account
« Reply #81 on: May 05, 2019, 02:07:04 PM »
Nope not that hardcore. I failed calculus many times over so screw that. I'm talking about simple, common knowledge of standard deviation where price moves in the normal distribution bell curve over a given time period. Combine that with the MACD weekly version of the daily chart (48, 104, 36) setting, you can easily identify overbought/oversold area and momentum shift. I've been using this extensively in my trading career and find very high probability of success. Good luck!

Stock prices do not follow a normal distribution.  If you assume they do, you will be in for a painful lesson.     All these strategies are really just momentum strategies when you get down to it.  Momentum strategies can work great, as long as the market goes up.   When JenniferW says she's making more money swing trading then by index, I believe her.  However, momentum works both ways, and a 50% loss negates a 100% gain.   

I've seen this movie before.  After the bull market has been running for a few years, people start popping up claiming all sort of success using various strategies, and shoot, some of their claims might even be accurate.  But after the bear hits--and it will hit eventually--they all vanish.   100% of them.   

There are two basic components to the the FIRE model that we've seen work successfully over and over again:  1) Live below your means, and 2) invest.   There are different ways to invest that have worked successfully.   Some people invested in real estate.  Some people (but not many) bought and held individual stocks.  Most people who get to FIRE buy index funds.   That's the path that works for the majority of people. 

I've never heard of a single person who said they got to FI by swing/day trading.  Not one person.  Ever.    Maybe you guys are the smart ones who will make it work.   But keep an open mind to the possibility that maybe you are making the same mistakes that lots of other people made. 

Financial.Velociraptor

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Re: Been day/swing trading my retirement account
« Reply #82 on: May 05, 2019, 02:20:39 PM »
In grad school, they made us "prove" with the ONE HIGH AND HOLY MATHEMATICS - AMEN that the markets are "perfectly" efficient.  And I mean ad nauseum.  After grad school I began to doubt that doctrine.  Among other things I set out to empirically test the efficiency of markets.  Back in 2009, I did some research and picked a single day trading strategy to devote 5% of my portfolio to.  I was making annual contributions greater than 5% of my nut at that time so felt comfortable with losing it all if necessary.  I settled on "fading the gaps" as the area I would try to develop personal expertise in.

I was very careful to always enter a trailing stop and tighten it as the day wore on.  I had some early successes.  I made at least one major mistake in not respecting the IRS 'wash rule' and gave back some gains to the tax man.  After a year, I found I had exerted quite a lot of effort and endured some mental stress for a little over 1,500 in gains.

I settled on short term trading targeting a couple months for options.  I usually sell options for income.  This actually reduces your risk while, (sometimes) increasing your return over the index, (at the expense of giving away upside.)  When I buy options, I hedge the bet to define my loss.  I've done well.

The time commitment is lower than day-trading.  I enjoy doing it.  And I am by definition using strategies that LOWER risk.  Retired at age 40 on 5OCT2012 using primarily said strategy.  I'd be glad to share some strategies via PM if you want to explore something that is known to work and is far less risky.

So there is precedent for FIRE outside of indexing.  But as someone with experience, I'm extremely skeptical day/swing trading are long term worth the effort.

That said, if I was going to try day trading again (say just for shits and grins) I'd pursue a CMT certification.  That way, if I blew up my account I'd at least be employable with an in-demand professional certification.  You can get a pretty deep education in markets, trading, and charting for a few thousand that way, which is likely to be cheaper than learning day trading lessons "the hard way".

ScarElbow

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Re: Been day/swing trading my retirement account
« Reply #83 on: May 05, 2019, 03:21:33 PM »
LOL I've learned that engaging in these so called investing/trading debates would eventually boil down to childish behavior with shits slinging back and forth with no resolution whatsoever. So I humble myself, crossing the arms and just smile. Just accept that some people don't do the same thing as everyone else and like the challenge of carving their own path. Just happens that that path doest fit inside your framework of investing ideology. And that's okay. I'm okay. You're okay. Relax, breathe in some oxygen, exercise, build your garden, dance, trance, have some good sex. The world still spins in harmony. It's beautiful man.

frugledoc

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Re: Been day/swing trading my retirement account
« Reply #84 on: May 05, 2019, 03:32:19 PM »
LOL I've learned that engaging in these so called investing/trading debates would eventually boil down to childish behavior with shits slinging back and forth with no resolution whatsoever. So I humble myself, crossing the arms and just smile. Just accept that some people don't do the same thing as everyone else and like the challenge of carving their own path. Just happens that that path doest fit inside your framework of investing ideology. And that's okay. I'm okay. You're okay. Relax, breathe in some oxygen, exercise, build your garden, dance, trance, have some good sex. The world still spins in harmony. It's beautiful man.

Itís irresponsible/immoral  to encourage others to trade though.

Fine if it has worked for you, but for the vast majority it wonít.

habaneroNorway

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Re: Been day/swing trading my retirement account
« Reply #85 on: May 06, 2019, 03:46:40 AM »
There will always be someone, some fund or something that oupterforms the market year after year. The problem, however, is that given how many who try, someone is bound to be very successful due to simple probability. Say you each year have 50% probability of beating the market and 1000 persons try doing it.  Just by probability slightly more then 3% of those will beat the market every year for 5 consecutive years. If we change to say 8 or more out of 10 years, more than 5% will do so. For 10 out of 10 years only 1 person will mange.

Its very hard to decide if its skill or luck. Or if its just taking more risk in a bull market, ref the comment on volatility as leverage earlier.

MaaS

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Re: Been day/swing trading my retirement account
« Reply #86 on: May 06, 2019, 08:20:35 AM »
One more musing:

Many of the worlds best and brightest devote much of their lives to building algorithms to do this. These algorithms basically make money by being faster and smarter than the rest of us.

If you're not going to index, at least make long-term bets on individual businesses you've done the homework on. There's at least a hope of success.

Dare2Dream

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Re: Been day/swing trading my retirement account
« Reply #87 on: May 06, 2019, 08:38:18 AM »
I did this a lot -$100,000 ago.  Life is great if you are betting with the market on popular stocks/options making a few hundred dollars a pop.  Eventually the market will take a big drop or stay in a pro-longed downturn and the profit goes away.  If you are stubborn like me you keep betting on the market and ignoring your mental stop losses because you don't like to be wrong.

As most people here have said, unless you are in the < 1% of the population that can stick to a plan no matter what and keep emotions in check you are going to lose out in the end.

Best to stick with the somewhat boring but consistent long term ETF strategy and get your "adrenaline rush" from doing something else like saving money, saving energy and helping others.


ChpBstrd

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Re: Been day/swing trading my retirement account
« Reply #88 on: May 06, 2019, 10:03:06 AM »
Nope not that hardcore. I failed calculus many times over so screw that. I'm talking about simple, common knowledge of standard deviation where price moves in the normal distribution bell curve over a given time period. Combine that with the MACD weekly version of the daily chart (48, 104, 36) setting, you can easily identify overbought/oversold area and momentum shift. I've been using this extensively in my trading career and find very high probability of success. Good luck!

Stock prices do not follow a normal distribution.  If you assume they do, you will be in for a painful lesson.     All these strategies are really just momentum strategies when you get down to it.  Momentum strategies can work great, as long as the market goes up.   When JenniferW says she's making more money swing trading then by index, I believe her.  However, momentum works both ways, and a 50% loss negates a 100% gain.   

I've seen this movie before.  After the bull market has been running for a few years, people start popping up claiming all sort of success using various strategies, and shoot, some of their claims might even be accurate.  But after the bear hits--and it will hit eventually--they all vanish.   100% of them.   

There are two basic components to the the FIRE model that we've seen work successfully over and over again:  1) Live below your means, and 2) invest.   There are different ways to invest that have worked successfully.   Some people invested in real estate.  Some people (but not many) bought and held individual stocks.  Most people who get to FIRE buy index funds.   That's the path that works for the majority of people. 

I've never heard of a single person who said they got to FI by swing/day trading.  Not one person.  Ever.    Maybe you guys are the smart ones who will make it work.   But keep an open mind to the possibility that maybe you are making the same mistakes that lots of other people made.

Playing a double-or-nothing gambling game with reinvestment involves a near certainty of going broke. After just four coin flips, your chance of not being broke is just 6.25%. Whereas coins only offer 50/50 odds, markets offer a variety of odds and games. A Roulette wheel bet on black or red is similar to the purchase of an at-the-money option. A bet on green is like a far-OTM option. Because the odds of either are slightly unfavorable (with prices set by your opponent, the house or the market maker), with enough ďtradesĒ almost any winning streak is destined to end.

Also, as we move from long-term perspectives to short-term perspectives, we move from a very high probability of positive returns over 10 years to about a 50% probability of positive returns over an average span of a few hours.

These factors explain the scarcity of rich day traders. To understand them is to avoid the game.

Asalted_Nut

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Re: Been day/swing trading my retirement account
« Reply #89 on: May 06, 2019, 01:37:39 PM »
JenniferW, do you mind sharing a little on why you decided to start day-trading in the first place? I see a lot of people post on market timing due to fear, uncertainty, or misplaced certainty, but day trading seems like it might be due to other factors.

Your initial post says you couldn't resist; what was it that actually pushed you into day trading? For example an article on one of the companies? Or someone convinced you it was a good idea? Or seeing someone else have success?

I admit I felt a pang of "FOMO" when everyone was going all-in on crypto, but never made it to the brink of actually pulling the trigger and investing in it, so I am just curious what someone's initial experience with actually going forward with non-index based trading might be.

Especially because some of your earlier posts mention you were (are?) investing in index funds, so where the switch came about.

Thank you!

JenniferW

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Re: Been day/swing trading my retirement account
« Reply #90 on: May 08, 2019, 11:42:24 AM »
I did this a lot -$100,000 ago.  Life is great if you are betting with the market on popular stocks/options making a few hundred dollars a pop.  Eventually the market will take a big drop or stay in a pro-longed downturn and the profit goes away.  If you are stubborn like me you keep betting on the market and ignoring your mental stop losses because you don't like to be wrong.

As most people here have said, unless you are in the < 1% of the population that can stick to a plan no matter what and keep emotions in check you are going to lose out in the end.


When the market starts going down rapidly or oscillating with a lot of volatility I'll probably be trading leveraged 3x index etf pairs (bull/bear) like:
UPRO/SPXU (S&P 500), TQQQ/SQQQ (Nasdaq), URTY/SRTY (Russell 2000), UGAZ/DGAZ (natural gas), JNUG/JDST (gold).  These allow me to short with great leverage in bear markets, in my retirement account.  E.g. on a given day, a 2% downturn in S&P 500 would be 6% in SPXU.

Every trade I make has a plan, and I won't risk any more than 1 to 1.5% for a potential reward of 3%+.   I just need to keep a batting average of 50% or better and win/loss ratio of 1.5 or better.  I stay non-emotional.  I have to stick to the plan.   Reading Mark Minivini's How to Trade Like a Stock Market Wizard.  Started with the last chapters on Risk Management -- like this book.  Love Muhsen's Udemy training videos as well, great teacher ($11.99 per course.. cheap).

I am limited to three day trades per week due to Pattern Day Trading rule.  I plan to never swing trade from now on.  Learned my lesson the past few days due to Trump announcing gigantic tariff increase on China on Sunday.  Lost like 1% in VTWO.  So I'll be in cash all but about 30 mins three days per week.  So maybe 1 1/2 hours per week on average in the market, at opportune times.
« Last Edit: May 08, 2019, 11:53:17 AM by JenniferW »

JenniferW

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Re: Been day/swing trading my retirement account
« Reply #91 on: May 08, 2019, 12:06:50 PM »
JenniferW, do you mind sharing a little on why you decided to start day-trading in the first place? I see a lot of people post on market timing due to fear, uncertainty, or misplaced certainty, but day trading seems like it might be due to other factors.

Your initial post says you couldn't resist; what was it that actually pushed you into day trading? For example an article on one of the companies? Or someone convinced you it was a good idea? Or seeing someone else have success?

I admit I felt a pang of "FOMO" when everyone was going all-in on crypto, but never made it to the brink of actually pulling the trigger and investing in it, so I am just curious what someone's initial experience with actually going forward with non-index based trading might be.

Especially because some of your earlier posts mention you were (are?) investing in index funds, so where the switch came about.

Thank you!

We are at perhaps the peak of a 10 year bull market. I am fearful of putting in thousands and losing half of it in a week.  Like what happened back in October but worse.  The next time we are in the trough of a bear market, I'll probably just throw everything in VTI.   But for now I really do fear losing it and need to have some control.

Friday in the news I read that a new bull run was about to start, that the S&P 500 reached previous highs.  The jobs report said we had lowest unemployment rate in 49 years.  So I decided to risk a swing trade until Monday in VTWO but what happened over the weekend?  Trump tanked the market via two tweets, announcing gigantic tariff increase. (from 10% to 25%).  Look at VIX, worst volatility since end of last year. I lost money on VTWO.. I had no control.  I suffered because of a couple tweets.  I hate not having that control.   Day trades from now on for me: 3 per week (PDT rule).  That way I can STOP out when things go against plan, at my exact threshold price.

I started day trading not because of anyone else, but I strongly feel I can profit with it.  Compounding small average net gains, 3 times per week, week over week.  I am persistent, try to pick the best times to get in and out (still learning every time), and I always stick to my plan -- leaving emotions in the trunk.

VIX -- see how bad it's getting again? :(

« Last Edit: May 08, 2019, 12:23:56 PM by JenniferW »

Dare2Dream

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Re: Been day/swing trading my retirement account
« Reply #92 on: May 08, 2019, 12:15:35 PM »
I did this a lot -$100,000 ago.  Life is great if you are betting with the market on popular stocks/options making a few hundred dollars a pop.  Eventually the market will take a big drop or stay in a pro-longed downturn and the profit goes away.  If you are stubborn like me you keep betting on the market and ignoring your mental stop losses because you don't like to be wrong.

As most people here have said, unless you are in the < 1% of the population that can stick to a plan no matter what and keep emotions in check you are going to lose out in the end.


When the market starts going down rapidly or oscillating with a lot of volatility I'll probably be trading leveraged 3x index etf pairs (bull/bear) like:
UPRO/SPXU (S&P 500), TQQQ/SQQQ (Nasdaq), URTY/SRTY (Russell 2000), UGAZ/DGAZ (natural gas), JNUG/JDST (gold).  These allow me to short with great leverage in bear markets, in my retirement account.  E.g. on a given day, a 2% downturn in S&P 500 would be 6% in SPXU.

Every trade I make has a plan, and I won't risk any more than 1 to 1.5% for a potential reward of 3%+.   I just need to keep a batting average of 50% or better and win/loss ratio of 1.5 or better.  I stay non-emotional.  I have to stick to the plan.   Reading Mark Minivini's How to Trade Like a Stock Market Wizard.  Started with the last chapters on Risk Management -- like this book.  Love Muhsen's Udemy training videos as well, great teacher ($11.99 per course.. cheap).

I am limited to three day trades per week due to Pattern Day Trading rule.  I plan to never swing trade from now on.  Learned my lesson the past few days due to Trump announcing gigantic tariff increase on China on Sunday.  Lost like 1% in VTWO.  So I'll be in cash all but about 30 mins three days per week.  So maybe 1 1/2 hours per week on average in the market, at opportune times.

I love your optimism and truly wish you the best.  There is a high likelihood that you are the exception and will succeed in the long term provided you stick to your plan.

BTW - I am very familiar with leveraged ETF funds and use them in a risk parity allocation in my retirement fund. 
 

JenniferW

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Re: Been day/swing trading my retirement account
« Reply #93 on: May 08, 2019, 12:42:03 PM »
I love your optimism and truly wish you the best.  There is a high likelihood that you are the exception and will succeed in the long term provided you stick to your plan.

BTW - I am very familiar with leveraged ETF funds and use them in a risk parity allocation in my retirement fund.

Thanks.  Sounds like you do swing / passive investing?

I do entirely active day trading. I intend on being in the market like 30 mins, with day trades only from now on.  I use ThinkOrSwim with Active Trader -- which also allows me to see the Level II book. When I setup my buy order, I setup a trigger bracket as well, to include an initial STOP of say -1.5%  and a LIMIT of +5%.  Once that order is placed, I can graphically slide the LIM and STP orders up and down in the chart (lines overlaid over the chart).  Sometimes I do this with AUTO-SEND on so I don't have to waste time clicking confirmation dialogue box.  It allows me to quickly adjust the LIM and STP orders based on what I see with respect to price, candle shapes, candle patterns along with associated volume, RSI oscillator, MACD etc.  I also use indicators such as VWAP (for stocks with a lot of institutional ownership), and Bollinger Bands for the rest.  I also use 200/50/20 simple moving averages.  If I feel the stock might keep going up a lot more, I might slide the STP down a bit to give it more room.  I really like it when the stock goes up enough for me to set the STP to my buy in price so I don't lose any money if it stops out.  Ricky Guitterez on youtube has a lot of day trading videos he does with ThinkOrSwim if you want to get an idea of what I do each time in ToS. I don't know much about Ricky, haven't watched many of his videos -- I prefer Muhsen's Udemy courses and books like O'Neil's and Miniveri's -- but Ricky is great for showing off ToS.)

Btw, chart patterns do work (accompanied by good fundamental conditions & catalysts) because most everyone believes they do, so they generally buy/sell at certain "opportune" points along a trending pattern.  I love FinViz, and use it as a screener.
« Last Edit: May 08, 2019, 12:53:27 PM by JenniferW »

Dare2Dream

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Re: Been day/swing trading my retirement account
« Reply #94 on: May 08, 2019, 12:54:40 PM »
I love your optimism and truly wish you the best.  There is a high likelihood that you are the exception and will succeed in the long term provided you stick to your plan.

BTW - I am very familiar with leveraged ETF funds and use them in a risk parity allocation in my retirement fund.

Thanks.  Sounds like you do swing / passive investing?

I do entirely active day trading. I intend on being in the market like 30 mins, with day trades only from now on.  I use ThinkOrSwim with Active Trader -- which also allows me to see the Level II book. When I setup my buy order, I setup a trigger bracket as well, to include an initial STOP of say -1.5%  and a LIMIT of +5%.  Once that order is placed, I can graphically slide the LIM and STP orders up and down in the chart (lines overlaid over the chart).  Sometimes I do this with AUTO-SEND on so I don't have to waste time clicking confirmation dialogue box.  It allows me to quickly adjust the LIM and STP orders based on what I see with respect to price, candle shapes, candle patterns along with associated volume, RSI oscillator, MACD etc.  I also use indicators such as VWAP (for stocks with a lot of institutional ownership), and Bollinger Bands for the rest.  I also use 200/50/20 simple moving averages.  If I feel the stock might keep going up a lot more, I might slide the STP down a bit to give it more room.  I really like it when the stock goes up enough for me to set the STP to my buy in price so I don't lose any money if it stops out.  Ricky Guitterez on youtube has a lot of day trading videos he does with ThinkOrSwim if you want to get an idea of what I do each time in ToS. I don't know much about Ricky, haven't watched many of his videos -- I prefer Muhsen's Udemy courses and books like O'Neil's and Miniveri's -- but Ricky is great for showing off ToS.)

Great chatting with you.  I suffer from an adrenaline addiction (self inflicted) that prevents me from begin successful at day/swing trading.  But I have tried many times to tame it.  My last venture was using TOS and a great set of strategies through steady options (no affiliation or affiliate links).  It was fun but in the end I couldn't follow the rules and over traded it to death.

I am having much more success with a 60/40 momentum strategy (triggers only once a month) and a "buy and hold" levered risk parity position. The levered position is UPRO/TMF/UGLD/TAIL in a 40/40/10/10 percentage allocation.  Some might say it's more risky that a traditional 60/40 or 70/30.  I will disagree until I am blue in the face.  Anyway, that's me.



waltworks

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Re: Been day/swing trading my retirement account
« Reply #95 on: May 08, 2019, 12:55:06 PM »
It's like watching a slow motion car crash. Odds on OP still being here on the forum in a year? I'd give it 5%.

-W

JenniferW

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Re: Been day/swing trading my retirement account
« Reply #96 on: May 08, 2019, 01:08:19 PM »
It's like watching a slow motion car crash. Odds on OP still being here on the forum in a year? I'd give it 5%.

-W

Why wouldn't I be here on the forum still? I participate in other discussions related to financial independence, bargains, frugality, cc churning etc.  I am a very frugal person now thanks to MMM blog & forum.  ><. Also, I believe in passive investing in VTI/VTSAX/BND etc.  But just not now... not at the peak with increasing volatility as of past three days..
« Last Edit: May 08, 2019, 01:10:35 PM by JenniferW »

waltworks

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Re: Been day/swing trading my retirement account
« Reply #97 on: May 08, 2019, 01:09:36 PM »
We'll see! Good luck!

-W

Beard N Bones

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Re: Been day/swing trading my retirement account
« Reply #98 on: May 08, 2019, 01:48:28 PM »
I believe in passive investing in VTI/VTSAX/BND etc.  But just not now...

I find this statement very interesting.  I honestly don't understand it because by definition, passive investing is... passive.  It sounds like your passive investing is have active tendencies, making it not so passive.
(It reminds me of someone who said they are celibate  ... just not right now because they are having to much fun having sex.)

ScarElbow

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Re: Been day/swing trading my retirement account
« Reply #99 on: May 08, 2019, 01:51:23 PM »
Jennifer, one thing I like to say about Trump's tweets. I contend that it has nothing to do with why the market tanked. It has to do with it being overbought in these past few weeks so it was due for correction. That's just the nature of it. Looking at my chart setup it's very clear.