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So I know this fellow that retired from farming at 55 years of age. Well . . . he didn't actually retire, he just sold the land he acquired via a no-interest, no-repayment "loan" from his uncle and then got a chunky inheritance from his parents' subsequent deaths, and quit his job. He worked jobs in construction (laborer) and driving trucks. I think he ended up with something just shy of $1 million, all told. He has no college education, struggled through high school, and isn't particularly bright. He's not technologically proficient in any way, and he still lives in a remote portion of Kansas with his wife on a 5,000 sq. ft. property. He told me the other day that he uses e-Trade or something to day trade, and he makes a lot of money doing that. He claims to make about $500 every day by playing with a $200k investment pot. He says he buys a stock like Apple, waits until it goes up a bit, and then sells. He says it's easy. He also goes to those Indian casinos quite a lot. Is he telling the truth? Is it really that easy to make money consistently through day trading? If it is, maybe everybody should do it. I always thought there was supposed to be some risk involved in trading, but he makes it sound like it is foolproof.
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Aug 17, 2015 15:46
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| # ? Apr 26, 2024 18:20 |
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I was one of those involved in Shpongle's "ask me about making tons of money day trading" threads from way back and he turned out to be full of poo poo, but from that experience i got a string of jobs in IT at forex brokerages (and they were all full of poo poo and stolen client money but at least i got paid) and then one at a stock trading shop (where most people crashed and burned including me, for personality and market condition reasons). From all this, ive learned that while yes it is possible to be successful day trading, when they say 90% of traders (on their own account) fail, they really mean it. It's not knowledge that sets the few apart, it's temperament and you either have it or you don't. It can be learned but it is a very expensive education. And it also depends on the type of day trading. Scalping the commodity futures markets is really retarded, same with trying to scalp AAPL. Would come down solely to good money management imo. Basically i would say there's no reason to disbelieve him on its face, but its not at all easy and that's not even because the few are gifted, but because they have the patience and financial perspective to make it through the hurdles. And he probably had a very steep learning curve. And taxes are a bitch. But reading about the guy again, he doesn't sound like the type who would succeed. And he wouldn't use Etrade. If he had an account as big as that he could get all kinds of preferential low fee accounts with non-retail broker dealers (i worked for one, we had all kinds of people like him paying 20 cents a trade and access to multiple venues etc...not 7 dollars and only to Arca). He sounds like a piker. Day trading is possible though, but only for the few the worst thing is fucked around with this message at 16:05 on Aug 17, 2015 |
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Aug 17, 2015 16:02
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Hedge funds hate her! Local mom figures out a way to get rich day-trading using this one weird trick.
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Aug 17, 2015 16:05
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Based on his claim of being able to make over 100% annualized investment returns (over 200% if you figure in compounding gains), within 10 years one of two things will happen: 1) He will be the richest man on the planet. 2) He will be a walmart greeter after gambling away his modest nest egg. Guess which one is more likely!
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Aug 17, 2015 16:20
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I honestly feel like he's one of those guys that sometimes make $500 - but probably not every day. He probably just remembers those days better. Or he makes $500 on one stock but loses $100 on 5 others. I work in finance with investment - and believe me - it is not quite that easy. Before I worked here I was in the military and there was a Marine who said he won every time he went to the casino in Vegas that was two hours away. And he did - after playing 20 other hands that he lost most of. I know lots of people who invest - it's a popular job after you graduate from my college. The one's who've made the most also lost the most. And that's fine - as long as they have the money to do it and overall win more than they lose. Gabriel Pope is right - he's talking about beating Warren Buffet every day. If he's telling the truth he would be doubling investments every year (I'm probably going to do the math on this later for fun haha). No mutual fund reliably does that. I dunno, if he does that, all the power to him. But he should also be able to write and sell a book about it.
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Aug 17, 2015 16:35
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He just said he made 500 every day. He wasnt talking in terms of percentage of overall account. Maybe he does 500 a day forever, who knows? But after a certain point, day trading does not scale at all. The market can only bear so much at a time. Once youre moving markets everyone tries to get in front of you or sell into you and it would make life very very difficult. Hedge funds have all kinds of ways to hide huge orders for this reason. So you cant extrapolate to "richest man in the world", thats stupid (and so is day trading most, if not all, of the time. Only people who win in day trading 100% of the time are brokers, ECNS, and market makers collecting fees).
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Aug 17, 2015 16:42
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Tautologicus posted:He just said he made 500 every day. He wasnt talking in terms of percentage of overall account. Maybe he does 500 a day forever, who knows? But after a certain point, day trading does not scale at all. The market can only bear so much at a time. Once youre moving markets everyone tries to get in front of you or sell into you and it would make life very very difficult. Hedge funds have all kinds of ways to hide huge orders for this reason. So you cant extrapolate to "richest man in the world", thats stupid (and so is day trading most, if not all, of the time. Only people who win in day trading 100% of the time are brokers, ECNS, and market makers collecting fees). I agree with you though - this guy shouldn't use etrade, that's the weirdest part of it.
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Aug 17, 2015 16:53
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Fritzler posted:That's true - there are huge economies of scale there. I'd say the fee collectors are the only ones winning 100% of the time though. I was thinking when I wrote that how Warren Buffet said he could reliably make 50% off of 1 million, but it was much harder to get that kind of money with higher amounts. Even at 500 a day for the 240-something days the NYSE is open - we're talking about a 60% return on the 200k, and that's pretty crazy. Yea since he said Etrade ill bet he does trade but he loses overall, or made one blindfolded hail mary trade and got lucky but has been losing ever since. Good luck to him though, maybe he will get it together before he starts doing reverse mortgages to cover margin calls etc.
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Aug 17, 2015 17:00
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Thanks for responses; mostly, you confirmed my suspicions. I've always believed that a person should at least be able to read financial statements and understand the meaning of P/E ratios and such. He makes it sound like profit is inevitable. I'll hold off on my own day trading plans for a few more years, I guess, until I see which path he goes down. Also, his preoccupation with casinos makes me doubt his choices at times.
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Aug 17, 2015 17:22
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You're better off taking your money to the horse track
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Aug 17, 2015 18:01
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freemason9 posted:If it is, maybe everybody should do it. Everyone should be granted a onetime $25,000 loan to get meet the SECs daytrading requirements.
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Aug 17, 2015 23:38
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QE forever
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Aug 18, 2015 01:21
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Do you know how to make a small fortune day trading? Start with a large fortune.
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Aug 18, 2015 09:11
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It's as truthful as a dude winning 500$ a day playing blackjack. He is essentially gambling and he will probably lose soon so
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Aug 18, 2015 13:26
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Mr. Henry Blodget, financial journalist at Business Insider posted:Getting paid to day-trade other people's money is one of the best businesses in the world. I found this quote whilst hunting for this NYT article from 2010, which describes the problems of day trading better than any other I've read. Note that Andrew Lindloff, the day trader described as 'odds-defying', who survived in this game for over a decade (part of the time, apparently, with his small daughter bouncing on a bed behind him as he attempted mental combat with a swarm of algorithms) stated that his income (I think net, not gross, but he didn't explicitly state which) was between $100 000 and $120 000 p/a. Nice money, but not outrageous for someone working in finance, and if he was making about $500 a day he'd only have been trading on two days out of three each year, when it seems likely that such a guy would rarely take a day off. And taxes and trading charges soon rack up. There is no possible way that the person described in the OP's first post can be telling the truth, and he sounds like a possible addicted gambler. Either that, or he's trying to persuade the OP to give him cash to fuel his foolproof perpetual-motion money engine. Maybe a bit of both.
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Aug 18, 2015 21:01
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Carnival of Shrews posted:I found this quote whilst hunting for this NYT article from 2010, which describes the problems of day trading better than any other I've read. Note that Andrew Lindloff, the day trader described as 'odds-defying', who survived in this game for over a decade (part of the time, apparently, with his small daughter bouncing on a bed behind him as he attempted mental combat with a swarm of algorithms) stated that his income (I think net, not gross, but he didn't explicitly state which) was between $100 000 and $120 000 p/a. Nice money, but not outrageous for someone working in finance, and if he was making about $500 a day he'd only have been trading on two days out of three each year, when it seems likely that such a guy would rarely take a day off. And taxes and trading charges soon rack up. I've been to the offices of hedge funds who reliably beat the market and make millions. They have dozens of math and computer science phds tweaking their algorithms and huge expensive data centers for research and execution. They contribute nothing to society but reliably make a few cents off of each transaction, which adds up when you do it a thousand times a second. So yeah, go ahead, get a laptop and an Etrade account and jump into the pool. Someone needs to be on the other end of those trades.
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Aug 19, 2015 00:02
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Carnival of Shrews posted:I found this quote whilst hunting for this NYT article from 2010, which describes the problems of day trading better than any other I've read. Note that Andrew Lindloff, the day trader described as 'odds-defying', who survived in this game for over a decade (part of the time, apparently, with his small daughter bouncing on a bed behind him as he attempted mental combat with a swarm of algorithms) stated that his income (I think net, not gross, but he didn't explicitly state which) was between $100 000 and $120 000 p/a. Nice money, but not outrageous for someone working in finance, and if he was making about $500 a day he'd only have been trading on two days out of three each year, when it seems likely that such a guy would rarely take a day off. And taxes and trading charges soon rack up. Ha! You might be right, but I'm not biting. I prefer old-fashioned, legitimate means of earning income. I consider the stock market as another variant of gambling these days. Institutional investment, electronic trading, and general market manipulation is too intimidating for me. Also, I don't like casinos. Those places are depressing.
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Aug 19, 2015 18:52
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If you just invest in the whole market it's not really gambling. You're taking a tiny slice of ownership of tons of companies and sharing in their fortunes.
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Aug 19, 2015 23:04
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Cicero posted:If you just invest in the whole market it's not really gambling. You're taking a tiny slice of ownership of tons of companies and sharing in their fortunes. I've done reasonably well in the share market, and it's based on this. If you invest in good solid companies with sound fundamentals that pay a good dividend (which I generally setup in a dividend reinvestment plan), you can do reasonably well over the long term (like 7-10% annualised compound growth over mulitple years). That's a far cry from a workable income as a day trader though unless you have like $1,000,000 in the market.
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Aug 20, 2015 01:50
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There's typically a distinction drawn between investing (buying and holding for dividends/capital appreciation) and trading (speculating that a stock price will go up/down so you can flip it for a quick buck.) It's pretty safe to call the latter gambling, even if some people are pretty good at it.
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Aug 21, 2015 03:59
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P-Mack posted:I've been to the offices of hedge funds who reliably beat the market and make millions. I'm very curious to know which hedge funds "reliably beat the market", and the relevant time frame and comparison index.
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Aug 21, 2015 05:40
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pig slut lisa posted:I'm very curious to know which hedge funds "reliably beat the market", and the relevant time frame and comparison index. As if those hedge funds are just another place you can stick your monthly 401k deposit into.
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Aug 21, 2015 07:46
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pig slut lisa posted:I'm very curious to know which hedge funds "reliably beat the market", and the relevant time frame and comparison index. Renaissance Technologies, Hudson River Trading, and Jane Street Capital are the ones I've personally come across. What they do is completely unrelated to investing as it is commonly understood.
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Aug 21, 2015 15:51
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I'm skeptical that these firms outperform the market (query: what is the index used for comparison?) longterm, given the ample body of empirical research showing that longterm outperformance is nearly nonexistent. Of course I'd love to see data showing that I'm wrong 
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Aug 21, 2015 19:08
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i work for a hedge fund and no op your hick friend does not return 60% a year or w/e. some of the most sophisticated funds in the world dont beat the market. over a long enough period of time it becomes basically impossible anyway.
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Aug 21, 2015 21:41
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DJIA @ -539.94 today but I'm confident that farmer pulled in his daily requisite $500.
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Aug 21, 2015 21:54
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pig slut lisa posted:I'm skeptical that these firms outperform the market (query: what is the index used for comparison?) longterm, given the ample body of empirical research showing that longterm outperformance is nearly nonexistent. http://www.bloomberg.com/news/articles/2015-06-16/how-an-exclusive-hedge-fund-turbocharged-retirement-plan wall st journal posted:fund that averaged a 71.8 percent annual return, before fees, from 1994 through mid-2014. This is very much the exception that proves the rule, of course. For every one of these funds there are 100 who finish a few points below the Dow year after year. If you're suggesting that the average investor should just buy and hold in index funds I'm very much in agreement.
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Aug 22, 2015 01:11
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P-Mack posted:http://www.bloomberg.com/news/articles/2015-06-16/how-an-exclusive-hedge-fund-turbocharged-retirement-plan Wow. Reminds me of the Legg Mason Value Trust. e: more like Legg Mason on steroids actually, with that kind of return.
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Aug 22, 2015 02:10
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https://en.wikipedia.org/wiki/Efficient-market_hypothesis Don't day trade. It's just gambling by another name.
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Aug 22, 2015 04:08
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Mortabis posted:https://en.wikipedia.org/wiki/Efficient-market_hypothesis Markets are not efficient at all...new information is constantly being introduced and everyone has a different idea of how to interpret it. It constantly attempts efficiency but thats not the same thing. Thats just another pillar in the artificial "401K faith in the market" ever since retirement pensions stopped being offered.
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Aug 22, 2015 07:28
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Tautologicus posted:Markets are not efficient at all...new information is constantly being introduced and everyone has a different idea of how to interpret it. It constantly attempts efficiency but thats not the same thing. Thats just another pillar in the artificial "401K faith in the market" ever since retirement pensions stopped being offered.  Nothing you've written contradicts the efficient market hypothesis. It is efficient in this sense: the best estimate for the future price of a stock is its current price. You will not come up with a better one. You will definitely not do so consistently. Maybe someone who gets paid $300,000 a year at Goldman Sachs will (they want you to believe this, but it's probably not true). But you, a day trader, will not. e: and if you want a defined benefit plan, just get an annuity. Some companies offer them as 401(k) investment options. They're much better than pension plans. Pension plans have all sorts of useless and expensive regulations but at the end of the day they're not actually required to keep enough money on hand to be all that likely to pay out, which is why they go under all the time. Annuities have one legal requirement: keep enough money on hand to pay the obligations. They almost never go bankrupt. (I work in an actuarial firm on pension consulting) e2: the reason real life 401(k)s suck is that people invest them in the companies they work for. But that doesn't invalidate EMH Mortabis fucked around with this message at 17:14 on Aug 22, 2015 |
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Aug 22, 2015 17:00
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I want to reply but i dont want to get into anything with someone who leads with a rolleyes smiley, sorry. You can have this one You ignored some essential nuance in my post though but i dont feel like spelling it out for you. Ill let you do the condescension Anyway trading is all about educated guesses, discipline and money management. Some people are better at this than others. The markets are irrational and uncertain enough for there to be opportunity. Mortabis posted:
Interesting, thanks the worst thing is fucked around with this message at 17:19 on Aug 22, 2015 |
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Aug 22, 2015 17:14
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Also everyones conflating day trading with swing trading ITT. One is intra-day, the other can potentially be weeks or months long trades. The criticisms of each aren't necessarily the same.
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Aug 22, 2015 17:27
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What i said was the market constantly attempts efficiency but it never achieves it, both because of the amount and the uncertainty of information about a security and the differences in interpreting it among market players. That directly disagrees with EMH. Rolleyes are real cheap but its ok i will forgive this time
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Aug 22, 2015 17:31
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I know several very smart people who used to be day traders. They all have the same story, they made lots of money for a while and then they didn't. The market can stay irrational longer than you can stay solvent.
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Aug 22, 2015 17:37
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Murgos posted:I know several very smart people who used to be day traders. They all have the same story, they made lots of money for a while and then they didn't. Ya And the big funds make money by 1. Pushing their weight around, 2. Brokering deals 3. Maths and fast rigs next to the NYSE and 4. Selling off their hot potatoes to the public. 5. ??. Not by "educated guesses", thats for the rest of us trying to make it out in the world with our napsack on a stick and a dream. Just to clarify what i said about trading..institutional trading is real different the worst thing is fucked around with this message at 17:54 on Aug 22, 2015 |
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Aug 22, 2015 17:38
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Tautologicus posted:I want to reply but i dont want to get into anything with someone who leads with a rolleyes smiley, sorry. You can have this one Good job not replying
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Aug 22, 2015 18:43
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pig slut lisa posted:Good job not replying Thx
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Aug 22, 2015 23:56
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Day trading has nothing on the zero sum game that is commodity futures. Also, swing trading is a thing too.
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Aug 23, 2015 11:08
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| # ? Apr 26, 2024 18:20 |
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Yeah dude I'm sure you have all the answers and would have delivered a masterpiece rebuttal if only that one dude hadn't been so crass as to lead with an internet emoticon. gently caress off.
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Aug 23, 2015 15:02
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