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Gerrit Jacobsen wrote:
> > LEVERAGE!!
>
> Daytrading and leverage of the SP contract do no necessarily have
> something to do with each other. One can trade happily long term
> positions in the SP as an overlay to a stock portfolio without
> leveraging the portfolio.
>
> The main issue regarding daytrading is transaction costs and reaction
> time. If you cannot compete in these two areas then you will not
> succeed in daytrading since the floor tends to absorb most of the
> small inefficiencies IMVHO.
>
> Gerrit Jacobsen
>
> > <<I don't know why
> > people choose to subject themselves to this kind of pressure. Intra-day
> > movement is a function of so many factors and participants. Position
> > trading gets you in the trend direction which is more stable.>>
> >
> > LEVERAGE!! S&P at 1219 equals $304,750 (1219 x $250)
> > margin required: approx $20,000 or about 6.75%
> >
> > With a very small account you can make a very decent living. Your way
> > requires many, many times more capital.
> >
> > Tom Lisk
> >
> >
> >
Let me add my two cents worth!!
In my opinion there is a great difference between daytrading and position
trading. it's all about the law of averages and those who Daytrader, will
eventually lose or break even. Because remember we are all humans and
discount the human emotional factor as much as you want, it usually turns
around against us. I have been on both sides of the fence, daytrading as well
as position trading. let me define position trading in my context, position
trading means holding a position no longer than 1 week and can be short as 1
day. Also, I only engage in the futures markets and stay away from the
indexes, including the E-Mini.
During my years as a daytrader, my results fluctuated all over the place!!
some weeks I was making a killing and other weeks I was complete dead. This
meant, that this style of trading had no consistency, and when there is no
consistency in your trading, your basically heading down the road to
destruction in the longterm. By analyzing all my trades during daytrading and
then comparing them with my position trading years, there is a clear trend
visible. The best thing to do, and all traders must live by this is that you
never BUCK THE TREND!!!, always ride the trend.
In hindsight, only my position trades generated sufficient capital to
sustain my account as well as provide any clear form of consistency in my
trading strategy. On average my trades where more profitable as compared to
daytrading where on average my profit ranged from $100 to $500.00 per day. In
contrast the losses were equal if not greater.
My only advice is if you understand the market and have the experience and
emotional disclipine, then Daytrading is the right move. Otherwise you might
as well as flush your money down the toilet, and this would less stressful.
Regards,
Adam
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