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Day Trading Article
Old 06-20-2012, 02:44 PM   #1
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Day Trading Article

I finally got around to reading this months Smart Money magazine. I found a very interesting article on a life of a fast speed day trader. It is actually an article about a book on this by Joel Stein. The article was by far the most interesting read in the magazine. The purpose of me linking the article isn't to promote day trading, but a very fascinating read on what is actually going on behind the scenes of a professional day trader. The author even got to use $100,000 from the account of the man he studied for a trading day. The author didn't really know what he was doing but managed to make $20 bucks after fees mostly because he hit the wrong buttons at the right time.

http://www.smartmoney.com/invest/sto...=SM_highlights
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Old 06-20-2012, 05:34 PM   #2
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I just read it today in SmartMoney too. Good article from a magazine that usually disappoints me with lots of articles on stock picking.
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Old 06-20-2012, 07:58 PM   #3
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The best part of it is where the guy whose teaching him puts 80% of his money--index funds! And he is LBYM, too.

Somehow, in the first 31 minutes, Matt loses $2,926. He is completely calm. He doesn't care much about money. He rents an apartment that he shares with his girlfriend, he doesn't own a car, and his diet consists mostly of protein shakes and chicken wraps. He could live the same exact way on the salary of the loser reading the stock news over the speakers. Though he's gambling his own money, it's only about 20 percent of what he's amassed; the rest is either in cash or in an indexed mutual fund. If he's bothered by the $2,926 he lost, it's not because it's $2,926, but because it shows that he played badly.

He mentions enjoying poker. We know of a number of super sharp analysts who work for money managers who also play professional poker. A breed apart, those folks.
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Old 06-20-2012, 08:22 PM   #4
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I would love to be able to spend a day in one of those rooms. I trade once or twice a week depending upon market movement and would like to see what a real setup looks like.
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Old 06-20-2012, 10:40 PM   #5
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When you make quick trades, fees start to eat away at your returns unless you're investing large amounts of money that make two $10 fees seem like chump change. Usually timing the market doesn't work. That's why UNmanaged index funds outperform professionally managed funds after fees. Just buy and hold index funds.
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Old 06-20-2012, 10:55 PM   #6
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" It makes up roughly 70 percent of the trading volume on the New York Stock Exchange "

So that would indicate about 1/4 of the market is actual investing vs speculation and arbitrage................. Worse than I thought.
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Old 06-21-2012, 04:08 AM   #7
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“It's because, after an hour, the pounding stops. All the real action is in the first hour of trading, and the last half hour. In between, guys go to the gym, get lunch, surf the Web, throw around a Nerf football, or just go home and skip the last half hour of trading. But that first hour is intense.”

So about 1 ½ hours of work a day. Then goes on to say:

“It sucks to come into work early every morning, do a really stressful job, and go home with a weekly paycheck of negative $2,325.15.....”

My heart goes out to him because he has a really stressful job. Dude is 26, sits in front of a computer for 1 ½ hours a day and complains that is stressful? Wow, how would he feel if he did something worth a sh*t .

Yeah, I saw this article in SM as well. I liked the 60-minute clip on HFT better. This guy is lame.
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Old 06-21-2012, 08:51 AM   #8
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Quote:
Originally Posted by Lakewood90712
" It makes up roughly 70 percent of the trading volume on the New York Stock Exchange "

So that would indicate about 1/4 of the market is actual investing vs speculation and arbitrage................. Worse than I thought.
Its amazing isn't it? A lot of the times they don't know anything about the company except its ticker symbol. I love sports betting, go to NV about 8-10 times a year and just bet all day long for a week at a time. At least I know enough about this stuff to do all right, though it is done for entertainment not to make a living. I think my slightly addictive betting behavior would bankrupt me if I day traded. Its odd that I am a gambler, and a saver, but not an investor. The bulk of my money is in interest bearing accounts. You think someone who likes to bet would want to invest in the market, but that is not the case with me.
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Old 06-21-2012, 10:23 AM   #9
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It's because, after an hour, the pounding stops. All the real action is in the first hour of trading, and the last half hour.
Rick Ferri has specifically recommended not doing ETF buy/sells during these time periods.

Quote:
He is completely calm. He doesn't care much about money. He rents an apartment that he shares with his girlfriend, he doesn't own a car, and his diet consists mostly of protein shakes and chicken wraps. He could live the same exact way on the salary of the loser reading the stock news over the speakers.
Could this be the modern day Cosmo Cramer (of Seinfeld fame)?
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Old 06-21-2012, 12:25 PM   #10
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Originally Posted by ReadySkiDaddy View Post
When you make quick trades, fees start to eat away at your returns
So do spreads. So do taxes.
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Old 06-21-2012, 02:25 PM   #11
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Originally Posted by Onward View Post
I just read it today in SmartMoney too. Good article from a magazine that usually disappoints me with lots of articles on stock picking.
Well, you will not be disappointed by them for long... September's issue will be the last. Although, they will still maintain the website.

Dow Jones closing SmartMoney magazine - MarketWatch
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Old 06-21-2012, 02:35 PM   #12
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Is your disappointment caused by mere presence of the stock picking articles, or is it because you followed them and they did not work?

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Originally Posted by Onward View Post
I just read it today in SmartMoney too. Good article from a magazine that usually disappoints me with lots of articles on stock picking.
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Old 06-21-2012, 04:52 PM   #13
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Originally Posted by ChiliPepr

Well, you will not be disappointed by them for long... September's issue will be the last. Although, they will still maintain the website.

Dow Jones closing SmartMoney magazine - MarketWatch
Didn't know that. Well I guess I will save $10 a year now, because I wont buy the online edition. This may be the sign of more to come. I just read last week that the New Orleans daily newspaper is going to 3 days a week hard copy editions. I will be very disappointed when that happens to my daily driveway newspaper and it follows suite. I don't know if anyone under 40 even knows what a newspaper is though.
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