Anyone Tried Day Trading After Retirement?

[NW-Bound]

I don't do day trading, nor even try to.

But I am interested to hear about other people's attempt.

 

[Sunset]

I don't think you've read the OP's posts. He says he's still tweaking the algorithms and testing. It only makes sense to place smaller trades while you are in testing mode.

I'm skeptical, but give the guy a chance! I'm curious to see future reports, don't scare him off.

-ERD50

+1
Although if OP had gone in Full blast, OP would now have ~$9 Million, and not have to scrape by on his $4.5 Million

 

[Lsbcal]

Week 4 update….

The comments about me day trading (like this one above) with an initial balance of $500 are comical….

I have over $4.5 NW and I already explained that I’m doing this as a hobby/experiment. Only reason I update this thread was because someone asked me too.

My initial $500 is now $934.21. It’ll be a few weeks before my next update as I’m headed out on a vacation

Just peaked at this thread and have read only some of the responses.

If I had that NW *and* age, I'd ask myself how to maximize the happiness in my life. That could be better relationships with people I know and love or making new friends or volunteering in some capacity. Or it could mean learning new skills that broadened my horizons.

Would increasing my NW bring more happiness? Regarding the NW, I'd want to maximize my understanding of how to manage that portfolio. It could mean some trading or not. I personally trade the stock portfolio but in a broad backtested way. For instance, I trade US versus international on a monthly basis rather then holding a fixed percentage of international.

 

[Lsbcal]

Another thought. What percentage increase in total portfolio gains would equal a big gain in day trading? For instance, suppose you could boost your portfolio by 1% by focusing on smart design which may or may not be market timed. That might get you an extra $45k. My guess is that would be a lot better then making 100% on a $1k day traded portfolio. Might be less risky as well.

In other words focus on the whole forest, not just a little patch.

 

[NW-Bound]

Just peaked at this thread and have read only some of the responses.

If I had that NW *and* age, I'd ask myself how to maximize the happiness in my life. That could be better relationships with people I know and love or making new friends or volunteering in some capacity. Or it could mean learning new skills that broadened my horizons.

Would increasing my NW bring more happiness? Regarding the NW, I'd want to maximize my understanding of how to manage that portfolio. It could mean some trading or not. I personally trade the stock portfolio but in a broad backtested way. For instance, I trade US versus international on a monthly basis rather then holding a fixed percentage of international.

I cannot speak for the OP, but some people get happiness by doing hobbies.

The OP's hobby may simply be writing some software for trading, and the monetary gain is just a validation that the software works.

 

[Lsbcal]

I cannot speak for the OP, but some people get happiness by doing hobbies.

The OP's hobby may simply be writing some software for trading, and the monetary gain is just a validation that the software works.

If that's the OP's intention it seems fine to me. I can only speak for myself and every time I think of short term trading I convince myself that I can get better results and have more fun with another approach. So apologies in advance if I have assumed too much.

 

[NW-Bound]

If that's the OP's intention it seems fine to me. I can only speak for myself and every time I think of short term trading I convince myself that I can get better results and have more fun with another approach. So apologies in advance if I have assumed too much.

I never tried day trading, but strongly suspect that I would lose money.

But the OP seems to have fun experimenting, and there's no harm in it. Even if he loses some money, most hobbies cost money.

 

[DJRR]

Week 4 update….

The comments about me day trading (like this one above) with an initial balance of $500 are comical….

I have over $4.5 NW and I already explained that I’m doing this as a hobby/experiment. Only reason I update this thread was because someone asked me too.

My initial $500 is now $934.21. It’ll be a few weeks before my next update as I’m headed out on a vacation

Fair enough, enjoy.

My only point on day trading is that for me I need $10k per month. To have a reasonable chance of hitting that I would need to trade $600k and make 20% on an annual basis, which would make me a savant investor. Trading that much money would make me a nervous wreck, I have tried. The hardest part about trading is being correct and watching your net worth evaporate because you got whipsawed and bailed cause you couldn't handle the loss even though your algorithm/idea said it would work and it does work 2 days later. Also, a good idea at $10,000 can become a bad idea at $100,000. Liquidity can become an issue for opportunities you find. Trading small amounts or other people's money is the way to go. Like that 20 year old kid who traded his dad/family trust of $25M, put it into Bed Bath and Beyond and turned it into $125M in a month. Nice idea and good gamble but I could never put my entire personal fortune into a zombie company and hope it works out. If it is a hobby it is fun.

 

[RetiredAt49]

Fair enough, enjoy.



My only point on day trading is that for me I need $10k per month. To have a reasonable chance of hitting that I would need to trade $600k and make 20% on an annual basis, which would make me a savant investor. Trading that much money would make me a nervous wreck, I have tried. The hardest part about trading is being correct and watching your net worth evaporate because you got whipsawed and bailed cause you couldn't handle the loss even though your algorithm/idea said it would work and it does work 2 days later. Also, a good idea at $10,000 can become a bad idea at $100,000. Liquidity can become an issue for opportunities you find.

My day trading algo uses many different indicators (RSI, MACD, Stochastic, price action, etc.) and is designed to scalp based on 1 min charts/data near areas of confluence and support/resistance levels.

Key is taking a loss quickly and moving on when the price doesn’t head in the direction you want by using a bracket order with stop loss - thus the trade is 100% automated and it takes out any emotion. I can trade thousands of stocks in real-time and never put all my eggs in a basket (just like my big brokerage retirement account).

Back to my vacation !

 

[DJRR]

My day trading algo uses many different indicators (RSI, MACD, Stochastic, price action, etc.) and is designed to scalp based on 1 min charts/data near areas of confluence and support/resistance levels.

Key is taking a loss quickly and moving on when the price doesn’t head in the direction you want by using a bracket order with stop loss - thus the trade is 100% automated and it takes out any emotion. I can trade thousands of stocks in real-time and never put all my eggs in a basket (just like my big brokerage retirement account).

Back to my vacation !

Enjoy your vacation

I guess to my point, at scale, I do not believe there are 1,000s of stocks that have enough liquidity to get in and out of with a reasonable profit. In a negative market event you will trigger many stop limit market orders that will fill way below your target. Those losses will eat up the pennies that you earned. Also your order strategy puts you in the market maker book and I believe some traders make a living trading against these orders. Anyhow, something to think about as you hone your system.

 

[RetiredAt49]

Enjoy your vacation



In a negative market event you will trigger many stop limit market orders that will fill way below your target. Those losses will eat up the pennies that you earned..

In this bear market I’m shorting most stocks such that I can make just as much money regardless which way the martlet moves… however when markets are consolidating it’s more difficult to predict and I will not place trades during consolidation

 

[Lsbcal]

In this bear market I’m shorting most stocks such that I can make just as much money regardless which way the martlet moves… however when markets are consolidating it’s more difficult to predict and I will not place trades during consolidation

How do you distinguish the market regimes? Is it between bull, bear, consolidate? Is it mathematical or hunch?

 

[RetiredAt49]

How do you distinguish the market regimes? Is it between bull, bear, consolidate? Is it mathematical or hunch?

Since I trade on the 1 min chart/timeframe, I’m looking at intraday trends but I also look at the 200 exponential moving average as an overall trend gauge and will only place trades if they follow the longer trend. I also look at 5 min and 15 min timeframes to find areas of support/resistance but always enter/exit the trade based on the 1 min timeframe.

Thus, it’s mathematically based logic - using exponential moving averages coupled with many other technical analysis indicators like VWAP, stochastic, RSI, etc.

 

[Lsbcal]

Since I trade on the 1 min chart/timeframe, I’m looking at intraday trends but I also look at the 200 exponential moving average as an overall trend gauge and will only place trades if they follow the longer trend. I also look at 5 min and 15 min timeframes to find areas of support/resistance but always enter/exit the trade based on the 1 min timeframe.

Thus, it’s mathematically based logic - using exponential moving averages coupled with many other technical analysis indicators like VWAP, stochastic, RSI, etc.

Sounds formidable. If you are successful I'll be jealous.
Keep us posted as time goes by.

 

[RetiredAt49]

Well I'm back from my two week vacation... My $500 day trading account is now sitting just over $1,000 after (I believe) 5 weeks of trading (believe it's 5 weeks... or 4.5 weeks). Yesterday was a blast when the overall market popped 5% as I didn't lose a single trade all day.

One thing I do enjoy is making money regardless if the stock market moves up or down. The only time I've been bit is during consolidation but because I have a tight stop loss I hardly lose any money on a losing trade.

Another interesting observation... most individual stocks that make up the S&P 500 all move in the same direction - at least 90+% of the time, which leads me to believe that most long term investors and institutions leverage low cost index funds like SPY, VOO and or broader index ETF's like VTI. Point being, if I win/lose a trade on AAPL there's a high probability that I'll win/lose a similar trade on TSLA (or other S&P 500 stocks) so I've been staggering the times I trade them unless the technical analysis is solid (high probability of a successful trade)

 

[RetiredAt49]

Another tip/trick I’ve picked up is to move your stop loss just above the break even point as the momentum builds… that way you never lose a trade (might not capture a huge move if it drops then goes back up)…. I keep my stop loss very tight (although a bit more for highly volatile stocks like Tesla) so that if the trade doesn’t go the way my algo thinks it will - it’ll jump out of the trade quickly and with only a minor loss.

Another thing I do is remove the target/profit limit order if the price flying fast (like yesterday) and just move the stop loss just under the current/mark price to capture bigger profits.

My wife did ask me a god question today… why screw around with day trading a $500 account when our long term portfolio just jumped over $100k in the last two days. Valid point but sure having fun! I plan to bring over a little more stash in weeks ahead. Also need to finish my software program to do this automatically…

 

[Koolau]

An old friend made money day trading for two years. He convinced himself he was good at it and got in at much more than a hobby level. He lost his shirt. What is it Vegas says? "We love gamblers who have a 'system'."

 

[Fermion]

An old friend made money day trading for two years. He convinced himself he was good at it and got in at much more than a hobby level. He lost his shirt. What is it Vegas says? "We love gamblers who have a 'system'."

It even gets the professional fund managers....look at Cathie Wood's Ark investments...down 64% or so this year. The difference is they gamble with other peoples money.

 

[braumeister]

Where I live there have been a lot of highway billboards appearing lately with the big headline:
FLIP STOCKS FOR QUICK PROFITS

Then they tell you to go to daytradefun.com to learn how.

I see this as analogous to when John F. Kennedy's father Joe famously said in 1929 that he knew it was time to get out of the stock market when his shoe-shine boy started giving him stock tips.

(Spoiler: he did, just before the crash)

 

[Sunset]

My neighbor spend 20 minutes telling me how he is day trading and in 2 months is now just using the house money.....

Seems it's popular again.

 

[NW-Bound]

It even gets the professional fund managers....look at Cathie Wood's Ark investments...down 64% or so this year. The difference is they gamble with other peoples money.

Ummm... Not quite the same. Cathie Wood does not even day trade.

The problem with her funds is that their holdings are limited to fancy-schmancy companies with high P/E, and some may not even have any E, or even S.

When the market loses its taste for speculative futuristic stocks and wants down-to-earth companies with real earnings, Cathie has no choice but to stick with the out-of-vogue stocks. No place to hide.

 

[JoeWras]

Heard a radio program where they promise to teach you to day trade and make money using their software. First session is free to prove the worth.

This mystifies me. Why is the software creator hawking their goods? Why not just trade a few million a day?

It's like the old joke about writing a book on how to make money that says to make money, write a book on making money.

OP might be able to sell their software and method.

 

[ESRwannabe]

After I retired earlier this year, I started to study day trading. I’m a software engineer by trade and have many patents related to techniques similar to those day traders use like exponential moving averages.

Currently just playing with different approaches but might put some money towards it especially as I watch my portfolio drop but only if I consistently trade successfully using paper money (simulators).

I have had a lot of success trading among dividend paying stocks. The "trick" is I never bought anything that I wasn't fine holding "forever" just for the dividend income. I never bought anything I didn't consider to be a high-quality company. However, I did take a lot of concentration risk. Often putting everything into just a handful of companies.

I basically doubled my taxable investments ($500k to $1M) from 2020 to 2022 primarily due to trading. Which is why I am stopping and have moved it all into etfs. I have won enough that I'd rather re-allocate for less risk and more tax efficiency.

What I did was buy dividend paying stocks that I felt were undervalued and then I just sat on them until I either thought they were overpriced or I saw another stock that I could trade into that was a better value. I typically held each stock for a few months at a time.

Maybe I am delusional, but I seem to have had a pretty good track record at putting an accurate value on dividend paying stocks.

I started trading in 2020 and I basically matched the S&P 500 in 2020 and 2021 (when growth stocks had a "perfect" environment), and then in 2022 I have done much better than the S&P 500, YTD returns of 29.48% vs -13.26% as of 12-3-2022.

Maybe it was all just dumb luck, but it doesn't matter. I have cashed in my chips and left the casino. I stopped trading once I could get sufficient income from etfs to retire early. Its not worth risking that for potentially more.

I'm now getting roughly $30k in dividends from the etf SCHD.

https://www.schwabassetmanagement.com/products/schd

 

[FLSUnFIRE]

What I did was buy dividend paying stocks that I felt were undervalued and then I just sat on them until I either thought they were overpriced or I saw another stock that I could trade into that was a better value. I typically held each stock for a few months at a time.

That sounds more like value investing than day trading to me.



When I played with individual stocks, I would discount my expected future value (typically conservatively estimated future EPS along with a conservative future PE ratio) by a desired rate of return (15% in a low inflation environment) and would buy companies I felt were relatively safe (good established business and not highly leveraged -watch those balance sheets). I did well and beat the market over the next 2 years on almost all my purchases but was not disciplined at selling my winners and rode a few down losing some of my gains. I then made myself a rule to sell half when it doubled if I still liked the stock. -Then I felt I missed out as they kept rising but at least I didn't ride them down! I only own one stock at this time and am liquidating it for living expenses first. I've "proven" my analysis to work well but don't have any false security that would be able to beat the market consistently over a longer period and would have long periods in cash when I couldn't find anything I liked that was undervalued.

 

[ERD50]

(11-11-2022, 09:27 PM ) ... My wife did ask me a god question today… why screw around with day trading a $500 account when our long term portfolio just jumped over $100k in the last two days. Valid point but sure having fun! I plan to bring over a little more stash in weeks ahead. Also need to finish my software program to do this automatically…

Any update for the past 3 weeks?

-ERD50