Anyone Tried Day Trading After Retirement?

[Rianne]

My BIL took a very nice inheritance, ~ $200K, went into his bedroom, and started day-trading. This action mirrors his personality, unpredictable and risky. One might say entrepreneurs exhibit the same characteristics. He lost it all. Made uninformed knee-jerk decisions and is currently in debt beyond the ability to pay it back. What can you say? When it's a member of your family, it is painful. But no help from us, it is sad to watch and hear about his disastrous adventures.

 

[luckydude]

As the OP of this thread, my passion is not to sit in front of monitors all day… plan to use my software engineering skills + prior patents/algorithms to build a fully automated trading platform. Looking at it more as a hobby and something to keep my mind sharp as I’m only 50 years old.

Can you share your strategy in broad strokes? I don't know anything about day trading and am curious as to the kinds of strategies that can be automated.

 

[braumeister]

Around here we have a lot of billboards offering "day trading classes to earn big profits quickly".

I think that says a lot about our economy (locally, at least) and even more about how little people understand the underlying mechanisms they would like to learn to exploit.

 

[RetiredAt49]

Can you share your strategy in broad strokes? I don't know anything about day trading and am curious as to the kinds of strategies that can be automated.

Where to start…. Day traders use all sorts of technical analysis, indicators, etc. but rather than sit behind a desk monitoring dozens/hundreds of stocks and all of their indicators… I’m gonna do it programmatically by back testing a variety of strategies to give me a win/loss ratio by asset. I will then get a real-time feed of stock market data and essentially automatically buy/sale throughout the day. Right now I’m just manually trading various strategies while writing the software to do it automatically.

 

[Amethyst]

I know two men who got into day trading after losing jobs. Neither of them were dumb, but they both admitted day trading had made fools of them.

They ended up with less money than they started with. One compared it with gambling, said it was like a habit he needed to "kick."

"The big guys control the markets," was the other one's opinion.

No. But a few years ago during a conversation with our CPA I casually mentioned day trading as a bit of a joke.

Her response was that she had several day traders as clients. Mostly made up of people who had lost their jobs fpr reason or another.

Her comment was that not one of them had done all that well from a tax year income perspective. Sure, they had some great hits and liked to talk them up.

But she audited their statements, did the tax returns. She said she quickly learned about the dog trades they never mentioned.

 

[luckydude]

Where to start…. Day traders use all sorts of technical analysis, indicators, etc. but rather than sit behind a desk monitoring dozens/hundreds of stocks and all of their indicators… I’m gonna do it programmatically by back testing a variety of strategies to give me a win/loss ratio by asset. I will then get a real-time feed of stock market data and essentially automatically buy/sale throughout the day. Right now I’m just manually trading various strategies while writing the software to do it automatically.

Thanks for sharing.

Actually that sounds like a fun challenge. I was a CS major in college and used to enjoy writing snippets of codes for fun, and I can see this being a fun hobby to keep your mind sharp and maybe make some money out of it in the process. Please keep us posted of your progress and best of luck!

 

[RetiredAt49]

So do it, and please report back - weekly updates here?



-ERD50

You got it! I’ve been paper trading my strategies on ThinkOrSwim (TD Ameritrade’s) free platform. No commissions, no transaction fees. So far I’m impressed but again not planning to sit there all day using their tools when I can automate my own trading via software.

 

[NW-Bound]

I have never tried day trading, but see that I don't know how to formulate a strategy with the market movement so random. If someone can do that he can make money, but it's not for me.

Additionally, as a poster has pointed out, the statistics show that the market movements overnight between market close one day to market open the next day are a lot more than the intraday movements. Hence, I am more of a swing trader. And I sell covered call and put options instead of the underlying shares in order to get the additional benefits of the time value decay.

 

[FLSUnFIRE]

IMO Day trading by it's nature is zero-sum and very close to gambling and the big players have the house advantage as any reliable money to be made is likely by fast computers and at low marginal rates but high volume. I get the allure but for every winner there is a loser. If I were to try it, it would be in a security that I researched and wanted to own long term incase I got stuck but at that point I'd probably be better off just selling put options but that doesn't seem as sexy. I would not recommend it for individuals but am not against day trading/trader as I think it adds liquidity to the market -perhaps along with a bit of intraday volatility.

 

[jurgs01]

I don't consider what I do day trading, but I do trade daily. I usually focus on catching the peaks of an overbought position with limit short orders ( requires me to be up early in the premarket). I also short stocks in downtrends and trade ranges of volatility.

You can make money, and it doesn't require sitting in front of the screen all day, but you have to be disiplined, not too greedy, and know when to cut a loss.

 

[RetiredAt49]

So do it, and please report back - weekly updates here?



-ERD50

Well after my first week dipping my toes manually day trading with my whopping $500 account… I made around $75… not too shabby only spending about 4 hours actually trading.

Using the stochastic + RSI + divergence + various price action strategies seemed to work really well. I back tested that strategy using 6 months worth of data and did well using paper trading.

Next step - programmatically automate what I’m doing manually while also performing more live trades.

 

[nnkrealtor]

Here's the thing about day trading.
I can see it working out if 85% of your focus is risk management.
Cut your losses as soon as a trade turns against you. (admit you were wrong and get out quickly) and allow your winners to run a little more when they do what you thought they would do. Set a daily profit target and once hit GET OUT and go enjoy your day.
It's really more about psychology than anything.

 

[RetiredAt49]

Here's the thing about day trading.

I can see it working out if 85% of your focus is risk management.

Cut your losses as soon as a trade turns against you. (admit you were wrong and get out quickly) and allow your winners to run a little more when they do what you thought they would do. Set a daily profit target and once hit GET OUT and go enjoy your day.

It's really more about psychology than anything.

Duly noted… which is another reason why I’m writing software to do this (takes any/all emotion out of it)… and the ThinkOrSwim (TD Ameritrade) platform is free (no commissions/fees)

 

[ERD50]

Here's the thing about day trading.
I can see it working out if 85% of your focus is risk management.
Cut your losses as soon as a trade turns against you. (admit you were wrong and get out quickly) and allow your winners to run a little more when they do what you thought they would do. Set a daily profit target and once hit GET OUT and go enjoy your day.
It's really more about psychology than anything.

I doubt that works at all. Stocks are volatile, many will dip on the way up. You'd constantly be locking in losses.

-ERD50

 

[arcyallen]

I doubt that works at all. Stocks are volatile, many will dip on the way up. You'd constantly be locking in losses.

-ERD50

Yes, but when you're making about 800% annualized returns like RetiredAt49 made with their day trading last week, you can lock in a few losses here and there.

Riiight?

I''m not sure what I can even type here that would make sense at this point. Investor sentiment and "systems" are mesmerizing to me.

 

[ERD50]

Yes, but when you're making about 800% annualized returns like RetiredAt49 made with their day trading last week, you can lock in a few losses here and there.

Riiight?

I''m not sure what I can even type here that would make sense at this point. Investor sentiment and "systems" are mesmerizing to me.

Not if the losses eventually eat away at those gains. That is to be seen.

-ERD50

 

[RetiredAt49]

Not if the losses eventually eat away at those gains. That is to be seen.



-ERD50

Week 2 update… my $500 account is now sitting at $613.14. Sticking with a 1 min scalp strategy using large cap funds (low spreads) seems to be working well - that and a solid risk management strategy of placing a bracket order such that any trades not going in my direction I take the loss quickly. I have about a 72% win rate thus far. Still haven’t automated trades programmatically but leveraging the ThinkOrSwim platform for setting semi-automated trades.

 

[arcyallen]

Not if the losses eventually eat away at those gains. That is to be seen.

-ERD50

I was joking. If you're making 800% annualized returns, that's not exactly...sustainable, that's just a blip. And losses will be 100% inevitable.

 

[RetiredAt49]

Week 3 update… I didn’t do much manual trading this week but worked on my algo software… my $500 initial account grew this week to $741.

 

[DJRR]

Week 3 update… I didn’t do much manual trading this week but worked on my algo software… my $500 initial account grew this week to $741.

Well, at least you are ahead of inflation Add 3 zeros to the numbers and I would be interested. The emotional stress and liquidity of $500 trading is not meaningful to me. You are basically reduced to trading insignificant sums or other people's money. You don't know how good you really are until you are trading half your personal net worth on a daily basis - red or black?

 

[Badger]

Well, at least you are ahead of inflation Add 3 zeros to the numbers and I would be interested. The emotional stress and liquidity of $500 trading is not meaningful to me. You are basically reduced to trading insignificant sums or other people's money. You don't know how good you really are until you are trading half your personal net worth on a daily basis - red or black?

If it is so good I would think there would be confidence to take the suggestion. Otherwise it's just blowing smoke.

Cheers!

 

[RetiredAt49]

If it is so good I would think there would be confidence to take the suggestion. Otherwise it's just blowing smoke.



Cheers!

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

 

[Sunset]

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

A comparison would be nice, so using Sept 19th for VTI etf $195.18 a comparative amount would be 2.561737883 of VTI shares.

Score is: VTI: $480.30 DayTraderAccnt: $934.21

 

[ERD50]

Well, at least you are ahead of inflation Add 3 zeros to the numbers and I would be interested. The emotional stress and liquidity of $500 trading is not meaningful to me. You are basically reduced to trading insignificant sums or other people's money. You don't know how good you really are until you are trading half your personal net worth on a daily basis - red or black?

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

 

[MarieIG]

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

I just saw the updates. I hope you enjoy your vacation and keep updating when you get back. I believe that your restraint is just another sign of your intelligence.