

Day Traders 2.0: Wired, Angry and Loving It - ojbyrne
http://www.nytimes.com/2010/03/28/business/28trader.html?ref=business&src=me&pagewanted=print

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axiom
I'd bet good money that they make most of their money selling subscriptions to
their stock tips platform rather than actually trading.

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rdtsc
Bingo! The way to be a successful day trader is to:

1) Make other believe you are a succesfull trader (just use lots of technical
mumbo jumpo and a trading platform with a black background with lot and lots
of bright colored graphs, lines and abbreviations that nobody, including you
understands)

2) Sell subscription for others to "virtually" look over you shoulder.

3) Profit

Maybe I should sell subscription for others to "virtually" look over my
shoulder while I program. I use emacs with a dark colored background and
bright text, so there'll be plenty colorful "technical" looking crap to look
at.

Besides, I talk out loud to myself, so subscribers get to listen my grunts,
exclamations of excitement and swearing ($10/hour more for audio streaming?)

Or maybe not, they'll just make fun of my segfaults and how untidy my APIs
are...

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simon_
These guys are obviously charlatans. He claims to reliably make >$100K/yr
trading his $100K account. If he could really generate 100% return on capital,
he would be the richest person in the world. (Or... at least he would have
more than $100K to manage.)

The author isn't totally uncritical, but it's annoying that he gave these guys
so much space in the Times to advertise.

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lrm242
Assuming he compounded all of his returns he'd be the richest person in the
world. Making 100% on 100k is demonstratively easier than making 100% on 100m
and is not unheard of. So why doesn't this guy manage other people's money? No
where in this article does it mention his account volatility or average draw
down. This guy might be making 100% return with a peak to valley draw down of
75%.

Don't assume they are charlatans just because you don't understand what
they're doing.

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cynicalkane
The reason I find it dubious is because $100k is not very much. You need to
make very large trades--risking thousands of dollars at a time--or else you'll
be eaten by fees and commissions.

I don't know anything about day trading, but I used to play poker
(profitably), and know sports betters. $100k is simply not enough to be
risking thousands of dollars on single bets, unless the bets have an enormous
edge--an edge that is economically impossible in the algo-dominated, limited-
information world of day trading. You will go bust.

I could produce math for you, but I'm lazy. But I've seen so many poker
players go bust taking risks like this, and poker is a game where it's
unbelievable how many morons are willing to throw money at you. Not like day
trading.

~~~
lrm242
There are a lot of subtleties with trading. To make money you need positive
expectancy and you need 'inventory', or tradeable markets. They don't have to
make large trades to make money. You have to consider transaction costs,
rebates, avg win size, avg lose size, holding period, and a number of other
criteria before you can judge these traders.

I don't claim they won't go bust, but I do take issue that simply because they
make out-sized returns they are labeled charlatans.

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aidanf
_"He starts off poorly, losing about $500. But a timely bet on a company
called Rackspace Hosting (“I don’t know what they do,” he says), as well as
quick investments in Applied Materials, Eagle Bulk Shipping and a few others,
have turned things around."_

 _"Asked about the Today Trader method of buying and selling, both men seem
momentarily stumped, as if they never saw the question coming. Then they talk
about the search for “set-ups,” which seems to translate roughly as “golden
opportunities,” but they struggle to put a finger on what set-ups are, or how
to spot them."_

There's not a lot of detail about their trading strategies, but it sounds like
they're just pushing buttons.

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mattmaroon
"'Up $210,' he says, removing his headset. Factoring in commissions, he’s made
$60."

Who wouldn't want to try to make a living at a game with a 70% rake? Oh, plus
taxes.

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rrc
It's easy to be a profitable day trader when the market is melting up. Even
the most incompetent traders would have been making money in the late
nineties. The problem occurs once the market stops going up. At that point
even the best day traders are at a disadvantage, being on the bottom of the
food chain for information and transaction cost/speed.

