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Learning a consistent way of generating profit w/ low risk.
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Learning a consistent way of generating profit w/ low risk.

  #1 (permalink)
Trading Apprentice
Wilmington, Delaware
 
Futures Experience: Intermediate
Platform: ThinkOrSwim, IB TWS
Broker/Data: Amibroker, IB, TD
Favorite Futures: Crude CL, Gold GC
 
Posts: 6 since Sep 2017
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Learning a consistent way of generating profit w/ low risk.

How to learn a consistent way of day trading and what is the best platform for day trading? I have been day trading for around 2 years.

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  #2 (permalink)
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  #3 (permalink)
 Vendor: www.orderflowdashpro.com 
North Carolina
 
Futures Experience: Beginner
Platform: NinjaTrader, Tradestation
Favorite Futures: es
 
Posts: 364 since Nov 2011
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The platform question has been asked and various opinions regarding those sorts of questions are readily available. Regarding consistency, I'm not sure that I have the answer but I will point out a few things:

* High frequency trading firms have the highest consistency. They tend to have very short holding periods and try to profit primarily by facilitating trade versus attempting to predict it. Most trading firms are actually facilitators.

* A trade is generally considered better if it has a higher profit factor or a higher average profit per trade. There tends to be an inverse relationship between profit factor and net profit for trading systems meaning that if one is willing to take more marginal trades then the net profit can increase even as the quality of trade decreases. More over, increasing the number of trades will decrease the risk for a given level of return because you can risk less per trade. The limiting factor is your trading cost. As your profit per trade decreases, the certainty that you can profit anything decreases as well.

* Think about the inverse relationship described above. Next, realize statistically that there must be fewer great times to buy or sell then there are average times in any time frame or sample set. Great opportunities are by nature limited opportunities.

* Reward is very much a symmetrical function of risk taken in markets. If you want a low risk trading method, you can simply decrease the reward. For example, a system that returns 50% with 50% DD could just as well return 12% with a 12% DD with either a smaller position size or a larger account.

* It is thought that markets or strategies may profit from various random factors. Diversification among the factor components is thought to smooth out returns. This would suggest that developing a variety of trading setups is more likely to smooth your returns.

* Elite discretionary day trading is most-likely the result of implicit processing or non-verbal pattern recognition combined with complex cognition regarding markets. Linguistically, we refer to all trading as "trading". However, the specific cognitive processes for each specific form of trading may be different and may require different cognitive styles. More over, successful trading with-in any sub-discipline is most likely a specific combination of variables.

* One should take time to differentiate between a "consistent trading" and "consistent results" and "robust trading" and "robust results".

* Regarding "how to learn", it is best to first identify your existing strengths and compare that to market opportunity. The result of this processing can be thought of as perspective shift. Let's say you are great at trading moderately volatile markets off the open but you are trading a market that has a very low volatility. You have the right skills more or less but you need to reframe them into the right context by switching markets. Next, you should set yourself short-term targeted specific goals that will lead you to the answer. This is an evolutionary feedback driven process where you (1) test/simulate/experiment, (2) evaluate, and (3) repeat the process using what you learned.

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  #4 (permalink)
 Vendor: www.cannontrading.com 
Los Angeles, CA /USA
 
Futures Experience: Master
Platform: Sierra, CQG, TransactAT
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TheSwingTraderX View Post
How to learn a consistent way of day trading and what is the best platform for day trading? I have been day trading for around 2 years.


I think there are many different ways to consistently lose money and very few if any to make money.....that being said, no one size fits all here. Everyone is different in regards to risk capital, risk tolerance, time, knowledge and more....I would recommend exploring and learning about the risks and opportunities of selling options SPREADS as well as learning more about integrating market profile into day trading.

This is obviously my opinion only and one should perform due diligence with regards to their own personal situation.

PM with any questions about Cannon Trading (800) 454-9572 (310) 859-9572. Trading commodity futures, forex and options involves substantial risk of loss. The recommendations contained in this post are of opinion only and do not guarantee any profits. These are risky markets and only risk capital should be used. Past performance is not necessarily indicative of future results.
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  #5 (permalink)
Elite Member
SF Bay Area + CA/US
 
Futures Experience: None
Platform: Tradestation, Ninja
Favorite Futures: NQ ES & Equities
 
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Posts: 1,511 since Oct 2011
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hi 1st of wish you the best in yr trading and what you would like from yr trading.

i went and checked yr posts. Saw the intro from you.

All platforms are equal....unless needed for a specific cause/point. When one figures what they would like...the platform part is easy. It's the trick of the trade where one needs special attention. I wish there were classes.....but am not sure if there are any which can give a money back guarantee. it however helps if one can get a mentor to guide. also depending on the instrument which one wishes to trade there are some fantastic threads...especially on SPOOS and CL.

below is my useless self talking. If does not suit....pls ignore.
trading if treated as a profession..... means you become a professional and learn the in;s n outs. Pls understand this is how i approached it. but i had to do it myself & watch my behaviors/entry/exits is where my hard earned $s went. however I did not have anyone's backing. So $s lost is poof gone from my pocket. Yes I have lost in the beginning...but due to my arrogance and foolishness of thinking i know the stuff ND MAINLY not cutting a small loss.

when i mention profession...it can be a Dr, engineer, painter, car detailer, etc. All professions are great and have their learning curve and must be learnt. For ex:- i wish i could change my car's oil...but i cannot. I do not know how to. So if i am serious about doing so...i need to learn it.

anyways...coming to the consistent part. One must ask one self. Do I understand why markets r selling off...& why they r rising. And can I spot this and where it may do so..... or is it an after fact. And what is the $s at risk...and what could be made. Does one understand market structure and the basis for an entry / exit. once this is done one must also have the psyco stuff pat which then leads to conviction.

>> Pls do not take any of this as advice....as there are many traders here with a ton of experience... and this is just my rambling.

cheers n wish u the best

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