Personal opinion: there’s uncaptured alpha, esp. in the area that don’t scale (smaller stocks, etc.), and you need to understand what you correlate with and what your risk management is.
To play that successfully the best is normally to have a lot more than a single strategy though, you’d want to take many uncorrelated bets with a small edge (e.g. 52%), and be really good at managing your risk/leverage. That said if you’re good at finding those, maybe just go work for a hedge fund, I heard the compensation is pretty good.
(Or see if you can contribute them to some alpha capture program, then you’re not responsible for providing the capital and not on the hook for losses)
Given above, why are you even considering day trading as a side hustle? Even more given your observation that winning at it requires a lot of edfort whereas you have admitted more or less that you are lazy?
If anything, I’d use my IBKR account (paper trading) to experiment and learn about the subject. The costs associated would basically only be the costs for live market data, which is 15$ a month or so for all US stocks.
I do not plan on trading fx, commodities or any CFD leveraged certificates. I’d learn about the simple and not so simple math of risk management and I’d learn some technical analysis.
Yeah this is what I found as well, the number of traders making real bank is very very small (tiny) - however, that doesn’t have to mean much in an isolated context.
Most people going to the gym, starting to play guitar or learning Chinese also don’t succeed - not because weight lifting or playing guitar or Chinese is this unbreakable barrier that filters out 99% (or 95%) of people, but simply because a lot of people try things - with very little idea about the required effort, commitment, discipline, etc. a teller for this is the fact that a lot of people get margin called out - as I said in previous comments, this shouldn’t even come close to happening, because you should have a stop loss at your calculated risk that you’re willing to take.
Not saying or claiming it’s that way with trading as well, but if I’d start an IT business right now without skills to show for it, my success chance would likely be not much higher.
99% of people also never FIRE, doesn’t mean we you can’t try to do it.
Everyone needs a hobby. And hobby are costly, that’s ok as long the cost brings joy. If you really want to do that, I’d set some clear rules if I were you. Like a core-satellite approach.
90% core: you current portfolio, VT etc
10% satellite: day trading, whatever you want
The most important rule: never sell something from core to finance you satellite.
Do you expect the ROI to be better daytrading (with all the required time, learning, expenses, risks) than just putting that effort in your day job (I recall on another thread you chastising your boss for working hard and only making 30% more than you; perhaps an extra effort from your side could make you his successor).
Rule is incomplete (just like the proposed 2k investment): valuations/values - of the core and the satellite portfolio - are going to fluctuate from the first day onwards, what’s happening then?
(Rebalance? One time investment and let it take its course from then on? Other?)
When I talk about day trading, I mean trading very fast - holding the trade a couple of minutes to half an hour at max (so not picking single stocks based on fundamentals). Changing valuations or fundamentals of stocks are basically irrelevant in that case - I’d just do trading based on technical indicators and news (although news are overrated, as I’m not as fast as others in that regard).
In my proposal I definitely would not put in more money based on an allocation. If anything, it’d be an experiment with fix sum (2K) which is less than the daily fluctuations of my NW.
Im talking about valuations/value of the core portfolio and the daytrading portfolio. Edited my post for clarification.
Makes sense to me.
Allocate 2k once, see what happens, stop daytrading for good if it drops to 0.
It’s what I would do too if I wanted to dabble in daytrading.
I agree. One of the best ROI for me came from not being lazy early/mid-career but pushing hard to break into more senior / executive ranks with all related salary, bonus, equity, etc. benefits. Your boss I suspect is not ‘dumb’ for working harder (and making 30% more in his job than you in yours), but is more ambitious and wants to continue to move up.
You don’t need to be a rock star, pro athlete, PE hero, entrepreneur, etc. to be financially successful, you can also get there through a corporate career… but it typically requires moving up… and that requires not being lazy.
Unless you’re purely planning to do daytrading ‘for fun’ (I can’t think why one would do that, although I admit my non-daytrading investment efforts are also stimulating intellectually), I suspect you’d be financially better off taking a different approach to your career.
Not intended to be harsh criticism, just realistic feedback.
My boss is at the end of his career path, he’s 62 and will retire in 3 years or so. He does not “work hard to climb the ladder” he’s just a boomer and his hard work doesn’t pay off at all (imho) - he’s divorced and I bet he’d earn 30% less so his kids speak to him more (speculation).
Also, you seem to have a pattern of starting fights based on other, completely unrelated threads (and not only with me) imho this is a bit unhinged and unfair and you should probably stop doing that as it adds no value to the discussion.
I’m happy your work ethic brought you to senior positions - good job buddy! I don’t need a lecture on my career based on you feeling attacked in another thread - to put it bluntly.
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