About Day Trading

I've been trading off and on in the markets since 1998.  Although the title of this post is about day trading, I can't say that I've ever been a day trader.  But I have made many, many day trades.  This may seem to be a contradiction.  But it is more a reflection upon me as an undisciplined individual.  Day trading, as such, is a system.  I never had a system.  That is, a system for trading.  I tried to create a system once, but it wasn't exactly a day trading system.  Even if I had a system, I don't think I would stick with it.

The system I developed was based upon data I downloaded each day from IBD.  It was quite comprehensive in many respects. Based upon this data, I felt that I could come up with a system of screening stocks and buying them at the most opportune times.  This didn't work too well, for many reasons, not all of which had anything to do with the computer software that I was writing.

The actual trades are what threw me.  There is a lot of emotion that goes with the territory.  If you can't control that emotion, it doesn't matter how good your information is.  I don't think I am well suited for day trading.  It is too nerve wracking.  No system can trump emotions that are going to work against you.  Plus it doesn't help if you lack discipline.

In discussions on  stock bulletin boards, I heard about VectorVest.  I had described my software, and one guy told me what I had written sounded like VectorVest.  Subsequently, I began using VectorVest, but the results weren't really any different from what I had been getting all along.  By the way, this isn't to criticize VectorVest, it is a commentary on the technique of day trading.  Yet, I have defended day trading.  But day trading isn't a bad way in and of itself.  The only thing I am saying is that it must be something that suits your temperament.  It doesn't suit mine.    If you are a really cool customer, you might succeed at day trading.

I have had more success with investing, not trading.  I don't know exactly why that is so, but it does work for me.  If I had an explanation for it, I would think that long term trends are more durable or maybe they just seem that way.  You can have more confidence in them, so you won't get discouraged if the day's action goes against you.  If I have a system now, it is an investing system.  But I don't think of it as a system per se.  Let's just say I try to analyze events as they are and take my actions based upon the results as I see them.  The events I analyze are analyzed over the long term.  I think confidence levels can be maintained over the longer term than the shorter term.  But this could be more a temperament issue than anything else.

None of this should be construed as advice.  This blog isn't in that business.  All I'm doing is relating my own experiences, for whatever that is worth.

Incidentally, I've read a bunch of books on the subject.  I don't think the knowledge in these books seemed to help at all.  Again, that's not to criticize the books, it is just a matter of your own responses to events as they occur.