Wednesday, February 10, 2010

Day Trading or Trade on multi month cycles or Investing

Sometimes, I just wonder which is better....

I have seen people in my age group day trading (contra) successfully, making a few grands a month.

I have seen people in my age group trading on positions and multi month market cycles.

I have seen people in my age group doing FA investing.

Fact is, day trading does work. But... day trading requires constant monitoring... and market only open during my work hours! One's work performance would suffer if one day trades during office hours. Yet... would it matter if one could earn consistently a few grands monthly from day trading? To some, it won't. To me, I don't feel good doing it even if I have that ability to monitor the hourly chart.

So, I guess I have to stick to my combination of FA investing and trading on a longer time frame, while focussing on my engineering work and tuition assignments.


  1. Hi JW,

    Sorry but I am rather skeptical when you say that contra trading "works" and your friends can make a few grand a month. I assume you mean consistently. In that case, they probably never have to work for the rest of their lives cos that's the median salary for most individuals in Singapore!

    My understand is that 95% of people lose money in contra trading over time, as brokerages also help to erode the gains and magnify the losses.

    So could it be that either these friends are not consistent, or they are not telling the whole truth?


  2. Hi Musicwhiz,

    I'm referring to a particular forum I joined. They trade live in the forum's chatbox.

    Of course, there are both losses and gains. The key to their success is tight money management rules; cut losses fast and let profits run. It's eye opening when you see them trade. Not only that, these bunch of people are very discipline and stick strictly to their rules.

    This person I'm referring to is cinderella. Just yesterday alone, I saw her make a profit of about 1k+, by selling half of Goodpack bought in the morning.

  3. Hi JW,

    I see. Well, all I can say is that it looks deceptively profitable. But the amount of risk they take is very high, as short term price fluctuations are very unpredictable. I've heard of cases where people lose their entire year's gain on one bad trade, and I have an uncle who lost 5 years worth of gains in just 1 year through poor trading and frequent cut losses.

    So my point is that it may seem easy and consistently profitable, but the reality may be quite different. (After all, what you are witnessing is just a forum, and this is the Internet after all). Haha.


  4. Hi Musicwhiz,

    the forum is unlike CNA forum. The members do post their trades before the price movements happen.

    Of course, I did see cut losses as well. Not all trades are profitable. But at the end of the day, there's no doubt about the profitability. Charts can be made or destroyed by a single lot buy up or sell down, to trigger even more interest in buying up or selling down. Those are what these day traders are doing. It's not easy, and does not seem easy at all. So it's indeed an eye opener to observe how they do it.

    However, constant monitoring is required, as well as looking at 15 min and hourly charts. Daily charts just doesn't cut it because it's too slow.

    Only thing is, this will interfere with our actual work... and I wonder how they can day trade so much at work...

  5. Well then I suspect day trading IS their work! Hahah......

  6. lol!

    But they are employed not as day traders!

  7. If you have a full time job, day trading may not be suitable

  8. Hi CreateWealth8888,

    exactly! Thanks for visiting and dropping a comment :)


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