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| Dave Rathbun |
 Posted: Mon Apr 24, 2006 9:45 am Post subject: Putting big returns into perspective... |
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CFO
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I think it's impressive to see what the current market leaders have done this month. But let me take the top five active (meaning 10 or more posts) returns and point out something interesting:
Grimreaper, 36 trades, 25.94% retrun
$$bilyal, 10 trades, 17.15% return
nelaina, 37 trades, 12.03% return
jdunn72, 80 trades, 10.93% return
jacobnbr1, 0 trades, 10.80% return
Of the top five, only one person is on auto-pilot, having made zero trades so far this month. And they've managed to get over 10% for the month despite that. Of the next five folks in the rankings, 4 of the 5 have 3 or fewer trades.
What about the non-active (fewer than 10 posts) traders?
There are 8 folks ahead of our active leaders at this point, with returns ranging from 26.87% all the way up to 51.56%. For a month. Not a one of them has more than 4 trades.
So let's look at some more numbers.
Grimreaper, 36 trades, 25.94% retrun, 0.720% per trade
$$bilyal, 10 trades, 17.15% return, 1.72% per trade
nelaina, 37 trades, 12.03% return, 0.325% per trade
jdunn72, 80 trades, 10.93% return, 0.137% per trade
jacobnbr1, 0 trades, 10.80% return, can't calculate with zero trades
Among the active leaders, $$bilya could be, by this metric, ranked as the best trader as they have the best % return per trade, calculated simply by dividing the total return % for the month by the number of trades that it took to get to that number. And jacobnbr1 has earned over 10% without doing anything.
I guess what I'm looking at is the idea that day traders can make money, but they concentrate on making a little return on each trade. That's why commissions are so important to a trader, as each additional dime can eat into their small profits. This isn't news to most people, but I could not resist putting some numbers down as we near the end of the month. |
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| Benjamin |
| Posted: Mon Apr 24, 2006 9:52 am Post subject: |
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Administrator
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Very cool. I really like how it shows the number of trades now. Make for some interesting analysis.
jdunn, nelaina and grim would be as far as I'm concerned day-traders (Making at least one trade for every day in the month).
I wonder how many trades is considered being a day-trader? |
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| Dave Rathbun |
| Posted: Mon Apr 24, 2006 9:56 am Post subject: |
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CFO
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Remember that a buy and sell are each considered a trade, so an in-out for a position is two trades. I guess I should have done the numbers based on the % return / (trades / 2) in order to attempt to get a measure of how much profit is made per in/out combination, rather than trade.
Just take the numbers I posted and multiply two.  |
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| Dave Rathbun |
| Posted: Mon Apr 24, 2006 10:03 am Post subject: |
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CFO
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Big surprise, but our favorite web site investopedia.com has this to say about what makes a day trader:
| Quote: | | Day trading is defined as the buying and selling of a security within a single trading day. This can occur in any marketplace but is most common in the foreign-exchange (forex) market and stock market. Typically, day traders are well educated and well funded. They utilize high amounts of leverage and short-term trading strategies to capitalize on small price movements in highly liquid stocks or currencies. |
Link to full article
They don't define a day trader by number of trades per month, or anything like that, only by trading in and out of a position within a day. One of the items in the article is one I've listed here before, you need capital in order to make it as a day trader. In fact I think there is a $25,000 minimum account balance for someone that enages in patterns of trading that look like day trading.
| Quote: | Sufficient capital
One cannot expect to make money day trading. Day traders use only risk capital, which they can afford to lose. Not only does this protect them from financial ruin, but it also helps eliminate emotion from their trading. A large amount of capital is often necessary to capitalize effectively on intra-day price movements. |
The other 3 important requirements for day trading as listed include Knowledge and experience in the marketplace, Strategy, and Discipline. Read the article for more details, it's short.  |
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| nelaina |
| Posted: Mon Apr 24, 2006 10:22 am Post subject: |
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CFO
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| well i just want to clarify that i wouldnt consider myself a day trader for the purposes of this sim...Everything im holding i am attached to...i have had some great returns this month, so mostly ive been doing some profit taking more than anything else, and using the profits to buy into other stocks that ive been watching, and also to back it up on the stocks that have dipped a little bit...ive also made a few quick trades for a small profit. reguardless, im happy! |
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| jdunn72 |
| Posted: Mon Apr 24, 2006 11:02 am Post subject: |
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Member of The Month
March
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| Benjamin wrote: | Very cool. I really like how it shows the number of trades now. Make for some interesting analysis.
jdunn, nelaina and grim would be as far as I'm concerned day-traders (Making at least one trade for every day in the month).
I wonder how many trades is considered being a day-trader? |
Well, from what I understand real daytraders usually don't hold positions overnight. They don't want to be put at the mercy of the market setting opening prices. Also in reference to Dave's hypothesis I would have to say that the best traders would be the ones who have the best positive to negative return trade ratio, meaning how many of the trades, say out of ten were negative and how many positive. I have only traded in five or six different stocks this month but I was unshaken in my convictions with them enough to re-position every time one of them dropped a little. The hardest thing to do is guarantee positive returns on each trade. For me I am holding 18 positions in five different stocks and only three positions are slightly negative with all the rest significantly not. So, it may be easier to pick one and get good gains but, actually there is more risk but we'll see as time goes on how well it goes for the "RadioActive" traders like us few but , grim is trading more in a daytrader style than I am. I am still holding many positions I had when the month started out. So really by looking at things I think that grim is possibly the only really profitable daytrader here , I tried it and it's hard, I don't really like it at all. I am sticking with my experimental portfolio system I developed here. |
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| Im Not Warren Buffett |
| Posted: Mon Apr 24, 2006 11:20 am Post subject: |
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CFO
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| I think the new stats we are seeing are really insightful, and will be interesting to track in the coming months. I'm particularly interested in Dave's prediction that active traders will run away with the monthly competition. |
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| jdunn72 |
| Posted: Mon Apr 24, 2006 11:26 am Post subject: |
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Member of The Month
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| I think that really good indicator here for how close someone is to a daytrader style might be a super high churn rate. |
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| nelaina |
| Posted: Mon Apr 24, 2006 11:40 am Post subject: |
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CFO
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| jdunn72 wrote: | | I think that really good indicator here for how close someone is to a daytrader style might be a super high churn rate. |
agreed
and i also agree that this is a great new feature, being able to see these stats |
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| geb9696 |
| Posted: Mon Apr 24, 2006 1:04 pm Post subject: |
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Investing VP
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| I want to see how the day traders do when the market is going through tougher times. This new return rate is very interesting in how the active traders do seem to be accumulating the returns at a much faster rate. |
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| Dave Rathbun |
| Posted: Mon Apr 24, 2006 1:12 pm Post subject: |
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CFO
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| If y'all can think of something else that would be interesting / insightful without being too revealing (can't reveal specific holding or trade details, for example) then I can see what it would take to implement them. |
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| jdunn72 |
| Posted: Mon Apr 24, 2006 1:47 pm Post subject: |
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Member of The Month
March
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| Dave Rathbun wrote: | | If y'all can think of something else that would be interesting / insightful without being too revealing (can't reveal specific holding or trade details, for example) then I can see what it would take to implement them. |
Well, I still think it would be interesting to see the overall average index but, I think there is a lot of dead weight sitting in some of these long forgotten accounts. Meaning if you do an index, I think it would only be right that if the account hasn't even been logged into and/or checked in over 60-90 days then it's results should be filtered out, as that really isn't an indicator of an investor / trader but, someone who has forgotten all about it which, investors and traders never do. They at least keep a regular eye on their portfolios. So I think it would be cool to have an index like we talked about before but, make it with active accounts not just active posters and not including those who'll probably never come back as they really represent no strategy or stock belief.  |
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| Dave Rathbun |
| Posted: Mon Apr 24, 2006 2:43 pm Post subject: |
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CFO
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| I definitely want to do the index. Filtering out inactive accounts (defined as someone that hasn't logged in for over 90 days) is a good idea as well. That does mean, however, that the eI index may occasionally move in weird directions as accounts drop off or join based on activity. |
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| Benjamin |
| Posted: Mon Apr 24, 2006 3:25 pm Post subject: |
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Administrator
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| Maybe we can do a seperate little contest for those that have over 30 trades or so in the month for some extra e$. Heh, this month it might still be Grim. |
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| nelaina |
| Posted: Mon Apr 24, 2006 4:10 pm Post subject: |
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CFO
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| geb9696 wrote: | | I want to see how the day traders do when the market is going through tougher times. This new return rate is very interesting in how the active traders do seem to be accumulating the returns at a much faster rate. |
well today, for example, was one of the worst days in at least a month for about 50% of my holdings |
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