Talk:Day trading

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This is the talk page for discussing improvements to the Day trading article.
Article policies
Day trading was a good article nominee, but did not meet the good article criteria at the time. There are suggestions below for improving the article. Once these are addressed, the article can be renominated. Editors may also seek a reassessment of the decision if they believe there was a mistake.

Reviewed version: February 8, 2007
It is requested that a photograph or photographs of one of a hectic floor-trading session, one of a graph showing important variations over the course of the day, and maybe one for each technique. be included in this article to improve its quality.
The Free Image Search Tool (FIST) may be able to locate suitable images on Flickr and other web sites.

My changes to this article were significant and I hope to add more to this article as well as the empty tributary articles. If you see any mistakes or faux pas, please let me know.

--Tony C- 22:09, 26 Mar 2004 (UTC)

Contents

[edit] anti day-trading bias in 1st para

I have fixed some of the anti day trading bias in the 1st para but there is work to be done. I do not see why the activity is any more risky than any other trading: If you are dealing in cars, in tomatoes or, say, stocks and shares, then all these can be risky - especially so if you do so with a loan from your bank or broker. And margin trading is just that, a loan from your broker. Losses are common but so are gains, not just "occasionally". And of course professionals (i.e. successful day traders) and banks do day trading also!!!! It does not just refer to Joe Soap, bored househusband, risking the housekeeping money. Paul Beardsell 19:33, 13 Mar 2005 (UTC)

I don't know how to put this other than to be blunt. This article is just plain wrong. The definitions are largely incorrect. I have checked several investment dictionaries and Google to see if there is more than one common usage of the terms, and I have not found any of them at odds with what I would have considered the standard. I have daytraded full-time for a living for four years now.

To my mind, the information as a whole is misleading and omits most of the action that makes up "daytrading".

I'm open to discussion and correction, but I'm going to go ahead and rewrite it top to bottom.

Masonbarge

The current article isn't bad at all. I used to be a day trader too, and can attest to the accuracy of what we have here now. One thing missing is the formal "Regulation T" definition of how the US IRS defines day trading. I'll add it to my to-do list. Owen× ☎ 17:17, 23 September 2005 (UTC)

I should be more specific, I guess, if I allege mistakes (I have already redone some of this):

  • Trend trading has almost nothing to do with time period. It refers to a strategy that can be used in any time frame from 5 minutes to 5 years, although probably 2 hours to 6 months would be more common.
  • Swing trading has to do with time period
  • "Position trading" involves holding issues over long periods of time
  • There is an enormous emphasis on spread trading. I really don't know of anyone other than market makers who do this as their primary strategy any more. The "SOES bandits" made fortunes on it, but that is historical and the market makers will fleece anyone they notice doing it today. Really, this belongs in the historical section.
  • There is no real discussion of trend trading, news and earnings trading, technical trading, range trading, or scalping, which are the techniques used by most day traders.

Reg. T is a Federal Reserve Bank regulation, not an IRS reg. I think the IRS only defines "trader" as opposed to "investor". The IRS also is important in the choice of accounting methods (specifically, using mark-to-market accounting). These are all important to the professional day trader but are not peculiar to day trading as opposed to other kinds of trading.

Masonbarge

[edit] Move to WikiBooks?

I've recently been reading about WikiBooks and there is some desire to move How-To information out of WikiPedia over there. Obviously this page has quite of a bit of How-To information (e.g. Techniques) which could be moved. I think it'd be nice to have a real instruction manual for Day Trading but it sounds like a bigger project than just editing this page, but maybe it doesn't have to be. For example see wikibooks:Technical Analysis Any thoughts? Ewlyahoocom 14:50, 8 October 2005 (UTC)


[edit] Merge with day trader?

Shouldn't this article be merged with day trader? S Sepp 16:05, 10 May 2006 (UTC)

No. In fact, it should simply never have been created. It appears to have existed happily as a redirect until 11 March 2006 when User:Typelighter started turning it into an article (see the history of that page). (Even more confusing is that he never even seems to have made an edit to Day trading.) I'll post a note on his page asking him to explain. Ewlyahoocom 17:56, 10 May 2006 (UTC)
No. For the same reason that we have articles for economics and economist; biology and biologist; or science and scientist. Typelighter 12:51, 25 May 2006 (UTC)
I'd have different articles. though they'd definately have very similar content in each article.Mynameiscurtis

[edit] external links

Removed Stock Broker Career from external links. Talous 10:26, 8 June 2006 (UTC)


[edit] Merge Suggestion

This article should be merged into day trading for the following reasons:

  • Article in day trading is in much more depth than this one. This article should thus be merged into, NOT merged from
  • Many info in this article is an duplication of day trading
  • This term is related to day trading, so this article qualifies a redirect type of {{R from related word}}
  • Other articles do the same (eg scalper, scalpers, scalping)

--Wai Wai 19:36, 18 July 2006 (UTC)

I oppose the merging because day trader is the professional and day trading is the activity/investment strategy. Your proposal was made many times before, and I think the conclusion was to maintain two articles, one for day trading and other for day trader. Page Up 12:48, 19 July 2006 (UTC)
Merge (to here) the only thing day trader talks about is daytrading --Smallbones 12:22, 24 July 2006 (UTC)

I merged most contents related to day trading here and remove the redundancy on "day trader" article first. Please discuss whether a redirect is more suitable since it qualifies "Category:Redirects from related words" --Wai Wai 10:44, 26 July 2006 (UTC)

[edit] Zero-sum

I removed a paragraph describing day-trading as "negative-sum". This looked like original research, and was not strictly true: The number of players in the "game" is always changing, and inflation as well as economic growth make stock prices grow on average. Therefore zero-sum or non-zero-sum comparisons are of little use. Yandman 08:36, 13 September 2006 (UTC)

[edit] Lack of any peer reviewed references or criticism

This article is completely devoid of any peer reviewed papers studying day trading. Furthermore, very little criticism of day trading is mentioned. Scott5834 16:24, 30 October 2006 (UTC)

Hi Scott. When starting new threads on talk pages, always add them to the bottom. And don't forget to sign your posts with ~~~~. Anyway, I agree that there are few references. However, the article is, in my opinion, neutral. The facts, and risks, are presented fairly. Remember that we are here to give facts, not to help the reader by giving him advice. Previous versions of this article read like warning leaflets, and so we changed them to try and keep an encyclopaedic tone. What particular criticisms would you like to add? yandman 09:04, 30 October 2006 (UTC)
Well, I feel the article is still giving advice. Sections like Key of success read like a magazine article promoting day trading. I'd like some analysis (in the form of reviewed papers) on whether day trading really involves skill/strategies or is merely gambling. There's one paper mentioned in the article (the only referenced peer reviewed paper), "Do Individual Day Traders Make Money? Evidence from Taiwan", but I've read many others contradicting this. I'll see if I can dig up references. Scott5834 13:51, 30 October 2006 (UTC)
True. Would you be interested in trying to bring this article to GA (or even FA) status? Anyone else interested? Tell me, and maybe I'll set up a wiki-project so that we can get this show on the road... yandman 14:51, 30 October 2006 (UTC)
Sounds like a lot of work, but I'd be willing to help! Scott5834 18:18, 30 October 2006 (UTC)
Froody. I'll get a few things up and running tomorrow. yandman 20:00, 30 October 2006 (UTC)

[edit] Citecheck template

Citecheck is an unusual template that has a very narrow purpose: it points to misuse of citations, such as quotes taken out of contexts or article statements that aren't supported by a cited source. Citecheck doesn't apply if the problem is a need for more citations or if the article has an imbalanced point of view. I suspect that some other template would be more appropriate for this article. Please review. Durova 21:05, 30 October 2006 (UTC)

Sounds right. Go ahead and change the template to something more appropriate. Scott5834 21:20, 30 October 2006 (UTC)
Put some new templates up. yandman 08:09, 31 October 2006 (UTC)

[edit] Improvement Drive

This section of the talk page is for discussing changes that have been, and should be, made to Day trading in order to get it to GA-status. Reply to the posts below if you've found something suitable, or add a new item if you think we've overlooked something. yandman 09:10, 31 October 2006 (UTC)


  • References. We need to get more refs, preferably online, but if anyone's got magazine/newspaper articles on day trading, that would be a great help.


  • Images. A few images would be good. One of a hectic floor-trading session, one of a graph showing important variations over the course of the day, and maybe one for each technique.
I've put up "Cisco_Oct_30.JPG", but I'm sure there are better ones. yandman 13:56, 31 October 2006 (UTC)


  • Tone. As it stands, this article has lots of decent content, but reads more like a manual rather than an encyclopaedia article. We aren't here to gice advice or warnings. We're here to give facts.

[edit] Recycle Bin

If you've removed material from the article but feel it could be useful, put it here. If you've found some useful info but don't know where it should go, put it here. yandman 09:29, 31 October 2006 (UTC)

  • Key of success

Day trading is never intended to be an easy game. It is a very difficult game in which 80-90% of day traders lose. In order to be successful in day trading, one should satisfy the following requirements:

  1. Trader's Requirements:
    1. Good Mentality - Day trading is a mentally and psychologically challenging activity and is by no means meant for everyone
    2. Quick Decision-making - one needs to think very quickly in order to make prompt and correct decisions.
    3. Fast Reaction - even if one can spot on opportunities very quickly, it needs fast hands to execute your decisions. Opportunities can be missed within a second in a rapid market.
    4. Discipline - Day trading requires strong discipline, or one will easily deviate from what one plans beforehand
    5. Risk and money management - good risk and money management helps to minimize losses and maximize profits. Some may suggest one should limit their losses to no more than 2-5% of the working capital on a single trade. An Anti-Martingale approach to money management will reduce the chance of devastating losses.
    6. Technical Analysis - Technical analysis is required to gain a winning edge in the day trading world. Fundamental analysis has nothing to do with predicting daily or short-term price movements.
  2. Facilities Requirements:
    1. Enough Capital - At least US$25,000 is required for US citizens according to the US National Association of Securities Dealers, Inc. (NASD) Rule. Accounts with significantly more balances are better because this can help day traders to withstand a period of drawdown from a series of bad trades, and to allow some diversification among strategies.
    2. Advanced Facilitates and tools - Many day traders use computers, technical analysis software and the Internet as their main working tools.
    3. Direct access to the exchange - They need direct access trading systems to facilitate their trades. They need to know to route their orders to get the fastest executions and the best prices.
I removed this from the article, it reads too much like a manual. But there's some useful information that could be worked into the rest of the article. yandman 09:30, 31 October 2006 (UTC)


  • Risk of day trading

According to the US Securities and Exchange Commission, "most individual investors do not have the wealth, the time, or the temperament to make money and to sustain the devastating losses that day trading can bring." [1] They list several facts that every daytrader should know

  • Be prepared to suffer severe financial losses
Day traders typically suffer severe financial losses in their first months of trading, and many never graduate to profit-making status.
  • Day traders do not 'invest'
  • Day trading is an extremely stressful and expensive full-time job
  • Day traders depend heavily on borrowing money or buying stocks on margin
Borrowing money to trade in stocks is always a risky business.
  • Don't believe claims of easy profits
  • Watch out for 'hot tips' and 'expert advice' from newsletters and websites catering to day traders
  • Remember that "educational" seminars, classes, and books about day trading may not be objective
  • Check out day trading firms with your state securities regulator
Same reason. yandman 09:31, 31 October 2006 (UTC)

[edit] GA nomination

[edit] Failure

I guess my issue is, overall, are the sources for this article, or the lack of. Further tone seems a bit encyclopaedic, such as referring to the day-traders as "they" in many concurrent sentences.

I think overall the article is good, but not good enough to fulfil the "good article" requirements (see WP:WIAGA). It would be hard to verify a lot of what is said in this article. However, If you could somehow incorporate citations and backup the claims in the article, then that would make a huge different and the article should then be re-considered for review.

GA review (see here for criteria)
  1. It is well written.
    a (prose): b (structure): c (MoS): d (jargon):
  2. It is factually accurate and verifiable.
    a (references): b (inline citations): c (reliable): d (OR):
  3. It is broad in its coverage.
    a (major aspects): b (focused):
  4. It follows the neutral point of view policy.
    a (fair representation): b (all significant views):
  5. It is stable.
  6. It contains images, where possible, to illustrate the topic.
    a (tagged and captioned): b (lack of images does not in itself exclude GA): c (non-free images have fair use rationales): 
Nja247 (talk • contribs) 20:04, 8 February 2007 (UTC)

[edit] Retail day trading locations?

It seems very strange that in America, you can go to a casino to pull a slot machine lever and lose several percent of your money on average with each pull, but there aren't (that I know of) places where you can go to wager limited amounts of cash on day trading. It would seem a very attractive retail idea - set up a coffeehouse environment with computers and multiple news monitors and coin-operated "slot machines" that automatically buy a number of shares (on the house's margin) from a given exchange, and sell them some seconds later, returning a percentage of any profits as a payout (also perhaps providing a valuable information source...). People could hang out there, eat, chat, watch the news, try their luck on the machines, and unlike at the casino, they'd come out ahead a little more often than behind, and with much more enjoyment. I remember seeing a documentary describing that people often buy and sell stocks in a social retail environment in China - is something like this legal in the U.S.? If so, is it done? Mike Serfas 05:20, 14 November 2007 (UTC)

I've never heard about anything like this in the United States. It would be fun to establish that sort of a business, but, entirely subjectively, I doubt it would attract many customers, even in New York City. Cww (talk) 07:26, 5 January 2008 (UTC)

[edit] Stock graph

The "stock" graph at the top of this article is abysmal. It has no labels, no values, and no real content other than a jagged line. I'm not at liberty to post screenshots of my own trading software, but perhaps someone else could? Cww (talk) 07:28, 5 January 2008 (UTC)