11/14   Interesting stock trader psychology I noticed today. The markets
        were mixed and I was pulling for a huge $$$ day (as opposed to the
        so-so one I ended up with) but when it became clear that was not
        going to happen and the rally died then everyone just stopped
        buying, which led to the bloodbath at the close. If you just
        looked at the open and close you would think there was a crazy
        sell-off, but the reality is that most of the eventual losses were
        over the last 10-15 minutes when the bulls decided to call it a week
        and the shorts continued to sell. Given that I expect a rally on
        next week at some point, because "it was not as bad as it looked".
        That plus the G20 meeting over the weekend. Even though my positions
        are still positive (and I usually sell at the end of every day) I will
        hold them overnight. No point selling into the hands of the shorts
        and I'm still green on the day even after the sell off.
        \_ I enjoy reading your motd posts about day trading.  Do you do this
           as a full time job?  Or do you have your brokerage account web
           site open at work at all times?  I don't have the world's most
           demanding job, but I would go insane doing my work and managing
           my account all day like you do.
           \_ All you have to do is watch a handful of stocks on a ticker.
              It's not much time at all. I get up before the markets open
              and see what's up. Then I go about my regular business until
              8am or so when I check again. Between then and lunch I just
              glance at the ticker every few minutes and then at lunch
              time I really watch intently for a time to get out (if I
              haven't already and still have a position open).
        \_ Most day traders end up losing their shorts.
           \_ This can't be true, because for most of history the market
              has risen. A rising market erases a lot of mistakes. It's more
              challenging now than it typically is. If the market is up then
              you will be up even if your buy and sell signals are goofed
              and if the market is down then you will be down no matter
              what you do.
              \_ No, it is true. Volatility + leverage + frequent trading
                 by an amature leads to most of the money ending up in the
                 hands of the pros, over time. I can show you how this works,
                 but I think you can figure it out for yourself pretty
                 easily. If you have real talent at this, you should try
                 to get a job with a brokerage and use OPM. But they aren't
                 really hiring right now.
                 \_ 1. No one said you need to use leverage. I think it
                       would be foolish to even for buy-and-hold. I don't.
                    2. You have a point that transaction fees can eat up
                       profits, but I don't pay any and "Lower profit because
                       of fees and taxes" is not the same as "losing your
                       shirt". It's just less profit (all else being
                       equal) - during a rising market, of course.
                    \_ How do you avoid commissions again?
                       \_ Maintain a certain balance in my account
           \_ All right, both you guys put forth excellent reasons.
              Is there any data?
              \_ Yes, but nothing really great and it is contradictory.
                 Part of the problem is defining what a "day trader" is.
                 There are many strategies that involve buying and selling
                 on the same day and many studies are not careful about
                 differentiating. Someone making money on spreads and
                 trading 400 times per day is doing something very different
                 from a person range trading, for instance. Leverage plays
                 a big part in it, too, because you can be wiped out very
                 quickly if you buy $100K of stock with just $25K in your
                 account if it goes against you. That's why I don't use
                 leverage, although I do use margin for legal reasons.