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I'm interested in day trading and want to start educating myself, but I'm a bit concerned regarding AI and automated trading where humans trade vs. computer programs and have no chance at all - I'm not quite sure, if day trading has a future at all. Today I asked someone, who has been trading the stock markets for years if day trading is still profitable for a newbie trader in 2020. He told me that day trading is dead for human beings and automated trading is taking over and I should not waste my time with it.

My question: is it still worth to start learning day trading patterns and trendlines in order to earn some money with day trading or is it true, that there's no place for private human traders as AI and computerized trading systems are taking over?

PS: I know that day trading is risky and takes a lot of education and experience in order to be profitable.

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    I’d just add that it would have to be more profitable than passive index funds and provide you with returns that were great enough to equal/surpass whatever salary you could have been earning during the time you spent educating yourself/analyzing/trading. I suspect that it wouldn’t be profitable for all the reasons that index funds beat most managed funds consistently. – Dugan Feb 26 at 22:52
  • The word "profitable" is not very useful without a time scale attached or a comparison to alternatives. CDs are 'profitable', I don't recommend them. Are you looking to just not have a regular job? – Jared Smith Feb 27 at 2:57
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    "Is playing the craps table and roulette still profitable in 2020?" – Michael Feb 27 at 5:58
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    The "still" is doing a lot of heavy lifting in that question. – Eric Lippert Feb 27 at 18:19
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Today I asked someone, who has been trading the stock markets for years if day trading is still profitable for a newbie trader in 2020. He told me that day trading is dead for human beings and automated trading is taking over and I should not waste my time with it.

What makes this person the authority on the future of trading? Perhaps he's projecting his own failings as a trader? In addition, automated trading is not taking over and ruling the market. And high frequency trading is responsible for a significant amount of daily volume but that's not displacing traders. There's money to be made every day in a plethora of ways.

Day trading is and will always be profitable for those that have the education and experience. But's let's be realistic. In order to live off of it, you need to be heavily capitalized and be able to not only withstand losing years but to be able to withstand withdrawing post tax dollars every year for living expenses. I'd offer that those who have spent a career in the investment sector (brokers, market makers, floor traders, etc.) would be among the few who could readily do this - not the Average Joe.

OTOH, it is reasonable to expect that once you have sufficient assets and years of experience, you can augment your income with some day or swing trading. In most years, you're not going to beat the market, let alone come close matching it. But that's not the goal.

Keep your day job, save and invest. Take care of your future. At the same time, become financially literate. At some point down the road, take an amount of money that you can afford to lose and focus on disciplined risk management. AI isn't your enemy. You are. See if you can trade for a year and not lose it. Achieve that and you could quite possibly be on the way to earning some supplemental income.

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In order to be a successful trader you need to have great research skills. Can you read cash flow statements and other financial statements? Do you know how to look out for all the warning signs on these statements? How to calculate financial ratios? You need to thoroughly understand the companies you're picking so you can try to time when to buy and sell stocks.

Read a lot of blogs and web articles written by research and equity analysts. Everyone has their own style, so read widely and follow analysts who have a strategy that resonates with you. Note down their predictions and see if they're right months later (no one is right all the time, but you might not want to learn off an analyst who is wrong all the time either).

Just remember that you're up against some large firms who have all the latest tech and employees with fancy masters degrees. Even some of the really big firms with all the bells and whistles have fallen spectacularly. It's a risky game.

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    What you have described is fundamental analysis which pertains to investing. It is not relevant to day trading (the OP's question). – Bob Baerker Feb 27 at 1:19
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    Are you suggesting day trading involves no analysis? That's literally just gambling then. I disagree with you. – Only_me Feb 27 at 1:46
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    22 - I'm suggesting exactly what I wrote: "What you have described is fundamental analysis which pertains to investing. It is not relevant to day trading." Day trading involves price momentum (technical analysis), news of the day (earnings, economic, company related, clinical trials etc.). It can be directional, reversion to the mean, volatility trading, pairs trading, ad nauseum. If you have done any day trading, you'd know this. – Bob Baerker Feb 27 at 2:18
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    Note that @BobBaerker isn't saying your advice is bad, merely that it is not relevant to the OP's question. For example, you refer to reading financial statements. Those are normally published quarterly or yearly. This question is about day trading. Financial statements are irrelevant for day trading. Ditto for analysts. By the way, I absolutely would "want to learn off an analyst who is wrong all the time" (obligatory xkcd). – JBentley Feb 27 at 3:17
  • Following up on the deleted comment about what day trading is, some stocks related to the coronavirus (testing, vaccines, safety supplies) have doubled, tripled and quadrupled in price this week. While they tend to be small companies, not all are. This is what day traders do. They see the news and get on for some of the ride. Many if not most of these stocks will collapse in price if/when the virus is contained and the day traders will wash/rinse, repeat but at that time, from the short side. – Bob Baerker Feb 27 at 16:55
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Investors who profit from trading second-by-second or even minute-by-minute are likely market-makers who buy at the Bid and sell at the Ask. Mostly this is just order filling and response to Depth-of-Market.

Investors who trade longer time periods, within the day, often look for certain points to be made or not made in press releases. Also, they follow correlations. Of course there is trading by technical analysis. And there are news surprises.

Currency traders, for instance, follow calendars and press releases of scheduled economic reports. And there are correlations to stock markets, to commodities, and to country specific news. Of course there is trading by technical analysis of order flow.

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