There is thread on Elite Trader called Taking 410K to 4million by Year End 2010 . The trader is down 44% this year, even though his performances were outstanding for 2007, 2008, and 2009. If you look at his past posts, he made a lot of money in those years. I don't know his exact strategy, but it seems to be a mean reversion type of strategy, shorting overbought stocks and going long oversold stocks. Do I think he just got lucky in 2007-2009 with his trading? I don't think you can get those kind of returns by pure luck. He seems to be a skillful trader, but through a combination of trendy markets and a bit of emotional weakness, he ended up with a big drawdown.
I bring it up because this can happen to anybody. I myself am having a negative year, but I don't think I've suddenly lost the ability to trade. Part of it is the market, and part of it was just getting impatient and overtrading, trying to make back my losses.
Let's not forget that the market will always be around. There is no need to rush. When the right market comes, I want to be there with ample capital to make as much money as I can when the sun is shining. Because I know I'll need to have a surplus for the money droughts that await.
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I don't trade a book as big as yours but and if i did i would have to trade different stocks. i'm up 30% so far this year and 220% since end of june till now. I think I can do around 40 to 50 % in the worst markets and 100% plus in a decent market. yeah last year was great but i think the next few years are going to be good trading markets
also trading the futures is imo practically 50% most of the time . but there are times like fed days where the probabilities are almost a sure thing. i always do worse when i trade edz vs individual stocks. mkt timing is tough
also a lots of stock traders actually most of them buy breakouts. a lot of people who employ this tactic are down big chasing momentum this year because breakouts aren't really following through
i saw the thread seems like he just trades options. i don't really understand how options trade. i mean if they trade off the stock and you're just getting long or short the put and call why do this besides utilizing the leverage. it seems riskier using the leverage and if the stock trades against you you'll blow up. i bet if you write puts in a bull mkt or sell calls in a bear you can multiply your money many fold.
Let me say this: nobody can be right 100%of the time. It is about having enough money to play again in the future.
But, OWL, you made a couple of good calls earlier this year. Then you seemed to get cocky with your calls, in my opinion. You were 100% sure we were going down big time. You didnt want to hear anyone elses view.
I posted last Friday(when you said the market is going down big time this past week),I said the bears would get crushed. I'm always objective with my views. Even when I'm invested one way or the other.
You see only what you want to see.
Also, to Anon. If you actually believe you can always make the kind of returns you claim. One day you will be broke.
you're right anon i can't treat the mkt like an atm machine. which is why my plan is to make as much as i can and buy low maintenance income generating property or business. if you look at the history of markets because of black swans and six sigma events everyone is doomed to blow up sooner or later. rarely has anyone been consistently sizably profitable year after year their entire trading career. thats why its sound to get it while its good and then take the money and run. mkt has been good lately
when you're trading you can't be dogmatic. you have to realize that you can be wrong always. and you can never think you're as good as the last trade you made if it was good. never have an opinion on the mkt and doggedly stick to it. and you have to be more than a one trick pony way more
this all being said the owl is living the dream because of his trading regardless of how he did last week. he has seen it all too because no other market has seen the volatility we seen from dot com to dot bomb to real estate bubble to financial meltdown.
I have a simpler explanation. There are fewer fish in the market and the remaining sharks have become more vicious and clever, and control much more of the market. What has worked in the past is no longer working as many people with negative returns can testify. As you mentioned previously the market makers are much more complacent now as they can more easily control the direction of the market.
I agree, there are fewer fish in the stock market. A lot of the dumb money has been sucked out, and it is pretty much smart money versus less smart money. The general public is fed up with the stock market and see it as a big casino rigged against them with Goldman Sachs and the rest taking their cut at every turn.
The market will get better, but its a pretty tough market right now to daytrade as far as S&P futures go.
Would hate to be long when the smart hands get spooked
Sunday 2/21 9pm. Futures are not looking good for the bears. Again, they're a bunch of no shows overseas.
I never put much weight in the futures as an indication of the days market direction. They are easily influenced and often wrong.
Actually statistically, the futures are a good indicator of what the day's trading will be.
Statistically, except for moderate to big gap downs, the market cannot be gamed regularly by the gaps.
http://framingtheday.wordpress.com/2009/11/22/overnight-follow-through/
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