2 years in the game... is it time to hang up my boots?

[safvan]

So you've just disagreed with the basic laws of supply and demand.

Disagreements over our perceptions about something is what creates support and resistances in real and our trading lives.

What I try to do is to look for instruments that have least disagreements and the most agreements and ride it till people start to disagree and create uncertainty.

I am not a scientist or a genius. I want to make my trading life least complicated hence I look for instruments where people agree more and disagree less.

Peace.

 

[SanMiguel]

Disagreements over our perceptions about something is what creates support and resistances in real and our trading lives.

What I try to do is to look for instruments that have least disagreements and the most agreements and ride it till people start to disagree and create uncertainty.

I am not a scientist or a genius. I want to make my trading life least complicated hence I look for instruments where people agree more and disagree less.

Peace.

I agree with you that more people should trade the trend but to say day traders can't make money because of computers is a bit far fetched. On the most part the HFTs are simply there for liquidity and to scalp. I agree scalpers can no longer compete but there is more to day trading then just scalping.

 

[safvan]

I agree with you that more people should trade the trend but to say day traders can't make money because of computers is a bit far fetched. On the most part the HFTs are simply there for liquidity and to scalp. I agree scalpers can no longer compete but there is more to day trading then just scalping.

No worries.

 

[safvan]

Though I am strictly anti day trading it can be profitable only when the opportunity exists which is defined only into instruments that show all time highs or all time lows relative to the main market.

To support the comments by poster SanMiguel let me post a youtube link to a video that basically describes the real essence of money making in the markets. This video is by Joe Fahmmy who trained under Mark Minervini , a market wizard featured in Jack Schwager’s Stock Market Wizards.

Please watch it again and again (at least 3 times) as it would give you an insight as to how money is actually made by a few in the markets while 90% of us barely break even.

Peace.

 

[SanMiguel]

Though I am strictly anti day trading it can be profitable only when the opportunity exists which is defined only into instruments that show all time highs or all time lows relative to the main market.

No, I'm afraid that is not the only definition.
Actually, FWIW, buying all time highs has inherent risks as well but yes if a stock shows strength compared to the market the something is going well. However, why as a day trader could I not pick a trend and just keep buying at retracement points? Nothing wrong with that and it's still day trading.
Who's to say you won;t buy your strong stock, hold onto it for months, and then it drops and you get sopped out for a loss or break even - it's just a time factor. Day/swing trading has nothing to do with the problems people encounter.

 

[meanreversion]

Just out of interest, does anyone here who either day trades or has day traded, do so in a purely mechanical and systematic fashion (with automation as well)?

 

[forker]

2 years is is still junior school...

 

[SanMiguel]

Just out of interest, does anyone here who either day trades or has day traded, do so in a purely mechanical and systematic fashion (with automation as well)?

I have used automation to manage trades in the past but this was only as a better form of a trailing stop rather than picking an arbitrary "I will trail by x pips".
I do not trade mechanically and I would actually say sometimes suffer by missing trades I would have taken due to listening to news reports too much but I think you have to have a good dose of market knowledge, good psychological understanding of yourself, etc. I miss trades all the time, I just accept that as part of it. Mechanical systems do not work forever, that's the problem, trading in its essence is not a mechanical / rigid system.
Most of the day trading super systems are designed to scalp buy and offload to someone else or front run orders, they're not designed to buy when the RSI is less than 30 and we're in an uptrend and the 5min chart has a bullish crossover and and and. Why bother with all that when they can scalp buying and selling all day long + get rebates from the exchanges.

 

[safvan]

2 years is is still junior school...

I would fundamentally agree but technically disagree.

It all depends upon the correct education and then a persons own ability to adapt to what ever suits him or her.

Markets in the same way over and over again which means a lot of people repeat the same mistakes and take the same correct decisions over and over again.

To add to the situation posted by the original poster, I must say that you entered the markets when the bull markets started to end and have managed to remain break even or slightly better to date. This is very good indeed. Whether you keep in this business is up to you but very few do.

Newbies entering these markets in late 2007 up to around mid 2009 must have gotten very frustrated very soon.

Trading is a boring game but lucrative because even bull markets only offer two to three times a year where you can make money.

Peace.

 

[SanMiguel]

Trading is a boring game but lucrative because even bull markets only offer two to three times a year where you can make money.

???

 

[safvan]

Trading is a boring game. It can be very lucrative however even bull markets only offer two to three times a year where you can make money. Good and consistent returns cannot be made in any market all the time. You have to enter the market when the trend says so and wait and wait and then leave if the trend or attitude of the instrument tells you to do so. Only this way you can make positive returns in a raging bull market.

Some people might argue that there is nothing special in making money in bull markets. Anyone can buy and hold and then ride the trend. Its not true. A lot of people lose money even in bull markets because they do not know which instrument to put their money in. A good money manager is some one who can produce 20 times better result than the main bull market when things are going up. If market goes up 20% in a year and your portfolio goes up only 60%, that is not stellar performance. You should be able to perform 10 times better to be called a good money manager.

For example mid 2009 to current date this is how I entered and left the market. When I say I *entered* I mean I bought into a stock that was showing strength during the down days. When I say I *left* I mean I sold ALL my shares and went 100% cash and then waited on the side lines.

1. 9th April 2009 to 8 July 2009.
2. 30th July 2009 to 5th Feb 2010
3. 8th March 2010 to 5th May 2010 (avoided flash crash because I followed the rules)
4. 3rd August 2010 to 12th August 2010 (The upward trend failed to resume)
5. 27th September 2010 to 11th march 2011.

I will re enter the market now when the trend is resumed. As you can see even in a good bull market I was in it on selective time periods. So I enter and exit my strong stocks only when the main market is healthy.

So far my results have been extremely green. The only reason I was able to do this was because I stayed away from smart people that know everything about everything and only did what the most traders do in STRONG markets.

I have no plans to enter down markets or short it. The unemployment I gain from not being in the markets when things are bad is much better than being in it and paying the price of the stupidness every week.


Peace.

 

[SanMiguel]

For example mid 2009 to current date this is how I entered and left the market. When I say I *entered* I mean I bought into a stock that was showing strength during the down days. When I say I *left* I mean I sold ALL my shares and went 100% cash and then waited on the side lines.

1. 9th April 2009 to 8 July 2009.
2. 30th July 2009 to 5th Feb 2010
3. 8th March 2010 to 5th May 2010 (avoided flash crash because I followed the rules)
4. 3rd August 2010 to 12th August 2010 (The upward trend failed to resume)
5. 27th September 2010 to 11th march 2011.



Peace.

Apple or ARM?

 

[tdrtw]

>>Just out of interest, does anyone here who either day trades or has day traded, do so in a purely mechanical and systematic fashion (with automation as well)?

I day trade Futures using complete automated systems which I designed and progammed myself.

 

[safvan]

Apple or ARM?

Neither. I have not put any money into apple or arm ever. Nothing against any of them but my rules and criteria do not allow it.

Anyways what I wanted to say regarding the stock market is that we should really look at them wanna be and established celebrities say a movie star or a singer.

Many try every year to make it in Hollywood. A lot of them do end up getting small odd roles here and there however there are just a handful that end up getting cast in main movies or end up getting big record labels. What happens then? Everyone on the planet wants their piece of the action. They are taken from nothing to the heights of super stardom in no time. They have everything they can wish for. Many *other* people get rich because of them as they result in bringing them more business.

However in the end people start getting bored of the same face or music and someone else jumps into the scene and then the crowd starts following them instead. The once upon a time star loses his or her grip and eventually fades into a life of obscurity.

Some do end up having long runs but most of them are forgotten and done with. On the average a celebrity has a shelf life of around 2 years or so before the next big thing. Nowadays its hard a year!

Great companies and their stocks act EXACTLY like that. If the product or service is good which is shown by their revenue, income and chart price action, EVERYONE wants to get in and get their piece of action and this is what brings in new highs.

Newer companies with great dreams and results tend to make fastest runs towards the sky before they fall down. This is why you see so many stocks doing very well only few times before investors get bored and pull out their money to put into the next big thing.

Our job is to make a list of companies that are performing extremely well and then ride it till the NEXT big thing and then take the money out and invest in that. This is what creates boom and doom if add in everything on a larger scale.

So on the average there are anywhere from 1 to 3 years where you can actually make good money from a company stock before people start getting disinterested. Just like show biz there is no shortage of new faces and new heroes are born every day to replace the old ones.

As traders we just need to side with the ones that are IN and HOT and wait for them start dieing and before that happens, get out and invest in the next HOT item when the time is ripe.

Very few money managers teach this to their young and hence we have messed up versions of interpreting everything or making life so complicated.

Peace

 

[SanMiguel]

Neither. I have not put any money into apple or arm ever. Nothing against any of them but my rules and criteria do not allow it.

I guess they don't satisfy the rules of:
"defined only into instruments that show all time highs or all time lows relative to the main market. "

 

[safvan]

I guess they don't satisfy the rules of:
"defined only into instruments that show all time highs or all time lows relative to the main market. "

Apple satisfies that rule big time however ARM does not. All time highs are the main factors of getting into a stock. It takes up a lions share of the decision. Apple just does not satisfy my own personal trading rules for example I look for newer issues and certain cost factors and there are a few more. Having said that it IS an excellent stock and has been since (I am talking say last 5 years or so)

APPL I would bought from November 2006 onwards to about nearing the market crash and then late 2009 to date.

ARM on the other hand I would have put money into only from Feb 1996 to around March 1996. There were other opportunities to buy into it but I would have sidelined because the main market in 1996 pretty much remained dead for the whole year AND the stock behaved badly compared to the main. The mid 1996 was not really the time period to buy till about September. YUP nearly the whole summer of no trading. Tell that to the top money managers and day traders!

I must also say that what ever I have posted is what I believe and trade with. Everyone has their own methods and mistakes and errors in those methods is what creates wealth for others.

Peace.

 

[Pat494]

Neither. I have not put any money into apple or arm ever. Nothing against any of them but my rules and criteria do not allow it.

Anyways what I wanted to say regarding the stock market is that we should really look at them wanna be and established celebrities say a movie star or a singer.

Many try every year to make it in Hollywood. A lot of them do end up getting small odd roles here and there however there are just a handful that end up getting cast in main movies or end up getting big record labels. What happens then? Everyone on the planet wants their piece of the action. They are taken from nothing to the heights of super stardom in no time. They have everything they can wish for. Many *other* people get rich because of them as they result in bringing them more business.

However in the end people start getting bored of the same face or music and someone else jumps into the scene and then the crowd starts following them instead. The once upon a time star loses his or her grip and eventually fades into a life of obscurity.

Some do end up having long runs but most of them are forgotten and done with. On the average a celebrity has a shelf life of around 2 years or so before the next big thing. Nowadays its hard a year!

Great companies and their stocks act EXACTLY like that. If the product or service is good which is shown by their revenue, income and chart price action, EVERYONE wants to get in and get their piece of action and this is what brings in new highs.

Newer companies with great dreams and results tend to make fastest runs towards the sky before they fall down. This is why you see so many stocks doing very well only few times before investors get bored and pull out their money to put into the next big thing.

Our job is to make a list of companies that are performing extremely well and then ride it till the NEXT big thing and then take the money out and invest in that. This is what creates boom and doom if add in everything on a larger scale.

So on the average there are anywhere from 1 to 3 years where you can actually make good money from a company stock before people start getting disinterested. Just like show biz there is no shortage of new faces and new heroes are born every day to replace the old ones.

As traders we just need to side with the ones that are IN and HOT and wait for them start dieing and before that happens, get out and invest in the next HOT item when the time is ripe.

Very few money managers teach this to their young and hence we have messed up versions of interpreting everything or making life so complicated.

Peace

Call me cynical if you like, but to my mind that has already been defined as " pump and dump ". If you have the resources of Goldman's you can do it yourself but for 99.9% it's follow the big boys and anticipate their dump.

 

[safvan]

Call me cynical if you like, but to my mind that has already been defined as " pump and dump ". If you have the resources of Goldman's you can do it yourself but for 99.9% it's follow the big boys and anticipate their dump.

I think my usage of words hot and in probably put that phrase into your mind. I do not mean penny or hyped up issues. I only meant to put your money into fast growing, fundamentally promising companies while they are shooting up in their technical price action backed by their sales and income growth.You then just enjoy the ride. This is basic principle of sound investing. You do not put your money in dying companies.

 

[Pat494]

. You do not put your money in dying companies.

Exactly so

Interesting to see how long Goldmans for instance keep their Facebook shares, but unless they have lost their touch, they will exit with a handsome profit.

Berkshire Hathaway's venture into old U.S. railroads could mean Old Buffett is over the hill tho unless .........?

 

[safvan]

Exactly so

Interesting to see how long Goldmans for instance keep their Facebook shares, but unless they have lost their touch, they will exit with a handsome profit.

Berkshire Hathaway's venture into old U.S. railroads could mean Old Buffett is over the hill tho unless .........?

Life is a b*tch. Nothing lasts forever. Even strong personal relationships turn sour over time. These are just commercial enterprises with humans in the background. All stories eventually have an end.

Our questioning of methods generally would lead no where until we have the power to change things. America was built on capitalism. Now the whole world is structured around it. In capitalism only the best survive until the new best thing arrives. We suck them dry and then leave them to rot.

Since we cannot change things, its best to join the crowd making the most out of everything. Thats called learning to survive in a capitalistic jungle.

And to answer your original question, Goldman is buying to sell to folks that would want to buy. Its all a big big game and thats how big players make big big money and small ones end up paying their debts for the rest of their lives. Its called modern slavery.