Hi Andy, Are you still experiencing returns on capital of about 10% - 15% per month, or has it declinced in this volatile market? thanks, Walt
Hi Walt, the return always depend on the risk you are willing to take on each trade The result was about 20 R (20 times the risk) in 2008. The last few month have been difficult and I reduced my trading a lot, avoiding inter-market spreads and outright trades. Merry Christmas to all of you and a happy 2009 !!! Andy
Happy New Year Andy... I trust that you had a good holiday. I wanted to wait until after the holiday season to send you a post. When you said that "the result was about 20 R (20 times the risk) in 2008", does this mean that if you were risking $10k per month, then the profit would have been about $200k for the year? That's awesome... congratulations (unless I missunderstood the information). BTW, do you think I should focus on trending with the spreads are focus on mean-reversion? Your feedback is most appreciated. I think I may need to sign-up with your mentoring service afterall!! Thanks, Walt
Happy New Year Walt! 20 R means, if you are willing to risk about $2,000 on each trade, you would have made around $40k. That's almost the same you are saying, just based on a single trade and not based on how much you are risking per month. I am trading both, trends and also possible bottoms or tops (only when there are signs for a reversal of the trend or a spread in a sideways market). Whenever you need any help regarding spreads, just send me an email at andy@jordan-trading.com Take care and happy trading, Andy
Traders Question: "Andy, in one of the Spread Scan issues I read that spread traders have a much higher success rate than do day traders. How come? Any explanation why?" Answer: "Even if I do not want to generalize the following for each trader, there are some "general problems" in day trading. Here is a short list of why I personally think day trading is much more difficult than position or spread trading. - Fast decisions: You have to make very fast decisions when you day trade, especially when you day trade very short time frames like 5-, 3-, or 1-minute charts. When you position trade you have much more time to think about the next step. Day traders too often don't have a precise trading plan and trade on "gut feeling". - Trading for revenge: Very often you just want to "make back" your losses. This happens both in day and in position trading, but in position trading you have more time to calm down. Day traders very often take trades only for revenge, and lose even more. - Picking only the best trades: It is very difficult to sit in front of a screen following the markets all day long, and not to trade before the market is ready. It is not very difficult to make a few ticks in the markets by scalping. Picking up a few hundred dollars with a ten contract lot is not a big deal, BUT it is very difficult to wait for the right moment! I can only talk about my own experience, but whenever I compare my day trading with my position (spread) trading results, I can see more money comes with the longer term trades."
Electronic Spread Trading Markets have changed quite dramatically in the last 12 months. Almost all markets are now trading at an electronic exchange such as Globex. In todayâs short article I do not want to talk about the changes regarding the trade management; I want to focus on the changes regarding order execution, and what broker or trading platform to use. When you ask me what broker you should use, I still recommend going with a âreal person.â Even if you place all your orders online using a trading platform, it is important that you can talk to someone the moment you arenât sure about what you are doing. Yes, you will pay a few dollars more on commission, but does it really matter? It is more important to have a helping hand when you need it. I would even go one step further and tell you to let your broker do the work for you, to get you in or out of your trades. Why should you hang in front of your computer all day long if your broker can do it for you? I have been with our broker for over 6 years now, and even when I place my orders by myself I can call him or send him an email whenever I need his help.