Hi Gary, I'm an original reader of your first published book, enjoyed your second one as well on Junk Bond Trading. I myself trade credit spreads exclusively for the exact same reasoning as your bond funds. As we all know, over the long term the only options traders that make $ are option sellers, not buyers or premium. That's the beauty of credit spread trading. I am consistently earning income 1.5 - 2% of trading capital per month, each and every month (capital at $400k). It takes little research, little analysis and minimal trade "babysitting."
Thanks albeit most would not consider me a long term investor. In the 90s I was trading nearly everyday either adding or decreasing my positions. Even today, I use a tight mental stop so as not to have much more than a 1% drawdown in total equity (bond funds are plodders) I guess you could simply call me a retired trader/investor who is still trying to compound my account. But now I am more concerned with capital preservation and actual dollar returns than percentage returns. I think my compounded annualized % returns since December 2008 has only been in the mid to high teens with a high of 41% in 2009 and a low of 7% in 2011. But more than enough money for me in retirement. 2014 was a good year in the high teens and a profit of $251,666 (both accounts) and thanks to junk muni funds. This year is shaping up to be less as only ahead around 4% YTD in junk coporates.
Could you tell us how you calculated yuor sharp ratio as daytrader? Till now I never found how daytraders should calculate this. The only thing I found is that the calculation is different from NON daytraders. I made some calculations, but the result is that I break all existing records. I mean in profits, not in losses! So there is definitely something wrong in my spreadsheet.
That quote is quite negative and will naturally receive a lot of argument, but it's not far off the truth. You'd first have to define "modest means" though because if you mean 10,000$ then of course there's no way you could skim profits off such a tiny amount. If "modest" means 100,000, or 200,000 then that would be possible in very rare situations. You'd need one hell of a fast start out of the gates, but it's not impossible if you have a couple monster years early on. But I will submit, you'll hear thousands of stories of people who claim they started with modest means, day traded with no other income, and now they've made it. The real quote should be: "Show me one person with an independently audited track record that started with modest means with no other income and made it." That would be very very rare indeed. Liars are a dime a dozen in this biz. Oh I make 50% a year blah blah blah. Yeah? PROVE IT ! There's the rub
Congrats. I've still got "How I Trade for a Living" on my bookshelf. It is one of a handful of trading books that resonated with me back in the day. I started off small, got lucky with the internet boom, and have been successful ever since. My trading strategies have changed multiple times over the years. The majority of my income (~99%) comes from trading. As for marketsurfer, his life philosophy is particularly grating to me. I view money simply as freedom.
Are you a successful at home day trader with no other source of income ? This is what most ppl start out trying to achieve, but through a lack of education and lack of backtesting never get to see the light of day. Essentially putting the cart before the horse. The why is easy ..... they are focusing on the money and not the process required. About me : basically a fulltime futures trader focusing on no more than 3 instruments. Scalping to short swing trading. Basically means I do have a part time contracting job 2-3 times per month. I trade from home and I believe it can be done because I have progressed from losing to not losing money with occasional nice wins. I consider this a big improvement. What I've come to realize is that when your familiar opportunities that show the most promise come around you need to step up to the the plate and increase size. The other thing that has helped keep me in the game is scaling out of losers quicker and scaling into winners. Fully understanding support and resistance the most basic law in T/A has also been right more times than wrong. Attached are my MAY 2015 trading results. June is upon us I hope what I've learned in May will assist in a better June trading. I am not making any claim to be good or otherwise I'm just someone that lives and breathes the markets and to get better every day. "0.00 days were no trading days"
This right here folks! The rest of your comments I also agree with. There's no single point of realization but the more one spends doing it the more they understand at a more innate level how simple the markets actually are. They're not 1+1 simple, but aside from occasional "wtf was that?" moments they basically decay down to knowing when to buy support and sell resistance while also understanding the larger context and what the present trap (if any) is at that moment. Myself I prefer to scale in on entry if it moves against me initially. I prefer to get into the trade on a smaller size just to be in the trade in case it just takes off without a retrace but if there is a retrace I'll use that opportunity to increase size with less of the added risk. So what happened on the 20th?