buy one futures contract every 3 months for 10 years? (long term futures)

Discussion in 'Trading' started by 1a2b3cppp, Mar 31, 2011.

  1. I tend to like most of what this guy says, such as his logic for why all trading systems are BS and if anyone had a profitable one they wouldn't sell it, why brokers want you to trade frequently, etc.

    Then you can read on and see how he made $100,000 in the first year and then got greedy and messed up.

    But my only concern is, what if you buy your one contract and then there's a ton of drawdown. You'd potentially need a big account just to survive the drawdown of one contract. A $10,000 account, for example, could only survive around a 200 point drop in the ES. Good luck picking a long term entry that won't retrace 200 points at some point.


    Also, lol @ this:

  2. luisHK


    Interesting, any more input on buy and hold strategies with futures rathers than the corresponding ETfs ?

    Does on get the same returns as with the ETF long term , and how does the dividend get accounted for ? (it's an issue for me as I get taxed on dividends but not capital gains) and how does it work out with leverage ?
  3. If market is at 700, cushion need 700. If at 1300, cushion need 1300 This coukld work. But it wont be as good as u think because of rollover
  4. You could also roll calls - gets rid of the downside.
  5. Butterball


    If the author is looking at price indices? What he ought to be looking at are total returns, adjusted for inflation.

    1. US stocks, adjusted for dividends and inflation, took less than 10 years to recoup the losses since the 1929 peak.
    2. "have almost always risen over a 5 year period" = famous last words. Japanese stocks, adjusted for dividends and inflation, over the last 26 years (1985-2011) show a net return of 0.00%.
  6. r-in


    Sounds good, but the reality is very few, and close to know one has the diversification to replicate the market, and in '29 for the most part if you owned a basket of stocks it was much longer than 10 years to make back your money. In the past 20 years we have had at least 3 market kills, and for the most part it set back your retirement quite a few years. My wifes 403B is just now back above its high and it has been 4 years. This includes her contributions, and her employers, so actual growth is minimal. She has been fortunate her employer has contributed through tough times, and she isn't a public employee. Most people have not only lost on their retirement plans, but have also lost their jobs. As far as relying on Social Security you would have to be nuts and quite a few of people on it now have it as a bonus to what they have from an employer.