Food for thought

Discussion in 'Trading' started by Lucias, Mar 17, 2011.

  1. Lucias


    If you bought the exact low 666 and sold the exact high (within a point) and traded 1 ES mini contract then today you would have made:


    That's not very much! That is from 2009 to today.

    Also, I have captured almost as much dollar gain in my hypothetical swing trading account.
  2. 1) If you include "12 times" leverage, it's a lot more. :)
    2) If you compare it to a $500 daytrading margin, it's even higher. :eek:
    3) Food for thought? can buy a hypothetical steak dinner with your profit. :(
  3. jax88


    What's the point of this? That you can do simple math? Here's a cookie. Next time show us your tits so it won't feel like a total waste of time reading this crap.
  4. Lucias


    There is a point to this. Many people want to make a million in the market or win by taking big swings. I don't claim to know how difficult that is to do or that it isn't the right way. However, this thought experiment demonstrates that if one were to capture this rally perfectly that they wouldn't have even made enough to live on provided trading 1 es contract.

    We know that nobody is perfect. Moreover, we also know that to even attempt this with 1 contract would be foolish with anything less then 15k to 30k and more likely one would need more -- given the long holding period.

    Assuming one started with 15k then that means they returned something around 55% per year which is phenomenal.

    I mean I don't know what this demonstrates. But, it says a few things to me:

    1. To get rich trading is going to be darn hard.
    2. To make even a decent living trading is likely to require vast amounts of capital.
    3. The gurus who try to call big moves and tend to be about 30% accurate aren't making any real money.
    4. There isn't enough money in picking off big moves to get rich fast even if one is perfect and highly leveraged.
  5. Your supposed to trade the gyrations , this isn't buy and hold. The gyrations offer many points day in day out. There is a difference between trading and holding.
  6. today there were 702 points available in the gyrations on the /ym. Gyration defined as a swing up and down move of more than 20 points.

    That is 3500 dollars available today in the ym per contract . Capture 20% of the available points a day and you're on your way. The market is a facility.
  7. Butterball


    What makes you think that? Those profits in those big moves could well off-set the 70% losing trades, leaving a tidy profit.

  8. :D

    I didn't invent the hypothetical situation, but let's just suppose for a second that I did..:cool:
  9. Why do you think that . ES initial margin at IB is about $5,800. I will assume you start with 10K just to make sure you can absorb an initial drawdown. That is a return of 230% in two years.

    That's not vey much? Either 115% per year isn't enough for you or you don't know simple arithmetic.:)

    Also, I have to point out to you that there is a huge gap in difficulty between buy & hold and achieving equivalent returns through swing trading.