Now that I’ve got your attention lol…. I say IF I was a trader, because I’ve got so much to learn before I can call myself one. anyway, I’ve managed thru this clown show called 2022 pretty well. Keep in mind I’ve always been a long term investor and have tended to “buy and hold”. Now that im retired from advisory, I’ve been able to be more active, and about 3 months ago I sold a bunch, including about $450k in S&P 500 ETFS. M”strategic allocation for my long term (IRA) money is 65% equity. I’ve been around 35%. And year to date, im down 6.8%, so im happy. BUT WHEN IT COMES TO TRADING, I have this big problem called lack of patience and discipline. I think it stems fro FOMO. Yesterday, I was really liking the strength the market was showing and reversal near the close. So at 3:55PM I put $120k into SPY and 50K into QQQ. I also sold my 2x inverse fund QID, which I’ve owned for a few weeks. Thinking we are close to washed out , due for a bounce and the late day reversal up made me think it might be coming next week. WTF is wrong with me? Discipline is so hard to develop. I shouldn’t be trying to play a bounce in this market. Hopefully I get lucky and get out on Monday with a gain. I’m not even putting this in my trade journal, because it’s not really a trade. It’s a dumbass move on a hunch. F me. Rant over. Thanks for letting me get it out of my system
Easy, I didn’t trade often. I was a CFP, and after planning, did mostly asset allocation, using index ETFs. When I bought individual stocks, it was mostly large cap dividend payers/growers that I bought and held. I sometimes reacted to market gyrations, but not often, and I trained my clients to think that way
Was it a big institution that you was working for ? Advisory firm ? Say a client wants to put away $50 000, were you trying to time the individual picks or the funds were invested in the matter of days among the ETFs ? Would that be a common practice in this niche ?
I was independent, cleared thru Raymond James, and was IAR under their RIA. Generally tried to avoid taking accounts under $250k. But when I did, I either used one of the B/D cookie cutter models, or if I managed it myself with discretion I DCA the assets over 6 months or so. No timing. And yes it’s a pretty common way to operate. financial Advisors get paid on assets under management (unless you are fee onky in the truest sense of the word) and need to create economies of scale, so they spend more time marketing and less time running money. Sad but true. so now you understand (I think) why after ab20 year career as an advisor, I consider myself a newbie at trading, and TA.
If you're not a trader then the best to do is hedge your equity with futures, leveraged ETFs or just DOTM (deep out of the money) puts on the index you are long. Futures is the best since it is almost 1:1 hedging with your equity. If you use -2(3)x ETFs you probably have to adjust the hedge since you may end up being net short. I personally like the OTM puts on SPY but with such a high VIX you're leverage is very limited unless you use the weeklies but those decay exponentially. I've been hedged since January 20 since that is when the SPY broke below the 100-day moving average (SMA). I just roll 10% OTM SPY monthly puts. I'm down about 4-5% in that IRA.
Picking no less than $250K, no timing, dropping into ETFs and lasting for 20 years. Where do i enlist ? (laughs) ************************************************************************ Thanks for being open.
Relax. Discipline is the ability to follow the plan. Do you have a detailed plan? If not then how can you expect to have discipline?
Everyone has an opinion or a niche when it comes to trading. So here's mine: Trade volatility and don't attempt to compete with institutions. That leaves you with small companies jumping in the premarket hours on news. Trade patterns on the way up. Get out. Repeat the next morning. This is a full time income for me. Some people trade futures, SPY, large caps, etc. and I don't know how they do it. There is way too much smart money that you are competing with on that stuff.