Turok, nice trading yesterday! if you don't mind a ques from the classless goader ... i'm curious... ...what mid-caps are you trading? ...are you swingtrading or intradday? thanks & continued good trading tradeRX
>Turok, >nice trading yesterday! Thanks >if you don't mind a ques from the >classless goader ... Not a problem...been there done that. >what mid-caps are you trading? I thought about that statement later and realized that I've also got some larger caps and a couple smaller ones in my bastket. Here's what I trade in entirety. AMAT BRCD BRCM CHKP CIEN GSPN* IDPH JNPR ONIS PMCS VRSN VRTS *New to basket...just watching >are you swingtrading or intradday? I have never held a position overnight yet. My best trades are from a 13m chart although during choppy periods (like the first three days of this week)I will reduce my time frame and approach something closer to scalping. Until fairly recently I was only a scalper (thousands of trades per month on AMAT). I was profitable (and so was my broker) but have learned that there is a much less intense and more profitable way to spend my days. >thanks & continued good trading Same to you. JB
Very nervous day and I again struggled off the open, unable to hit the early lay-ups and couldn't shake off the effect of yesterday's blown out. Fortunately the bottompick plays in small potato stocks saved my day as I avoided back-to-back down days. That said, with two games left in the month, it looks like I will have no chance to match first half's performance, I am up $2100 second half versus $4700 first half, hopefully I can play two solid games and I will be very very happy with a $8K month in July. One encouraging sign is the vastly improved shooting percentage, while there were very few moves worth playing and I got out too fast on one or two trades, I had a much better shot selection today with more patience on every shot. 9000 shares on 8 of 13 shooting, +542 before commissions, +183 after, 2 bullets, not the type of game that will make me rich, but the type of game I need after a blown out. Pre-Market: RJR beat earnings, a lot of mixed news, this is what I hate about news nowadays, a lot of mix-ups, no clear moves. 9:30: Thought MO would go up on RJR strength, it did but all of a sudden a quarter million shares was sold and knocked out all buyers. For the stock defended 44 and I had a hope that it would absorb the fund selling but it didn't, got out for a 16 cents loss. Took BRL on BTK/DRG strength, MU on SOX strength, STT on BKX strength, got out of MU for a 10 cents profit as SOX/futures came back in, out of BRL and STT for 10 cents a piece and missed huge moves in those, sometimes it is almost better to ignore the futures unless you are trading super sensitive stocks like MU, and just focus on the tape. BRL definitely deserved a re-entry. 9:55: IUX all of a sudden tanked, unlike OSX, this index is heavily weighted toward AIG so stocks don't really move with the index as much as OSX and unfortunately I put up a bullet on MMC and shorted away, got hit for 40 cents on 800 shares, ouch. Bulleted VTS for half a point profit on OSX sell-off but this stock didn't trade much volume today so I couldn't go size in him. 10:30: A carbon copy trade like DST from yesterday, FIC got destroyed and I took 100 shares at 56, got half a point could have sold for a 2 point gain had I been more patient, I don't understand how I jumped into DST so fast, very careless trade, VERY. Bottomed fished BBI and got spreaded for 15 cents, unfortunated couldn't get myself filled when the true bottom arrived on size print. 11:08: Missed the entire energy rally, normally I don't trust energy rally mid-day especially on weak volume, in this case however it just ran and ran and ran . . . Only grabbed 20 cents off VTS. Took UTX on CYC/DJI strength, devious specialist, hit me for 15 cents by triggering a new low on the daily chart to shake out all stops and took it higher. This guy is very tough to deal with if you are using tight stops. CEX rally, took FMC for 40 cents. Very light positions overall as I simply didn't like the way market traded today. 1:08: Poorly timed trade on IN as I got 40 cents out of the bottomfish but I did not pyramid correctly. Huge 80K print in this stock gave away the bottom. Very few opportunities rest of the way. 3:00: Took RBK and got 25 cents out of the bottomfish. Tried EXC but got stopped out for nickle loss. When the final bottom arrived I only went 200 shares as there was less than 5 minuts left in the game, got 30 cents. Those slow stocks really provide a good risk/reward ratio and keeps me from bored and churnings due to choppy market conditions. While they won't make me rich, it is worth doing when nothing else is going on as despite of the DST trade I have still made money from bottomfish as a strategy.
Turok: First of all when you are trading someone else's money there are certain rules you have to work with. I have built a capital account at my firm and I can do whatever the hell I want. Had I kept on trading it would have been no problem, the call was for those with negative caps. That said, a lot of times when you are getting blown out you need to stop for your own good, and that is what RM is for. Personally I wish I stopped after that trade, I was on the verge of a total blown out before I came back. I define a trader's success by the amount of money he makes. That's the only way to keep the score, and that's the way it should be. A half a million a year trader is not as good as a one million a year trader, pure and simple. Eventually you will hit the ceiling of being an individual trader and there are only two ways to go, hedge fund manager or trading desk manager. If you are TRULY serious about this business that's where you eventually want to be. If you goal is to make a very very nice living while going freelance then it is an entirely different story. While I can not claim that I will never even be able to touch either one of the two routes above, that is eventually where I want to be, and I believe that's where you want to be if you believe that "sky is the limit". The DST trade, the stock was moving figure to figure before I saw it, I don't how I took a position without looking at the full tape, it was a very bad mistake, and it was a maximum risk/reward type of trade where you can make/lose point(s) within seconds. I may be wrong but if you are trading any mid-cap Nasdaq stock and some news came out it will probably the same story. I have never lost so much money on 300 lousy shares and that's why I was stunned. Rest of the way the market rallied and I was too frozen to take positions. Still I don't think it was a smooth ride up and if you somehow got in very early in anything and held all the way I truly commend your skill. For me once the thing moved, why chase? Too many afternoons had similar moves and turned out to be fake rally and I bought into tops, if you have any tips on recognizing a true move early please let me know. Scalping: For the last time I am NOT a scalper. I do not look for multiple points but I play a single leg as much as possible. In this environment I learned to take quick profit first and ask question later as very few stocks trend consistently (for me), hence my winners are very small but the goal of every trade is to get MORE THAN 20 cents . . . Intraday Swing Trading: Higher reward requires bigger stops, bigger updays on less shares will result in bigger/more downdays. It is not how many points you make in a day, it is how you stack up at the end of the month that counts. I am trading very very conservatively in summer time, when the momentum returns of course I will go for bigger moves. Bullets: Obviously I have not even scratched the surface of bullet trading. Since I have a large variety of sectors to choose from, I always look for long first, short second. Hence I gave up quite a few easy trades. The top tier traders at my firm all overwhelmingly favor the short side and I can assure you just because I don't fully illustrate their power doesn't mean it is not an EXTREME advantage. NYSE Versus Nasdaq: This is a pointless debate. On super momentum days Nasdaq moves more and provides bigger moves, but NYSE overall is more liquid (of course you can't compare something like DST with news versus JNPR). Nasdaq provides bigger moves and bigger stops are needed, NYSE you can go super tight with the stops. For NYSE the tape IS the game and for Nasdaq a lot of people get by just fine with charts. NYSE provides a much larger variety of sectors to trade and overall slower pace for those who likes to trade more than a few positions at a time, Nasdaq is all technology and I think most Nasdaq traders don't do more than a few positions at a time. As many said both mms and specialists are criminals, it comes down to whether you prefer dealing with one at a time or a dozen at a time. In the end, there are people making millions with either one, why even go into this debate?
I will respond first to the last line of Hitman's post: >In the end, there are people making >millions with either one, why even go >into this debate? You get no debate from me...I'm the one saying that to each his own and I REALLY like my way. If your way is right for you EXCELLENT. You're the one saying serious traders see it your way and there is only one measure of a good trader (see next). >I define a trader's success by the amount >of money he makes. That's the only way to >keep the score, and that's the way it should be. >A half a million a year trader is not as good >as a one million a year trader, pure and simple. And here is where your narrow mindedness rears it's ugly head. Your "there's only one way to measure a trader" is a bunch of hogwash. Pick one... Traders: (all from the year 2000) A: Manages $2.4 billion in a whopping fund and produces a return of 1.5% over the year. (that's $360 million) Has an entire army of researchers and traders at his disposal B: Manages a hedge fund worth $15 million and provides a return of 36% over the year. ($5 million, four hundred thousand) She has a staff of two. C: Never has more than $100k in the market at any one time during the year, only goes long (yes, you heard right...only long in 2000), makes 23,000+ trades during that year in only ONE STOCK. Works alone with his eyes glued to the screen and fingers to the board during every minute of every trading day of the year. Pulls $1.7 million out of that one stock for a return of %1,700 D: Manages his own $350,000 trading account. Trades the e-minis 8 months out of the year and only about 4 hours a day and spend the rest of his time surfing and hang gliding. Through a combination of swing and intraday trading returns %84 ($294 thousand). Alone of course. So, who is the best trader? You say "A". Fine. I'll argue that each has selected a different task and each one may be better than the other at that respective chosen task (though I'll argue that my buddy "C" rocks "A"s world when it comes to trading and I'll subjectively argue that my buddy "D" has the best lifestyle of all of them). >...hedge fund manager or trading desk >manager. If you are TRULY serious about >this business that's where you eventually >want to be. "this business" to you obviously means the "hedge fund" business or the "trading desk" business. You're right, I'm NOT TRULY serious about those businesses. I am deadly serious however about the business of trading and you saying that I'm not is a very simply demonstration of your extreme hubris. The field of view on your trading periscope is apparently pretty damn narrow. Throw open the hatch and look around. >and I believe that's where you want to >be if you believe that "sky is the limit". Great Hitman...if you believe that's your sky, AWESOME. I truly hope you can reach that dream and I honestly believe that you can. My "sky is the limit" trading dream is different than yours and yet I don't claim you aren't "serious" simply because we have chose different dreams. >if you have any tips on recognizing >a true move early please let me know. If I had that I would be trader "C". >I am trading very very conservatively in summer >time, when the momentum returns of course I will >go for bigger moves. I think you are doing great man. Keep up the good work. Your passion and discipline shows. I believe you will be a very successful trader. ><bullets>...just because I don't fully >illustrate their power doesn't mean it >is not an EXTREME advantage I'm quite sure they are and offer no argument. I still wouldn't trade your bullets for my fuzzy slippers for love nor money. JB
JB: Thanks for the post, but for me it is the end result that matters and it takes tremendous skill and endurance to manage the size of someone like Trader A. Even if his/her expenses are half of what they made he/her will still end up with more profit in one year than all other 3 traders combined would possibly make in 10 years. For anyone to manage a 2.4 billion portfolio, that's the level of trust they have from others, and that speaks volume for what they do. Anyone who can do this for five years gets my utmost respect. Afterall the game is about making profit for yourself so if your customer can accept 2% a year (chances are they would given 2000 market conditions), that's all you need. Don't tell me the default objective of trading is not about pocket as much as possible for ourselve. Sure, a money market account would have beat his returns, but for someone doing that much size I have to give him credit. You can never ever say "if I had this much capital I would be making a lot more money than I do now". A lot of styles and strategies do not work when you need to bring up the size you trade. Not to mention psychologically I believe every trader has a built in limit of how much size/pain they can handle, for me this is going to be a huge problem later on as I simply can not envision myself handling huge sizes with control. Even with 1000 shares I tend to pare out a lot earlier than I should versus something like 500 shares. Yes, time and practice can help, but we all have natural limitations. Hence trader B without a doubt gets the nod over the trader C. This game is not about shooting highest percentages, doing super human deeds, nor making 1000% a year trading the same stock over and over again (let's face it, had he traded one million dollars there is no way he could have achieved the same numbers % wise), it all comes down to $$$ value. Whatever it takes. Trading is a tough game to begin with, and if you make money at all you are doing something right. This is not a comparison of skill levels, it is the cold hard cash we are after, the bottomline. It is not about life style either when you are talking about the ultimate success in any given profession. It is the result that matters. It is unquestionable that your friend has the best life style of the four, but we are comparing the career achievement of those traders, NOT their personal life . . . As anyone who worked at major corporations before would tell you, to climb the corporate ladder to the point of managing a 2.4 billion dollars portfolio, that alone is a Herculean feat, whether you had insider connections, Ivy League degrees, whatever, it takes more to get there than all 3 other traders combined . . .
How one rates the success of a trader is a very personal issue. It is totally subjective and boils down to the psyche of the individual making the rating. I make a decent living trading, have a great lifestyle and have a caring family and have time to spend with them. Hitman, feel free to rate me badly against a top performing hedge fund manager. That is your choice and based on your subjective assessment. However, it is YOUR assessment, and may or may not correspond with other peoples' assessments. Your assessment is not THE definitive assessment, it is just AN assessment.
Candletrader: You are still ahead of 99.9% of the people who ever attempted this profession, and way above average for those who are profitable. This is how I would rank profitable trader's ability scores, whatever means neccessary (swing/intraday/options/futures). Keep in mind this score is given on a yearly basis, as traders past performance doesn't mean anything since we are as good as our next year/month/week/day/trade . . . 0 - You lost money/blew up, the dead zone. 1 - Break even, get a little change after commissions to the extent of a tax rebate. In my opinion, just defending your turf is a pretty daunting task, when I started I was giving up ground every day and I would have gladly pocketed $10 a day if I could. 2 - Making enough money for a part time pursuit, nice extra cash but not enough to quit your full time job. A few K to 25K a year. 3 - 25-50K a year, barely replaces a full time job but you can get that money easy elsewhere for a lot less stress. Sure trading is fun but I honestly hated my job after a $4K down day even if I made $5K two days before . . . Sure I love trading but we all know the possbility of blow up and day trading is about as useful as playing at a casino on a resume. 4 - 50-100K a year, you are making more money than many people at other jobs but still not the type of money you should be making for something without stability. This is where I will probably be after the year is over. 5 - 100-250K a year, the sweet spot of trading, only when I get here I would consider myself truly arrived. It is highly unlikely for most people to make this much money regardless of what their professions are, only now you can even start to consider yourself a success, but obviously, there is more. 6 - 250-500K a year, now very very few people can touch your raw income potential. Coupled with the total freedom this is the ultimate job. 7 - 500K-1 million a year, absolutely sick. You will need to AVERAGE 2-4K a day to make that happen. It is one thing to make 2-4K a day every once in a while, it is a totally totally different game to AVERAGE that. Even during my best months I have never, ever AVERAGED 1000 a day, and I had many multiple K day's in that stretch. It takes a lot to get to that level, and I believe this is probably where Candle is. Not only you have to average that much during your best months, you have to be able to do that for summer time too! 8 - A couple of millions a year, in many ways, this is the ceiling for super star traders. This is the black belt of trading for individual traders. 9 - trading desk manager / hedge fund manager / institutional traders / individual traders with SUPER SIZE pockets, the potential door to 8 figures. (My boss made 7 million in March alone off commissions/payouts, and a hedge fund man at our firm made 40 million in 1999 and 25 million in 2000 (for his OWN POCKET!). 10 - Reserved for legends such as George Soros . . . Obviously, like any other profession, the higher you go, the tougher it gets, and while it is highly unlikely you can spend more than you make once you reach say, Level 6. To go from level 6 to level 7 would take enormous skill, talent and effort, the gap is incredible as you go higher. There are those of us who wants to climb higher, and it is not about money as in how much money I want to spend, but money as in the score of the game, the love of the game . . .
Hitman - If profit was the only determination of a great trader, then if I put $100 million in Treasury bonds and make $5,000,000 doing nothing, then does that mean I am a better trader than you?
>For anyone to manage a 2.4 billion >portfolio, that's the level of trust >they have from others, and that speaks >volume for what they do. Since the record shows that something like 80-90% of fund managers don't equal the S&P index, I'd offer up that by selecting the 'trust of others' measure, you have perhaps chosen a rather weak indicator of success. It appears that(like the analyst game) there are quite a number of people who have talked their way into these positions that don't exactly deserve them. My preferred measure of success is what one does with what one has...but that is just me and since I'm clearly not serious about trading I'm probably way off base. JB