I'm a daytrader. I consider a: Base hit ................01-.25 double ..................26-.50 triple ....................51-.99 homerun....................over 1 point gotta_trade
A home run to me... a 100% return on the trade. I trade multiple time frames simultaneously: http://www.elitetrader.com/vb/showthread.php?s=&postid=263828#post263828 So as far as this poll goes, my answer is both. -- Z
Oh yeah. How many of those have you had with your "out spoos +.25" style? Seriously, how can you say that? How could it possibly escape you that what a homerun is depends entirely on the amount risk assumed to achieve it? Just how much of a "homerun" was a $50k trade if you were risking $50k to get it? To answer candle's question, I go for the homer. I consider something a homer if I get 7+ the amount of risk, in terms of the share price, on the trade, and 10+ on the dollar risk (because I always pyramid into the position.) They sure don't happen very often, but that's what I go for. (Some gold stocks I'm still holding off the March lows fit this bill, for eg.)
I only go for the homer. I never risk more than 2.30/2.25 points for the SP/ES. Anything less than a 7 point win just helps make up for the losses. To give you an example of what I do, on 6-9-03 a sell at 10:30am (ET) is on the agenda, then cover and go long at 2pm and stay in until the close. I use a mathematical model to time the market and the Turtle strategy to determine trend for 15 minute bars. Depending on the trend determines whether I trade the SP or ES contract(s).
In this case, i would definitely be going for doubles and bare in mind that strike outs are not allowed in my stadium.
Trading Seasonal Spreads we are in for the seasonal average, but every few months you get these giant windfall profits. So I guess over a period of time we are in for the average home run.
Nassim Taleb (the guy who wrote "Fooled By Randomness") is probably the consummate homerun hitter. I read an article about him in New York Magazine that described his hedge fund strategy. He basically concluded that although the odds of a catastrophic market event is mathematically small, in reality (due to market psychology, herd mentality, etc.) it happens far more frequently. So, he basically buys up tons of oom options on the cheap. When they expire, he just buys up more. Most of the time his fund just slowly bleeds money. But, every few years a major shock occurs and he makes a BUTTload. What's also interesting is that his system is PURELY mechanical. His team developed a black box that just spits out which options to buy up. The team spends most of the day just playing with mathematical models, figuring out how to improve the system. I, personally, am not at the point (psychologically or financially) where I'm even willing to approach a homerun strategy. You gotta be able to sustain long dry spells. That would drive me crazy!