are you using margin? or options? or straight stock. I understand you use straight stock (I think) but i dunno if you use margin
brandonf, just for comparison purposes, What is your average gain/loss and % right? I have been profitable on 41% of my equity trades. The average gain is 13.5% while the average loss is 4.1%. Do you sell off target, say 25% or do you wait until the trend ends (lower low, etc) Sometimes...but usually it is a mistake. I find I do better if I just trail my stuff with pivot points. traded breakouts two months ago (as I'm trying different methods) and overall I ended up roughly breakeven but thats mostly cause my longs got flushed on that lean a few weeks ago on the index. Now I'm back to trading my 'old' method to see if it works better in this method (basically scalping big time frames, I look for no follow thru cause u dont get any). Trading breaksouts is a hard way to make a hard living, but I think thats probably true of any kind of trading. Its a bit like a relationship, you have good points and bad points. If you love a person you put up with the bad to enjoy the good. Another problem u run into is that once you start trading size you will be forced to start buying inside the base since your buying will start causing the breakout or the breakout will move faster than you can get in out.. at least what I observed from breakout traders. Size definatly makes it difficult. At first I tried buying before the breakout occured. All this did was made my number of stops go way up and drag my return down. I now buy on the breakout nad then look to add on the pullbacks. So far so good. Why do so many ppl say breakout trading doesn't work? Everyone bashes it but off decent bases or setups its simplicity and profitability its good. If you research on message boards you will find that there is not any type of trading that works. We are all wasting our time because "If I could not make it none of you pissants possibly could". I think people just have a tendancy to speak badly of what does not work well for them. You would be hard pressed for example to get me to say anything at all possible about options..but someone out there took all that money from me..so its obviously profitable for someone. Nice work, 70% YTD is fantastic in this market Thanks. One of my biggest pet peeves though is people who go on about how hard "this market is". Its not supposed to be easy, if it was no one would work for the companies we trade. In 1999 everyone complained about how hard it was and they wished the easy money would come back. Now people want the easy money from 1999 back. To be fair though the equity markets have been exceptionally challanging this last year or so. They are in a big wide and ugly trading range. Most of my return has not come from equites this year, but from Cotton, the British Pound, Crude Oil, Natural Gas and Soybeans. If I limited myself only to stocks I would be up 19% this year and have a maximum drawdown of 21% doing it, hardly anything to be excited about. Luckily for me there are a number of other markets and I am willing to trade in them when they give me something that turns me on.
I trade options from time to time and contribute nicely to someone elses bottom line whenever I do it. I am not a profitable options trader and as much as I try I can not get anything to work in that market. I have pretty much written it off and accepted that I will forever be in the majority (losers) in the options market. On occassion I will go into 25% (ie invested at $1.25 per $1)margin on my equities trading if everything lines up. The last time I did this was from March to June of 2003. Brandon
hey brandon, those are incredibily impressive returns. particullarly since the average fund is up 1.06% for the year, per august business week. 70% on 25 million is 17,500,000.00 neting you $3,500,000.00 plus the management fees. not bad for a years work! by the way, what's the sharpe ratio on the fund? thanks! surfer
Hmm.. i never knew you traded commodities.. is there anything in particular that you look for as far as trade setup... or is it all technical based? --MIKE
If something has been in a strong trend and it stops responding to news in that direction you tend to have an opportunity.