I began to trade 7 years ago. I trade stocks 1 month : was enough to judge that's I worked for the brokers so I went straight to futures market . Nevertheless some people won't be able to do so if they are undercapitalised, stressed by speed or on the contrary overexcited by the adrenalin that futures market give them: it can be a costly game for them much more than high bets at casino.
It is the same cycle again and again: the first speculators that were winning are rendering what they won and are even in losing position and they will quit soon whereas newcomers will enter and the market will let them win, acquire confidence, and as the former take their gain back etc. etc. an ever ending circle It is just statistics on speculators: by market efficiency the majority will lose and statistically they will always be some temporary winners during a rather long period (like in casino where you have only 1/38 chance to lose but at long term you will lose statistically speaking against the casino) that will attract the newcomers before these winners become losers. So the real winners are only a few and these winners know why they win whereas the "temporary" winners don't and so they should be aware that it is due to persistency of chance that the market casino let them win.
Well said rs7. One thing I would add to that is the love of the game . Nobody twists our arms to trade, we choose to be here. The whole concept of the market intrigues me, and that's what keeps me coming back. If you don't love it, chances are you will not survive.
Friday was one of the most abysmal trading sessions of the year. There is no aggressive buying and selling going on of any stocks. Stocks just don't freaking move! The way i trade it basically costs me $10k a day in slippage and commissions. So when stocks arn't moving i will probably have a down day. I have gone from 77% winning percentage last year (daily) to under 50% this year. This past month i was 8-11. My worst win/loss ratio for any month since i started day trading nov 2001. That said i finished up 10k for the month, but am still down 249k for the year. Volaitily is contagious. Right now there is a lack of it. No one is going to sell/buy anything aggressively because they are trading with themselves. But i do believe that it will get better. After the war resolution (1 month). If not than i will be very dissapointed. As i got used to making 10k a day in the market.
Lately most of the activity in individual stocks is futures arb related. If all you are doing is trying to trade futures through stocks than you will lose money in long run from slippage /commissions and bad fills. Please bring back the days when stocks would move violently on their own regardless of which way futures were moving. The only times i've made money this year is when i happened to be net long/short and the futures happened to go my way. Thats because so little has been going on. Sure i've caught a few nice moves in sectors here and there, but the opportunities are few and far between this year.
Having done this for 35 years, I can assure I have heard and seen periods like this many times. They usually change when many start to say this will never change. Hang in there, adapt and all will be fine.
By Marshall Loeb, CBS.MarketWatch.com Last Update: 1:58 AM ET March 1, 2003 It was Tolstoy who wrote, memorably, at the beginning of "Anna Karenina," "All happy families resemble one another; but every unhappy family is unhappy in its own way." More than a century later, you or I might write, "All bull markets resemble one another, but every bear market is unhappy in its own way." If you have lived through several devouring bear markets (as I have), you conclude (as I do) that this one is really different -- unhappy in its own way. It is broader, deeper, more pervasive and surely much longer than those bear markets of yesteryear, say, 1956-57 or 1968-70 or 1973-74 or 1976-78. You feel the ursine mood just about every time you get together with business people. You ask, hopefully: "How's business?" The almost invariable answer, whether talking to a Baltimore limo driver or a Fortune 500 CEO: "Terrible." So it was last Wednesday evening, when hundreds of corporate types gathered at a dinner of the Economic Club of New York to hear the chairman of the Joint Chiefs of Staff, General Richard B. Myers. The crowd was optimistic about the military, apprehensive about the economy. A quick sampling of the normally ebullient guests turned up precious few bulls. Even the perpetual optimists are quiet these days when you ask them when the economy, and the market, might turn up in a sustained rally. There are very few of those familiar forecasts of "just-wait-for-two-more-quarters." Nor are there many predictions as to just what forces might lead the economy -- and the market -- back up. My own view is that the beginning of the end of the economic malaise, and of the bear market, will occur when tens of thousands of middle managers stomp into their bosses' offices and proclaim, almost in unison, "Boss, we just HAVE to go out and buy more stuff -- more computers, more trucks and tractors, more tools -- because what we have is wearing out and becoming outdated." When that will happen is anybody's guess. My hunch is that it will occur sooner rather than later, even though those bosses lately have shown that they are able to stretch their machinery -- and their employees -- to far greater lengths than we had imagined. One favorable portent: orders for capital goods, excluding aircraft and defense products, surged in January by an encouraging 5.4 percent. So far this year, the stock market has fallen -- by some 5.5 percent, as measured by the Dow Jones Industrial Average. Last week once again, the Dow zigged and zagged -- down 160 on Monday, up 51 on Tuesday, down 103 on Wednesday, up 78 on Thursday, up 6 on Friday. In all, the Dow lost 127 for the week, and closed at 7,891. The market continued to be held hostage by the Iraq crisis. When it appeared that war would break out at any moment, the market fell like a stone. When it seemed that we might escape without a shooting war, markets firmed. But other factors also pushed stocks up or down. Consumer confidence dropped to a nine-year low in February, drained by worries over war, fear of terrorist attacks, job insecurity and energy price shocks. Crude oil prices since mid-January have spurted from $30 to $36.60 (On Thursday they briefly touched $39.99, close to the all-time high of $41.15 in the futures market in October 1990, during the Gulf War.) On the plus side, the gross domestic product in last year's fourth quarter rose 1.4 percent, which was certainly not robust, but twice as much as initially estimated a month ago. In this mixed environment, one thing that we are learning is that just because we have had three years in a row of bear markets, there's no guarantee that we won't suffer through a fourth straight year of market decline. Three scholars at the London Business School -- Elroy Dimson, Paul Marsh and Mike Staunton -- have studied global stock markets going back to 1900 and conclude that there is a 38 percent chance that a global bear market will strike in any given year. The good news is that there is a 62 percent probability that markets will rise rather than fall. But, as the professors write, "Once three successive annual returns have been in the same direction, the market is unlikely to have any memory of this, and a continuation of the trend is about as likely as a reversal ... Investors or corporations who anticipate a return to the stock market conditions of the 1990s are mistaken. This is simply irrational optimism." Or, as Anna Karenina might have said, grounds for a train wreck. Marshall Loeb, former editor of Fortune, Money, and The Columbia Journalism Review, writes "Your Dollars" exclusively for CBS.MarketWatch.com. Reporter Rebecca Samuels contributed to this article
This is great news - this is what a Winner does! Accurate Self-Appraisal. If the Market (or anything else) offers less opportunites, the Trader (or whatever) must expend more effort to compete. Perhaps expanding your timeframe a little bit and not just jumping on every little move may help - wider stops and targets - then make sure the hit ratio gets back on track. Also, congratulations on recognizing that emotions are hurting your trading - this can be my problem also sometimes. Best of Luck, Paul
Perhaps the majority are too stubborn and unwilling to adapt to conditions as they are. I don't really know. Do not the majority fail over the long-term anyways? But one thing is for sure - if a person wants to nourish/foster the idea that it is too difficult to trade now, then they will certainly have a tough time. It becomes self-fullfilling. Others will decide that they will adapt regardless and take ultimate responsibility for it - it is a mindset that leads to much better odds of achieving this goal. Regards, Paul