Maybe when you are looking at the last 12-18 months. That can change again. Historically - over time - small-cap value has beaten any large cap style.
I dunno about that. The problem with small and mid caps is that while they may have huge market crushing runs these rallys tend to be brief. NFLX, a midcap, surged from 8 to 40 in a year half but has spend the last three years doing nothing and now trades at $20/share. A large cap like goldman has delivered consistent, market beating performance for many consecutive years. I'm also picking large caps that are favored by wallstreet so that helps a lot.
nice RIMMMMMMMMMMMMMMM up $12 w00t Yea I have seen those statistics before, but I invest in the present and I don't see smallcaps doing as well as large caps. Maybe that will change but now is not the case.
I'm not surprised you don't know anything about Sharpe. I'm talking about the Sharpe ratio, not the pen. And I said "above average daytrader will beat an ABOVE AVERAGE investor." Please learn something before posting--geesh. Simply put, the Sharpe ratio is a way to measure risk-adjusted return. To calculate it, you would have to learn how to calculate standard deviation and understand that winners are not chosen just by the amount of return, but by the consistency in getting there. Buying and holding Nasdaq stocks like the ones you own involved an 80% drawdown a few years back. While buy and holders were watching their portfolios get demolished by 4/5, TRADERS often made money. If one can make above average returns with lower than average drawdown, that person is regarded in this business as a star. Above average returns with above average drawdown puts you right in the middle. High returns with high return=loser. You're a waste of my time. The ignore button for you!
I believe you're doing the right thing, just be prepared to change your approach once the markets change. Things tend to revert back to their historical norm over time.
Personally, I think anyone CAN do it (and better than me for that matter). The problem is, not everyone has the inner drive to make it through the initial learning curve (most usually give up because its too hard). I spent literally 1000's of hours watching (and reviewing charts), trading small and getting a feel for how to approach stocks from a daytrading perspective before consistenty pulling in a good living. I can tell you, it was virtually stress free once I had my approach down cold. The only times I ever stressed was when our system froze or some other anamoly happened. To the question of sustainability, I would say if you learn the mkt you want to trade like the back of your hand, it certainly is. Because you'll see the same charateristics day in and day out. There are many variations mind you, but if you put in the screen time and really pay attention, you'll be able to discern good oportunities from bad. Sort of like a incredibly quick mental probability calculator based on what you are seeing. Of course, this can take years to develop and, unfortunately, everyones situation is different and many people cant afford to spend alot of time learning w/o earning. But those that can spend the time and want it bad enough, sure I think they can do it and make a great living.
Steve Tvardek has been nice enough to explain the trading process to you. He's pretty accurate in his description of the timeline, and in addition I would like to add that you should (must) only take those setups which fit within your trading parameters, otherwise a trade goes from a probability of oh, say 80% or higher, to maybe 40-60% of being successful ... ... and regarding the increase in capital, that's doable also, but you're going to need to understand and use leverage very very well, most traders never get there, they believe the holy grail of trading leveraged products is in the entry and exit signal, it isn't. *** But to the point, Stock Trad3r has been catching a lot of flack for doing what works for him, what he appears to be pretty knowledgeable at, and what consistently makes money for him. And that ain't right. To become a good trader of leveraged products normally takes about 3 years of your life in a dedicated and committed process of constant learning and evolution, and at least 10 G's, if not twice that amount. And just between me and you, being lucky doesn't hurt either. Not everyone wants to, or even should, do it. Good trading, Jimmy Jam
Great point stock_trad3r. Statistics when taken out of context lessen in their importance and value. The reality, which is not reflected in the statistics that makloda posted, is that if you catch small-caps at the upwards turn of the business cycle after a downwards cycle they will beat all the other financials, and may beat commodities as well (but I don't have enough experience with comparing the two to make that as a statement of fact). However, once the business cycle matures it is large caps that will hold sway, and in the maturing years of the business cycle it is the niche playing mid-caps that will tend to outperform. Now, comparing Growth vs. Value will add another layer to analyzing their performance, but I think you get the point. Good trading, Jimmy Jam