swing trading stocks for a living

You can work on this by picking low volatile vehicles, qqq, C, BAC,

Stay away from goog, bidu, TF for a long time
EF

 

The only person I know who had a profitable system with a smooth equity curve was Bernie Madoff.

If you haven't done so already, I suggest you visit Collective2.com. The site is a good reference for looking at various systems, their equity curves, and risk profiles. (And also understand that for every winning system you see profiled, there are probably 100 that are losers or that have bailed out.)

 

The site looks interesting. actually one of my friends mentioned such an idea a few years ago (obviously he doesn't know such a site exist). my questions were why do people want to pay to see your trades/portfolio (how good is your system? / is the track record credible?), and why do i want to share my trades if i can make money from trading.

according to C2 web site, track record credibility is not an issue with them. but i'm still not sure about my 2nd question. if i can make money from trading, why do i care about the subscription money???? the most subscribed systems can get about $10,000 a month. if the system charges $100 a month, which means the best system get about 100 subscribers. not a lot. and such track record probably takes 2-3 years to build. and with such a track record, it would make a lot more money to run a hedge fund than doing it on C2. for an average, yet profitable system, expect to get about $1000 from subscription, which is not quite a significant amount, considering the amount of work involved.

the only reason i would want to do it is the subscription money can help cover the down months.

just curious, is anybody here maintaining a system on C2 and receiving meaningful amount of subscription money??? chance for you to advertise your system.....

 

I don't quite understand the P&L volatility thinking?

If you want less risk take smaller positions. If you don't have the capital to take the kind of % of capital risks that you would like to take, then you have to get more money or (possibly dangerous) adjust your risk profile/expectations.

If you are talking about making money every day/week/month/(maybe even year!), then I think over the long run you will be sorely disappointed (and likely out of business). Robust approaches mean losses and sometimes undesirable equity curve swings. This of course assumes you are taking traditional risk and not doing some sort of arb/hft trading.

We buy and sell risk. When buying risk becomes a no-brainer, there must be pain, otherwise the gig is up. So losses and short-medium term unpredictability help eliminate our competition which is absolutely necessary for this thing to keep rolling along and paying the bills.

 

Putting a good system on the open for commission is stupidity, thus necessarily, the systems you see in such websites are either developed by stupid people or by smart ones who fade them.

Take your pick...

 

There are 10,000 systems available today, from books, magazines, canned software, subscriptions, etc… I spent years and years playing with them. There are scores of excellent authors, for example Michael Harris, who can provide the internal mechanisms (and the code) of a good trading system. Then there are sites like C2 where you can buy a money maker that does the trading for you - for a price. However, many traders cannot adapt to these systems even though they may be profitable. Traders are extremely puzzled when this happens. Why is it we don’t just don’t straight out adapt to working edges?

The answer is many of us are driven by our own internal need to adapt to only what suits our trading temperament. It’s the little things. One trader can’t handle more than four consecutive losses and this edge has five, another trader is recommending an edge that says a 2% per trade risk model for the account is in order and we want a 1% risk per trade for the account, then the high pay out C2 system comes with 16% draw downs and we can’t stomach more that 10% and it goes on and on.....

So if we can’t adapt to an edge we read about or subscribe to then some of us make our own edge. But the only way to really make one of these that makes profits is test it until it is second nature to you. If it doesn’t fit you modify it, discard it and start again. Then you trade it until you know its nuances and if you don’t like its characteristics start over. Then once you find an edge that fits your trading temperament you build a business model around it to protect from all of the ways loses can sabotage your edge.

In the process of developing this edge we refine how it works to suit our trading temperament or accept the edges limitations. We often unknowingly set up scores of rules in our plans that state the limits that this edge must work within that reflect out true trading temperament while the edge itself remains static. This in effect becomes our business model. Many traders on ET have said they have spent more than 10 years developing their edge into a working money maker by just adjusting the business model and leaving the actual edge untouched.

So, each of us, in effect, who swing trades for a living, is running a little business. We are like little Mickey D’s operators. When the day ends many of us take time from our trading solitude of running our burger shacks (trading) to post on ET. We each post on our own business model and trading temperament, trading style and the business acumen for slinging burgers (trades).

Each of us who posts on ET is often trashed to pieces by another trader who says our business practices will not work in trading and are stupid. When I ask how they trade they say their business model is E-commerce (day trading). And all I can do is agree and state if I were day trading I would not do that either and then immediately go back to using it because it works in my business model.

So that’s what brings me here. To listen to ideas that may or may not fit my way of doing business. Always listening and always tweaking to make the model work better.

Also, I totally agree with Intradaybill that putting a good system open for commission is stupidity. Because it is not just the system you need to understand with but the complete business model that makes the system make its profits.

On a final note I even bet if many of us gave our edge away (I don’t intend to) we would still have volumes of questions on how we run our business of trading this edge. And after answering the questions many traders would tell us it’s a ‘junk edge” because they would not have the trading temperament to trade they way we do.

 

It's not yet my primary source of income but I have been swing trading for a couple years. I'm averaging close to 1% per week trading long/short with lower downside volatility than the market.

 

1% a week, which is about 3-5% a month. that's a good return % i would say.

how about max % drawdown?? do you mind telling me?

 

Hi,
In 2008 while trading long only dd was at least 20%, but I was pretty much flat for the year. Since then I have been keeping detailed stats on a weekly basis (which is the time frame I have made close to 1%/week) and max dd was 18.5% in early 2009. Added trading on the short side in the fall of 2009 and since then max dd has been under 8%. This is across several strategies which have hold times ranging from a couple days to a couple weeks. As of Friday I was in a DD of less than 2% and am only down a fraction of a percent so far this week.

Don

 

I see. Thanks for your info.