Rather than stop trading, you could also start consolidating on your equity curve and substantially eliminate the risk for the equity to drop to 150k area. This way, you will not take any substantial risks for the rest of this year while keeping warm and ready for 09 and improving your system at the same time in a relaxed manner and feeling good about yourself... happy Dec.
whats the point in stopping trading? I have not read your journal but I assume you see a set up and take it? Or is all this very discretionary?
i agree with you on this, completely. i thought that maybe you had this under control in your trading methods as you made the biggest gain last friday (a huge market up day). last week was a very nice week for me, but i got very lucky on friday that i got out of my puts before lunch. this week, i kept doing the same thing, buying puts in the morning, but it wasn't working as i kept getting stopped out (lucky i actually followed my mental stop losses). finally, i realize it's a buy the dip market, and on friday, i made money buying spy calls in the morning and selling before the close. neke, if you don't have a netbook, i strongly recommend you get one and sign up for a verizon broadband (or something similar) that allows you to trade anywhere. i have a dell mini 9 netbook that weighs a little over 2 pounds and i carry it in a small messenger bag with my usb verizon broadband card. most netbooks don't have a pcmcia slot. i can trade anywhere (even in the bathroom lol) as this is really small and lightweight. i was trading from walmart yesterday, while my fiance was shopping for black friday deals. i even have cnbc plus, so i can watch cnbc live (a little delay, about 15-30 seconds) using the internet. i bring this with me everywhere especially at lunch time (which is the last hour of the market). i guess it's buy the dip for the current market trend, until it's not... good trading.
Neke, You have done something phenomenal, two years in a row! Keep up the good work. I haven't read every single post so I'm not sure what you follow to determine your bias, but you have to have something right? Not that I'm an expert when it comes to the stock market, but I've lost track of the number of times that watching any/all of the variations on market breadth has saved me from making a terrible mistake in the wrong direction. On this public forum I'm fearful of giving away my edge, so I won't say specifically what I look at but it is only three additional charts of three symbols. I'm living vicariously through you. I hope to continue reading your journal next year as well. Regards, John
Come on. Dont you remember good ole DALRQ? When Delta went into bankruptcy, everyone's attitude was that it was basically over and time to to dump the Delta shares, but thats when the real fun began. Large cap penny stocks that are either on the brink of bankruptcy or in bankruptcy make the best momentum trades. When Fannie and Freddie went into the pennies, many on elitetrader were holding their bellies stating that it was all over, but it wasnt. There were plenty of good day and swing trades to be made with these penny stocks. There are still some good ones out there though trading in the pennies, but with good volume. Here is a list of ones that I am monitoring which are poised for a good breakout. This is a risky list and not for the faint of heart or elitetraders who hold their bellies saying its over. Dont worry mods, all these trade with 1 million+ volume per day. Im not saying that this list will double, but if it gets out over the breakout point then the possibility is there. I have the points set to alert me when they hit a certain threshold: ALD IO PPO RPT ZQK KFN **SRZ- ALready jumped in on this one on Tuesday with a trailing stop, just keeps going up. DRYS TC TCK CBL LVS HGSI CMZ **BKD- ANother one of these senior living stocks I jumped in on. I saw Sunrise and couldnt help but get a chunk of Brookdale. DFT STX BEE ABD **CNTF- Already got a good chunk on Monday and dumping as it reaches the line. TRMA LINTA XRM SIRF Then there is the crew that you all were holding your bellies over and never got 1 share while it went up and up and up. I still feel these could double in little time. Ford, GM, Fannie/Freddie, AIG and C. Then there are other long forgotten ET faves in which the experts pounded the desks wanting to buy when they were at their all time highs, but wont touch them at this low point which are FMD, VMW, RSH,JASO, etc. Why play with options when you have stocks that act just like options with less risk?
No house, car is easy, no kids (despite a few offers) and divorced wth girlfriends here & there. Now you see why I only need half-a-mil to say "f^u" to the man. 500k would be more than enough to allow me to retire from working for a living, pay off my bills, have quite a bit of money in the bank and a ton of cash to act as a cushion to sustain a bad drawdown, which at this point only happens when my discipline goes AWOL and I have to "reset" (Discipline and Risk Management are the Keys to the Kingdom, IMHO). I am not "consumer oriented", have minimal debt (don't belive in too much of it, actually) and I don't have to generate a large cash outflow to sustain a nice lifestyle. Lucky me.
This is a great journal, assuming it's truthful (which it seems to be). Here's something to consider: If you are actually capable of multiplying an account 3fold or more consistently, by taking large risks, then you are capable of making 30-50% per annum taking low risks. If you are capable of the latter, than you are one of the top traders in the world, and all you need to do is raise some capital and start trading it conservatively, and within 5 years you will probably have 50 mill+ under management and be ready to make tens or even hundreds of millions of profits over subsequent years. If you don't want to go the business route, you can still scale down your risk and aim for say 50% per annum with acceptable risk. Compound that for 7 years and you are up 17-fold on capital. Even after tax and some withdrawals, at 30% per annum net your 400k would become 2.5 mill in 7 years and over 5 mill in 10. Going for 30%+ with low risk means you have basically zero chance of busting out if you actually have the skill to do it. Going for 200-1000% taking huge risks means that you are *almost certain* to blow out, in the long run, no matter how talented you are. Constant adventuring guarantees eventual blow-up. What rational individual would pass up a 99% chance of becoming a multimillionaire within 7-10 years, in favour of a far lower % chance of doing it within 2-3 years, but with an accompanying very high (50%+ IMO) chance of blowing it all by suffering a huge or even 100% drawdown? Note that this is just based off your equity swings, and the potential for market losses *even with 100% correct trading* - it does not include the chance of you going on tilt and blowing it stupidly through revenge trading or other psychological mistakes. I think if you step back for a minute, you will realise that it is *almost insane* to pass up a surefire chance of becoming financially set for life within a reasonable timeframe, in return for maybe doing it 3-4 years quicker but with a huge chance of losing it all. Unless you have a terminal disease and less than 5 years left to live, it makes no sense to take the level of risk you are doing right now. I offer this advice simply because many traders have followed exactly the same path, and most eventually blew up after their hot streak - even though they were good traders. If you have a genuine edge or talent, then there is literally *no need* whatsoever to be in a hurry, there is not only no need to take big risks, it is financially suicidal to do so. Think long and hard about whether you want to continue at this level, or dial down the risk somewhat. You want to be the tortoise in this game, not the hare.
ah, a man after my own heart.... you sound european. although there are simple living folks in the u.s., there aren't too many of them. being happy in simplicity gives you a lot more choices....
don't want to quote it (too long), but am writing in regard to what cutten said above. although i can see the logic of his argument, i would opt for a middle route. instead of "risking it all" to make it, i would risk a portion. maybe set aside 100k of no risk money. then when you get to 1 mil, set aside 6-700k for no risk (or low risk) money. that way you still have a few hundred grand to play with and try to make it big, while being more conservative with the bulk of it, substantially lowering your risk for blowing out. you take big risks up front, but lessen the risk as you go, thus lessening the chance of a blowout. you're gonna do it your own way, and godspeed to you, but these are just a few suggestions, fwiw....