Sorry, saw the other replies also - but this is shear stupidity. Goes beyond ignorance, which can be fixed. I have a real problem with those that insinuate that whatever anyone else is doing is wrong or not the right way because others do it differently. Constructive criticism is one thing put to say your way is right and other are not really gets on my nerves.
Thanks Neke for replying directly to my posts. If you read again what you quoted, I never said 6-figures daily. But if you are putting on say 20K shares of GRMN on earnings day, you are most certainly going for a 5-figure trade (as I recall GRMN had about a 7 or 8 pt range that day including premarket). Given the names you trade and the size at which you trade them, even one position at a time, you should not be too impressed with say a 50K gain on the week, given the volatility. Or put it this way: do you think you can achieve the same numbers if you were limited to 2000 shares maximum on each position? If not, how close do you think you would come? I realize that I am only focusing on your largest gains/losses for the week, so maybe that skews my view of how you trade. But I'm wondering whether you only get into position sizes that large when you are averaging down into losers? You need to be very careful about distinguishing between a real edge and leverage bailing you out. I've been through this realization several times; clues that it's more buying power than edge reveal themselves in the pattern of your wins/losses. Are one or two trades/days making your week/month, so to speak, while the rest cancel each other out? Do your biggest positions taken result in the biggest profits? Or are they usually just avg winners/outright losers? I know for most position/swing traders it's one or two big winners that usually make their months or even years, but as an intraday trader you should achieve a much higher level of consistency. The coin flip argument about a false edge not being able to survive leverage is specious; trading is just not comparable to a series of 50:50 or 45:55 etc propositions -- percentages are only valid in hindsight. You have to dig right down to the nitty gritty of WHY you've put on the trades you did, and whether those REASONS hold and will continue to hold in the future. If you say you are mostly a discretionary trader, then you can really throw the coin flip stuff out the window -- the whole issue just cannot be quantified in that way with any accuracy for future performance. But IF you can say to yourself "ok [blank] is why my trading works; [blank] are the people I'm making my money off of and whom I will continue to take money from" etc, then you should have much greater confidence in your past projecting into the future. Lastly: are you really trading these kinds of stocks through a retail broker (Ameritrade) while holding a full-time job? Now that much is impressive in itself.
Trading that size one position at a time, you should not be overly impressed with 50K gain in a week, while you should not be overly surprised by 50K loss a week. If limited to 2000 maximum per position, same number of trades, you should not achieve the same result. However, if you have 10 X 2000 positions instead of 1 X 20000, there is no reason not to achieve a similar return with reduced volatility, assuming a similar edge on your trades. You need to be very careful about distinguishing between a real edge and leverage bailing you out. I've been through this realization several times; clues that it's more buying power than edge reveal themselves in the pattern of your wins/losses. Are one or two trades/days making your week/month, so to speak, while the rest cancel each other out? Do your biggest positions taken result in the biggest profits? Or are they usually just avg winners/outright losers? I know for most position/swing traders it's one or two big winners that usually make their months or even years, but as an intraday trader you should achieve a much higher level of consistency... Leverage is not an edge. I don't know how else to illustrate it. You can be bailed out in the short-run, but my example was meant to show that the longer you trade the less likely it is that your result is a fluke if using leverage the way it is granted by the brokers. I don't know how many trades you want to see, but I have made thousands of round-trips since my first thread started. I believe in what I do, that's why I do it. I am not here to convince you I have an edge. One person may be convinced by a 1 in 300 event, another by 1 in 1000000, yet another will not believe in 1 in 10 to power 1 million - he cherishes his position more than the evidence. If a hedge fund has 2 trades out of say 20 making their year, I do not see why someone having 2 trades of out 20 making their week is any different. Back out my automated trades which are made with small size, you are probably looking at 15 discretionay trades on average a week. I have said it repeatedly I do not make 1000 trades a week: it is not my style. Besides I cannot do that while on a regular day job, that's why I look for the one or two trades that should make my day, and seek to get the maximum from them consistent with my risk tolerance The coin flip argument about a false edge not being able to survive leverage is specious; trading is just not comparable to a series of 50:50 or 45:55 etc propositions -- percentages are only valid in hindsight. You have to dig right down to the nitty gritty of WHY you've put on the trades you did, and whether those REASONS hold and will continue to hold in the future. If you say you are mostly a discretionary trader, then you can really throw the coin flip stuff out the window -- the whole issue just cannot be quantified in that way with any accuracy for future performance. I used the coin toss analogy because it is the simplest and best I can think of. If you are are making assertions like being "bailed out by leverage" or presenting statements on quantitative metrics as facts, you've got to be able to back those up with sound mathematical reasoning. If that analogy is not a good one, I am waiting for your model that explains how leverage is an edge in the long run. I am irked when people present assertions that do not stand the test of logic, and make no effort to prove them.
Trading 20K shares and 10 x 2K share positions are 2 completely different animals, that was my point. Making it a routine of taking 20K shares of very volatile stocks and ending up 1 or 2 pts on the trade (especially on an avg down) makes any concept of edge suspect. On the other hand if you can achieve the same results trading 2000 shares max per position, I would drop my argument completely and concede that you do indeed have a robust edge. I've never claimed leverage was an edge; my point was the opposite. Leverage can hide a degrading edge or complete lack thereof -- your high use of leverage should not be seen as evidence your edge is solid just because you haven't blown up yet. LTCM was a perfect example where they just kept reaching harder and harder "sucking up nickels in front of a bulldozer" until the whole thing came unravelled in a relative eye-blink. All the more so that you need to be careful. The profile for a purely intraday trader is different from that of your standard hedge fund. You are already hitting a size that will require you to spread out your bets, for better or worse. Definitely be very careful if and when you decide to branch out into overnight/position trades. I think you misunderstood my stance on leverage earlier. I am not here to provide any models, in fact I am a great disbeliever in any sort of quantitative analysis, especially for discretionary traders. Looking for that sort of mathematical basis to rest your laurels on can only slow you down in the future. Essentially, for me discretionary trading always boils down to a case by case, trade by trade basis, for me it is more art than science. But that's all personal and not something I'm gonna claim as be all end all. I appreciate your response and am just hoping you will take some caveats here to heart.
Weekly Update for week 45/50 ended 11/21/2009 Flattish week, up 4.6K(0.8%). Made it Tues/Wed, gave it all back on Thurs, and eked out a little gain on Fri. Still planning what my trading next year should look like. I am increasingly looking at incorporating more swing trades into the equation. I have sadly missed out on many multi-day moves while getting out with little gains for the day. Of course I know that increases the risk profile, but I will see what formula to adopt in position sizing for those trades, given all the points to consider: not tying down capital and missing other opportunities, keeping the overall risk exposure in check, and not choosing too long a timeframe for my patience. Code: Opening Balance: 580,271 Net gain for the week 4,571 ------------------------------------------------ Net Balance: 584,842 Number of Trades 23 Number of Profitable Trades 14 Since Inception of Thread 01/10/2009 - 11/21/2009 Opening Balance: 320,064 Net gain (Less Margin Interest) 264,778(Up 82.7%) ------------------------------------------------ Net Balance 584,842 Number of Trades 1200 Number of Profitable Trades 760 Top/Bottom Discretionary Trades for the week TICKER ENTRY DATE/TIME EXIT DATE/TIME QTY PURCHASE AMT SOLD AMT GAIN/LOSS TYPE PNEWB 2009-11-17-10-24-14 2009-11-17-15-39-11 20000 76570 89000 12147 PCLN PUT NEMWK 2009-11-18-09-45-29 2009-11-18-10-11-48 30000 50100 60094 9582 NEM PUT ----------------------------------------------------------------------- DKS 2009-11-19-09-19-22 2009-11-19-10-27-50 30000 677057 665550 -11595 SHORT NQWD 2009-11-19-10-52-23 2009-11-19-14-29-58 100000 95000 81000 -15323 INTC PUT
Were you actually in the green on the DKS short position for some minutes before it reversed on you? You could have taken a profit on that trade?
Weekly Update for week 46/50 ended 11/28/2009 Ugly week, down 22K (3.8%). Should have stayed away from those SPY calls. Lately I have been having the raw end of those trades, and I should keep off them, except the individual stocks are not setting up frequently enough. Code: Opening Balance: 584,842 Net loss for the week -22,041 ------------------------------------------------ Net Balance: 562,801 Number of Trades 12 Number of Profitable Trades 7 Since Inception of Thread 01/10/2009 - 11/28/2009 Opening Balance: 320,064 Net gain (Less Margin Interest) 242,737(Up 75.8%) ------------------------------------------------ Net Balance 562,801 Number of Trades 1212 Number of Profitable Trades 767 Top/Bottom Discretionary Trades for the week TICKER ENTRY DATE/TIME EXIT DATE/TIME QTY PURCHASE AMT SOLD AMT GAIN/LOSS TYPE FYNLF 2009-11-23-11-02-00 2009-11-23-14-13-24 40000 107000 96800 -10744 SPY CALL SWGLE 2009-11-27-11-00-13 2009-11-27-12-58-32 80000 210833 201935 -9964 SPY CALL ---------------------------------------------------- DLTR 2009-11-24-09-36-20 2009-11-24-09-41-29 5000 253500 256650 3129 LONG DLTR 2009-11-24-09-49-51 2009-11-24-10-12-51 12000 618078 623338 5202 SHORT
Weekly Update for week 47/50 ended 12/02/2009 Will be out of town from tomorrow for six days, and will not trade, so ending my week earlier. Good week, up 35K(6.3%). Will fill in the details when I am back.
Weekly Update for week 47/50 ended 12/02/2009 This is just to post the details for the 3-day week for me for wk 47 earlier mentioned. High winning percentage making up for lack of outsized gain. Code: Opening Balance: 562,801 Net gain for the week 35,484 ------------------------------------------------ Net Balance: 598,285 Number of Trades 19 Number of Profitable Trades 14 Since Inception of Thread 01/10/2009 - 12/02/2009 Opening Balance: 320,064 Net gain (Less Margin Interest) 278,221(Up 86.9%) ------------------------------------------------ Net Balance 598,285 Number of Trades 1231 Number of Profitable Trades 781 Top/Bottom Discretionary Trades for the week TICKER ENTRY DATE/TIME EXIT DATE/TIME QTY PURCHASE AMT SOLD AMT GAIN/LOSS TYPE SNTS 2009-12-02-09-34-32 2009-12-02-09-54-58 40000 214430 226200 11723 SHORT GES 2009-12-01-09-36-49 2009-12-01-14-59-54 20000 831992 839288 7226 SHORT FHZXQ 2009-12-02-10-05-26 2009-12-02-12-23-35 20000 51786 58400 6339 FCX PUT ------------------------------- NEMXK 2009-12-01-10-35-08 2009-12-01-15-16-55 20000 33200 31800 -1675 NEM PUT QZNXH 2009-12-02-10-05-44 2009-12-02-15-46-33 66000 254525 249408 -6023 AMZN PUT QZNXG 2009-12-01-10-39-30 2009-12-01-15-59-37 40000 118200 111855 -6896 AMZN PUT
Weekly Update for week 48/50 ended 12/11/2009 An OK Week, up 17k (2.8%). Traded only Wed-Fri, as I was away the first two days of the week. Not much happening in the market for me. Just trying to stay clear of major pitfalls as I wrap up the year. Code: Opening Balance: 598,285 Net gain for the week 17,022 ------------------------------------------------ Net Balance: 615,307 Number of Trades 12 Number of Profitable Trades 6 Since Inception of Thread 01/10/2009 - 12/11/2009 Opening Balance: 320,064 Net gain (Less Margin Interest) 295,243 (Up 92.2%) ------------------------------------------------ Net Balance 615,307 Number of Trades 1243 Number of Profitable Trades 787 Top/Bottom Discretionary Trades for the week TICKER ENTRY DATE/TIME EXIT DATE/TIME QTY PURCHASE AMT SOLD AMT GAIN/LOSS TYPE RNWK 2009-12-09-09-30-05 2009-12-09-10-16-10 60000 233320 244407 11038 SHORT DAL 2009-12-11-13-31-24 2009-12-11-14-17-46 40000 447823 454739 6848 SHORT ----------------------------------------------------------- AMZN 2009-12-09-09-35-27 2009-12-09-11-12-38 9000 1182140 1178112 -4108 LONG