What trading style is better...slow and steady..or hitting homeruns once in a while?

Discussion in 'Trading' started by gimp570, May 24, 2007.

best trading style for the long term

  1. slow and steady....

    65 vote(s)
  2. Looking for the big trade.

    21 vote(s)
  1. gimp570


    What trading style do you think is the best...to just grind out a few hundred bucks everyday being in only a few thousand shares or to try to go for the big trades really trying to make big money?

    When going for the big trades there seems to be many more ups and downs....which can be very stressful...

    but when just staying light..i always think how much i could have made if only i would have held on longer or been in more shares

    what trading style do you think is the best for long term success ?
  2. MTE


    There's no best style. You may need a stronger stomach for the homerun style, but you can be successful with either one.
  3. Slow and steady will keep you in the game longer, esp in the beginning. More experienced players will/can hit home runs, but when you are new to trading, keep it simple. Plus, a slow and steady could inadvertently turn into a home run.
  4. I'd say emphatically that hitting big homers once in a while is better because that would likely mean that you either picked a company/stock with very strong reasons to do so and you can buy(or short) and walk away feeling very confident in your decision.

    I started off as a buy and hold investor in small caps and where I've consistently made big gains. Sitting in front of the computer is more compulsive of me and the 5-10% of my capital that I "play" with is traded but but the other 90-95% is usually in buy and hold stocks that I'm confident have bright futures.

    I can go on vacation for a month and not worry this way and if you have the ability(which many do) to find stocks with bright futures and can just buy them and hold them and make big gains and maybe take a few losses at the same time, I'd say you have a huge advantage over the guy who's stressed out over making consistent gains and essentially meeting quotas...add in to that mix paying more in slippage and having more paperwork to deal with, I'd take hitting homers anyday...even if you could do 20%/year(really really low return in my book) on a million dollars you can have a decent life. I'd rather invest $100k in 10 stocks that I think have bright futures and see 4 or 5 of them triple or quadruple while the others dwindle or don't move much either way and you're still going to blow away the guy who made 20%.

    Sorry for the rambling. :D
  5. Depends on the traders personality. Some cant handle a 25% win rate even if the winners are 10-1. Some get much anxiety going for 1-1 with a 70% win rate.

    There is no right answer.
  6. Hitting a homerun, as far as baseball is concerned, is usually a mistake. Players don't try to hit home runs, they try to make contact with the ball...sometimes they just do..
    Also, sometimes they fall flat on their ass swinging and missing.

    Bottom line: just try to make consistent contact with the ball, and you look like Tony Gwynn...Or, you can be Cecil Fielder..
  7. gimp570


    i think this is great advise.....

  8. gimp570


    Ty Cobb is in the hall of fame also.....

    but chicks dig the long ball
  9. Have you ever watched the movie Rounders? Canish the guy who grinded it out. The lesson of that movie was that he was always there to play. When you swing for the fence you leave yourself in situations that are difficult to manage and therefore can take you out of the game.
  10. I have this debate with my partner on almost a daily basis.

    He's a DAX scalper who suffers only a few losing day's a month. I'm an ex-scalper who's now a quasi position trader.

    If one has an edge then scalping is certainly the way to go. However for most traders scalping is just a way to justify taking quick profits while letting losers run.

    I contend scalpers are born and not made.

    On the other hand I believe most anyone can use rules to identify a trending market and through use of position sizing find way's to catch a big move.

    I'd rather trade less than more but my partner's take is he'd rather be flat overnight than positioned. I see it both ways.

    I don't oppose scalping as a method as much as I disapprove of the products people choose to scalp. WTF anyone would "scalp" ES or T-Bond's for instance is a mystery to me. For small scalpers liquidity is your enemy.

    Rather than compete for trade why not provide liquidity. Jeez, there's 8 zillion things to trade on the screen. Trader's should stretch their imaginations.......
    #10     May 24, 2007