What's different now from 1997 and 1998...?

Discussion in 'Trading' started by neutrino, Oct 12, 2003.

  1. Now vs. Then

    I would like to know how and why is the stock market in 2003 different from 1997 and 1998, in terms of swing trading opportunities?

    We know that the opportunities will always be there as long as the market is active. However if the rules or the players change - the game will also change...
  2. Using the compound interest formula as a rough descriptor for swing trading's possibilities the following hold for me.

    The profit portion of the trading cycle has compressed to about half of what it was. For me the normal 6 to 8 days then is now 3 to 4 days.

    The profit per cycle has changed as well. There is an increase from 10 to 15% as a practical spread.

    The opportunities to trade have not changed but there is a requirement to loosen the culling standard to relatively low values. From 90 to 80th percentiles.

    The net shift by cutting the time in half and raising the profits by 50% tends to improve the swing trading climate.

    The most interesting aspect is how the investing routine has changed. My focus on the money streams I trade has shifted from a rotational one where I focus on a stream a day to a weekly routine where all my streams are cycled. I like it better for unknown reasons.

    There is little or no learning curve associated with this informatiom.
  3. omcate



    Most of the dumb money has been slaughtered in the past three years. The market may be more rationally. With less volatility, it may be easier for swing trading, and more difficult for daytrading.

    :p :p :p
    :D :D :D

  4. OT With regard to day trading, which is not the focus of this thread, the current yield a person can expect to pull is about three times the daily H/L for the current markets climate. During midday it is between 2 and 3x, at least for beginners. See a recent print for verification.

  5. that sounds like the biggest bunch of unsupported garbage I have read recently...

    is this you, "Jack", again.... with more psycho verbiage!??

  6. funky



    take a look at the DOW from 1900 to 1950. tell me that after the crash (1929-1933) we saw more or less volitility? more is the correct answer.

    take a look at the DOW from 1980 to 1995. tell me that after the crash (1987) we saw more or less volitility? more is the correct answer.

    history repeats itself all the time? why does this seemingly crazy thing happen? because humans have short memories. you see it in everything....politics, friendship, etc... AND greed.

    in fact, take a look at ANY chart where price was substantially moved in a relatively short period of time. after the movement we had more volitility. think to yourself why this happens. then you will understand the answer to his question.
  7. If we assume that the public is still away from the markets, then the markets should be less efficient and therefore offer more trading opportunities from exploiting the inefficiencies... but of course I might be wrong!
  8. You would be surprised to learn that these are the current statistics in regards to current volatility and historical volatility:

    Over the last 3.5 years, the frequency of a MONTHLY move in which there was OVER a 10% ( from low to high or vice-versa ) was 41%, or roughly 5 out of 12 months.

    On a historical basis, over the past 54 YEARS the market has averaged a monthly move of > 10% just NINE PERCENT OF THE TIME, OR ABOUT ONE MONTH OUT OF THE YEAR!

    P.S. The last time that we saw some very high frequency of monthly moves > 10% was 1973, 1974, 1975.

    And those years averaged 25%

    Food for Thought!

  9. gimp570


    my thoughts exactly!

  10. Pabst


    That's one of the best post's ever on ET!! Can you provide some % ATR data over a multi decade period. Seems to me that a 2pt range in SP was very much the norm when the index was trading in the 200.00's in the 1980's. That equates with todays 10pt ranges. Can you take your anti volatility thesis of further.

    #10     Oct 13, 2003