25 Years & $100 Million Profits... A to your Q's, Today Only

Great thread. Thanks for your opinions.

Yeah, that risk of ruin thing and not getting another chance always gets me nervous too.

OK. 2008 is here. Let's all go make some coin. P/L starts over this AM.
 
Thanks for a wonderful thread, gnome.

Would you care to respond to OldTrader's queries when you've a spare moment? Useful lessons for us all... Thanks.

Quote from OldTrader:

Hey Gnome:

Good thread. I've enjoyed reading it. And before I ask my question, let me just say that you're "da man" when it comes to video cards. You were a huge help to me, I know that. Thanks for that.

You mentioned you use a 4 point stop in the ES (or thereabouts I assume). You also mentioned that you prefer "swing trading" (I think). So let me ask a multipart question: First, when you say "swing trading", I'm assuming you mean multiday trades. But as I understand it, some people think of swing trades as a day trade where they might hold most of, if not all of the day. Which of those would you say would characterize your more typical "swing trade".

And then next, if you're making a multiday type of swing trade, how do you manage to begin with a 4 point stop? My personal experience is that if I'm trying to get on board a somewhat bigger type of move, then I have to take a somewhat bigger type of risk in terms of my stop. Granted, if my timing is excellent, I may have very little drawdown. But then there are those times where the basic idea for the trade is right, but I have some bigger type draw down in the beginning. I'm just thinking that in my case 4 points would have taken me out of alot of good swing trades of the multiday type of variety.

How do you manage to trade with a 4 point stop?

Thanks for your comments.

OldTrader
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Best wishes for 2008!
 
Swing in both senses. For the ES, trying to play for what appears to be 8 or more points potential... using the ES chart today as an example, let's say Friday's low of 1471 were tested today, bounced, and you bought at 1472. The "reason" for your trade would be "2X bottom with Friday's low" (likely 3X Dow bottom, too). And you know the market has the potential to rebound at least to the swing high of 1484... there's your "8+ points potential", and you'd have to risk a buffer amount for a stop-out.. that could be 4-ish points. And if you get shaken out on (what you hope was) a false downside break... you can put the trade back on.... risking a few points again that your "false break" determination is correct.

Same thing on a bigger scale for a stock, ETF, or mutual fund. Let's say the SPX retests the lows of 1370.. and you buy. You know the market has the potential to rally back to at least the declining tops line (currently 1500), and that such a "swing" move could take several days and maybe a few weeks. So, you try to hang on and hope there isn't too much counter pressure to shake you off.

In neither example would I call it scalping.

Nobody KNOWS anything (except Da Boyz inside at GS). The best you can do is make a strategic play where you perceive the R/R is good enough... then be disciplined about stops.

I cannot emphasize stop discipline enough. Over your career, the market will likely take a half dozen or so SERIOUS shots at taking back all you've made and even breaking you*... just like it did most of the tech buyers in '00-'03. This has to be factored into your overall strategy.

If you're curious... I've dodged most of those bullets myself... but not all of them .... at least not completely.

*meaning the market's going to change, but you may not do so quickly enough.
 
Quote from Jaxon:

Ever compare notes with Gil Blake, also a very successful mutual fund trader ?
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No, but he was a good one. Any idea what he's up to now?
 
Hi gnome,

Thanks for taking the time to answer questions. I see your 24 hours is up, you should request to have the thread closed or you will feel guilty of not answering the questions that will obviously keep getting posted :D

Cheers
 
Quote from Razor:

Hi gnome,

Thanks for taking the time to answer questions. I see your 24 hours is up, you should request to have the thread closed or you will feel guilty of not answering the questions that will obviously keep getting posted :D

Cheers
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Yeah... was up 6 hours ago... I thought it would be a 1/2 hour thing while I was putzin' around the computer yesterday... looks like the laugh's on me.. :D
 
Hi there
Missed yesterday due to hangover/self- induced coma :-)
Been toying with some mutual funds ideas myself and wondered what mutual funds do you trade or can one actively trade?
(not too much fees etc)
 
Gnome,
Great thread.

I only have two questions.

1/ How have you diversified your wealth out of the financial markets? Property? Bonds? Just cash?

and most importantly,

2/ What do you drive? :D
 
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