Daytrading During A Recession

[rs7]

Originally posted by vhehn
"Possibly we should have a chat/thread set up at ET, and invite as participants/moderators those who 'traded' through the early 70's to describe their experiences, before we lose all that valuable info.

lol. nothing is the same.think about it.there was no internet.there were no computers to speak of.there was no ability to daytrade like we do now.there were no instant charts by the click of a button on the internet.there was no fundamental info with the click of a button.there was no cnbc.
that is why the moves are so fast now.everyone gets the info at the same time.

Very true....and we don't have to look to the 70's for this either. I recently came across an old issue of PC Magazine. Dell had their back page fold out ad for the "new pentium 60". What they did not have was a web address. This was from the ancient year 1993.
CNBC (fnn) did not have "real time" quotes 4 years ago. FNN was around in the mid eighties, but I don't think anyone was watching except Ron Insana's family. And maybe the people that fitted that great hair piece

 

[bundlemaker]

Early in this thread Jorge opined about how lousy it would be for volatility if there simply was no news. Actually, the cleanest, most easily traded trends, occur with no news at all. Part of my trading plan calls specifically for NOT trading a stock in the news. This eliminates big, nasty surprises. IMNO, you guys concerned about this are probably trying to hit home runs, when the big money is made in whacking out singles and doubles (just like star ball players and market maker/specialists).

 

[canyonman00]

Originally posted by trader88
I was just wondering if daytrading (stocks) full time during a recession is a viable way to make a living. My main concern would be the level of volatility and volume during a recession. Maybe longtime traders like rs7 or Don Bright who post here on ET could give some insight into this.
Thanks.

My question to you is, do you believe this is a recession? I have been in the markets since 1983. I have been actively managing my own portfolio since 1996. And while I could not address major funds management through a portfolio, I could talk a little about time blips to the downside.

I think there was a need to name the swings of multiple quarters and the only thing that could be equated by those who had never been there, was the term "recession." I think that two, three, even four quarters of corrections are at hand. The time for industry group, use the multiple of valuation pricing strategy is giving way to learning how to read a company's balance sheet correctly. But never fear, that too will past.

We have little patience for much today. Ever faster profit is the name of the game. Throw in shortcuts where appropriate and wallah. I too am guilty of this to some extent. So day trading individual stocks has slowly become a big portion of what I do (for now).

It has required me study and lean how to handle shorting (puts) better. And my trading techniques are evolving and adapting to match the conditions at hand. Use your tools and find your way through all the noise. Don't expect to be perfect in every trade and its execution. Play downside as well as upside and I believe you could make a living with day trading.

 

[trader99]

Yep. I was borned in the 70s so I wouldn't know personally what the markets were then . haha.

But from history and my professioanl background in the institutional world, I can say this: Today's market are a lot bigger than ever before. Perhaps in the 60s and 70s, a $100M was a lot and $1B fund was huge. Today, two guys in a garage can manage a $100M hedge fund with a few computers, secretary, and a trader. And a $1B fund can be run with as few as 15ppl. And the giants like Janus,Fidelity, Pimco, Putnam, etc. manages HUNDREDS OF BILLIONS(some approaching a trillion dollars!).

There's just so much more capital awash in the market and more and more of them are trigger happy(which really helps the short-term daytraders).

So, volatility is here to stay I believe. Unless, every single Dick, Jane, and Tom in America withdraw from their 401K. Highly unlike but then again knock on wood. hehe.

As a prop trader now, I love these markets because you can move in and out with decent shares and make decent money too if you are quick. So, daytrading,swing trading, position trading, and investing has to do LESS with the market and MORE with YOU.

If you are a bad trader, then given a good market you can only make so much. I think the dedication, time, discipline you put into trading will be far more valuable than asking if this a good market to enter the trading profession. It's always a good time or always a bad time. Up to you.

As someone once said,"Luck is opportunity meeting preparation." If you are not mentally prepared then it doesn't matter what markets we are in!!!

good trading to all!

99

 

[Janitor]

<hr><b>Actually, the cleanest, most easily traded trends, occur with no news at all. </b><hr>

so true. i've gone long on stocks where good news came out, sent the stock up on a spike, the spike sold off, and the trend that would have got me to my target was broken. often, i don't even like GOOD news.

 

[JORGE]

My concern about a lack of news pertains only to my specific style of trading. I trade intraday only and most of my success comes from trading stocks with news from the previous afternoon. I do not care whether they open up five or down ten, as long as they show an easily identifiable trend or base and break out one way or another. While the last several weeks have been ideal conditions for this I do worry that we will enter a period when volatility drops off to the point where stocks trade in tight ranges for extended periods of time offering little in the way of intraday opportunities. Hopefully this does not happen, but I am the type of person who gets nervous when things are going too well.