Quote from steve46:
Oh so Rico;
Hey, I understand your comment. I think a swing trader who has good entry skills is going to weather the storm easier than an intraday trader. Most intraday traders can't keep a realistic stop. They get anxious and get washed out early. Swing trading you have to give your trade some room to wiggle. How much depends on the market, but if you look at how B1S2 does it, I think you will see that he gives his trade a wider stop than you might as an intraday trader.
I think you are correct as regards use of money during what I call a "bracketed market" (chop)..I think however that it depends on the individuals skills. For instance. I have some skills and if I am able to identify a specific kind of bracket market, I am not adverse to trading around a longer term position. I lot of guys do this profitably.
As regards commissions, well professionals generally have setups that you can't beat. So no matter what kind of commish you have, if you aren't pro you're paying significantly more than those guys. If you are trading more frequently, you have to overcome that added expense. Again it is (in my opinion) a matter of how good you are. If you have real talent and know how to restrict your activity to high % trades, then it isn't as big a factor.
On the subject of equity curve, I think it depends more on the details of your system (your style). When I was active, our office analyzed individual performance using a "Z" calc. This recorded the number of winning and losing streaks and our risk manager tried to advise us on how we might improve by diversifying our approaches (time frame mostly). What I learned from my own performance record was that it was better for me to combine longer and shorter term trades. To do this, I used to trade indexes short term (intraday), bonds and currencies longer term.
Just from my own experience, it seemed that new traders coming into my office did better when they incorporated a longer term trade into their books.
Good luck to you sir
Steve
Firstly, thanks for the discussion. It's become somewhat of a rarity, mixed between bashing, promoting, stupidity, evangelism, absurdity, and rudeness on ET.
Most intraday traders can't keep a realistic stop. They get anxious and get washed out early. Swing trading you have to give your trade some room to wiggle. How much depends on the market, but if you look at how B1S2 does it, I think you will see that he gives his trade a wider stop than you might as an intraday trader.
Stop "wash-out"s are not an indication of anxiousness. For intraday trading, In addition to being part of necessary risk management, they can also be a means for controlling exposure risk. It is not prudent for a hi-freq intraday trader to allow the same wiggle as an intraday swing trader. Just as it would not be prudent for a longer-term swing trader to use stops based on a 1m chart. The true measurement of trade success is not the PnL for a given trade, but whether or not the trade was executed according to plan. Outlier trades happen anyway. IMO, deviating from a trading plan in effort to "force" the outlier is not good trading and produces inconsistent results. BTW, I *think* B1S2 considers himself a position trader, at least for purposes of this journal.
if I am able to identify a specific kind of bracket market, I am not adverse to trading around a longer term position.
This is called hedging in my book. It requires use of a different instrument -or- a completely separate account. Back to the original contention that retail swing/position traders stand better chance of success vs retail intraday traders... IMO, concentration, not diversification is a crucial technique for the smaller retail intraday trader. When in doubt, get out (or reverse). The mere thought of a hedge for an intraday trader suggests significant doubt. Again, jmho.
So no matter what kind of commish you have, if you aren't pro you're paying significantly more than those guys. If you are trading more frequently, you have to overcome that added expense. Again it is (in my opinion) a matter of how good you are. If you have real talent and know how to restrict your activity to high % trades, then it isn't as big a factor.
True. Retail pays more commish than pro. And the numbers are meaningful. But commish is just a cost of doing business. Assuming commish is not the difference between success, failure or b/e, it is not reason to restrict or abandon a successful style/strategy of trading. I'll gladly "exchange" $4 for a 5,10,20,50, or 100 dollar bill. I'll give you $4 because
right now, I *think* I know something you don't. Or I *think* I know exactly what you know. As consequence if Im wrong I'll pay you an additional fee, exact amount to be determined. Regardless, you keep the initial $4 "exchange" fee. The fact that someone else only pays $1, with the exact same consequence, should have zero influence as to when or how often succesful strategies are used.
Just from my own experience, it seemed that new traders coming into my office did better when they incorporated a longer term trade into their books.
I understand that. Me, I thrive for the day-to-day sport-like competition. Took me some time to figure out. When you find a style that fits, vs fitting into a style, you know it.
Osorico
JJ, thanks for the words. FWIW, I stick to mindless drivel games. Go Fish, Crazy 8s, and Wii.
