Is it possible for a new trader to survive in this market
- Thread starter roumeo
- Start date
While this may be true that the largest % gainers are in bear markets it isn't necessarily true that the best opportunities are in going long. There are more down days in bear markets than up days and by their very nature the down moves in aggregate cover more distance than the up moves in total. It is also important to note on what time frame the opportunity exists on the big up days. For instance if you were a daytrader (and many on this board are) much of the opportunity of these days is neutralized because of the huge gap up. You could still make money as a daytrader on these days going long but the actual % opportunity might be very different than what is apparent from a static view of daily % increases that don't take the gap into account. A longer term trader who didn't position the night before would be in the same boat.
Worse, many people with good experience are just churning.
With the choppy momentumless environment now, there are fewer good setups and the best way to avoid the dispiriting negative reinforcement of profitless or losing trades is to trade less often and wait for the most optimal setups and wait for a more constructive and easier environment. This may not happen for a long time.
But that tack opposes the industry that caters to the independent trader and the massive effort it exerts to induce one to trade excessively. There is so much talk about the evil analysts, the nefarious market makers, the conniving insiders, and much of it is true. But if we examine how much we are bombarded on CNBC and trading sites with promotions sexy and sleek trading platforms and misleading notions of vast riches that await us, the daytrading brokerage industry is a rotten part of Wall Street also, as they are selling a a money losing trap to so many people.
If the big whales are not swimming and not being fed a fat diet of investment dollars, the tiny fish can't hitch a ride.
And as long as the whale bobs up and down or meanders this way and that way while it wastes and thins with age, I will be happy to trade on fewer occasions.
But I am a hoarder by nature and have an anti-consumer mentality.
One other thought. Right now the thing many lament is lower volatility. I believe that for traders to continue making $$ they need to seek out markets that provide that volatility. This may mean leaving the comfort zone of well-known issues and staking out new vehicles. My editorial is that this is probably one of the factors leading to the continuing increase in participation in the EMini markets.
Things are most certainly tougher these days than they have been in a long while... it will always be possible to "succeed" (whatever that means) in this market, but my guess is that the odds of success for newbies are much, much, much lower these days than they have been for a while... even older hands are having a relatively tougher time scraping out a living, and thats what I am basing my guess on...
