Is this a bad equity market?

ech15 · May 13, 2005

in reply to joeyata1

agreed! lets hope this closing low-gap up little-closing high pattern stop and have some clear direction with real follow throughs.

i have to also agree it is generally an aweful aweful market to be trading in for new incoming traders.

coolweb · May 13, 2005

howard,

Just two questions for you

"Are we in a bull market?"

or "Are we in a bear market?"

That will answer your follow through question I believe!

quintrix · May 13, 2005

The world real money is not here....

Q.

estrader · May 13, 2005

Quote from Nutzo:

I keep hearing experienced equity day traders here on ET saying that this is a bad market for new traders coming into the game.

What is everyone's comment on this?

I guess it is really bad compared to late 90's, when Dow ranges were like 300 points on a regular basis. Now you are lucky to get 100. So a lot of easy strategies don't work anymore. You have to come up with more intricate and riskier ones. Easy money is now harder to earn.

mr roboto · May 13, 2005

Quote from Spydertrader:

Opinions on the market "trading difficulty level" vary from trader to trader based primarily on their particular trading style or trading vehicle of choice. I cannot speak intelligently on how the current market dynamic effects scalpers or other types of intraday liquidity providers, as I have no experience in these areas. However, based on the system that I use, I have found current conditions to be no more difficult than in years past.

- Spydertrader

Spydertrader,

I trade an equity system that takes about 4-5 trades/day from a universe of about 3500 stocks. I am having my worst year since I started trading in 1998.... I would guess by your name that your system focuses on trading the SPY? Regardless, if you don't mind, I have a couple of "non-intrusive" questions about your method:

1. Is your system more of a "breakout/momentum" based system,
or is it more "buy weakness/sell strength"?

2. What is the avg holding period of your typical trades?

BloodTrader · May 13, 2005

When not wasting my time blowing smoke in chit-chat...

I primarily trade two long-only systems; one that makes money in uptrends and one that makes money in downtrends (countertrend trading). They both have a long backtest history and over 2 years of real time. One of the worst periods for both systems has been between last October and now.

I think this will soon change; otherwise I'll have to think there has been a sea change in the markets and it's time to go back to the drawing board.

m

Spydertrader · May 13, 2005

Quote from mr roboto:

I trade an equity system that takes about 4-5 trades/day from a universe of about 3500 stocks. I am having my worst year since I started trading in 1998....

Sorry to hear you have experienced reduced profits during this year. In December 2002, I experienced a similar situation while trading the SPY, DIA & QQQ. I empathize with the frustration you must feel.

Quote from mr roboto:

I would guess by your name that your system focuses on trading the SPY?

I used to exclusively trade the big ETF's - hence the alias under which I post. However, recent changes in the trading environment causing intermittent availability of certain ETF's for shorting has prompted me to educate myself on the futures markets. I plan to use my old ETF system to trade the YM or MR later this fall.

Quote from mr roboto:

Regardless, if you don't mind, I have a couple of "non-intrusive" questions about your method:

Feel free to ask anything you like.

Quote from mr roboto:

1. Is your system more of a "breakout/momentum" based system, or is it more "buy weakness/sell strength"?

Definitely, a breakout based system.

Quote from mr roboto:

2. What is the avg holding period of your typical trades?

If trading from the Long side, I currently use a 4 day hold period. I reduced the hold time from 6 - 8 days down to 4 last year in an effort to improve the number of profitable trades. Sometimes, I only hold for a day or two based on volume. For shorts, I rarely hold beyond intraday.

I hope you find the above information helpful.

- Spydertrader

chiguy · May 13, 2005

Quote from coolweb:

howard,

Just two questions for you

"Are we in a bull market?"

or "Are we in a bear market?"

That will answer your follow through question I believe!

yes......depends on the day..

Kicking · May 13, 2005

Don't know about individual stocks but action in the indexes suck especially intraday, I made a few small (increasingly smaller) intraday trades these past 3 weeks sometimes out of boredom and lost on 100% of those. Less opportunities for big and swift upmoves overnight as well , other than scalps shorts in indexes are total waste of time and money . It's May traditionnaly the start of a tough period through summer for me -and many others I gather - I plan to trade as little as possible and do something else.

mr roboto · May 13, 2005

Quote from Spydertrader:

Feel free to ask anything you like.

Definitely, a breakout based system.

If trading from the Long side, I currently use a 4 day hold period. I reduced the hold time from 6 - 8 days down to 4 last year in an effort to improve the number of profitable trades. Sometimes, I only hold for a day or two based on volume. For shorts, I rarely hold beyond intraday.

I hope you find the above information helpful.

Quote from Spydertrader:

Thanks very much for taking the time.
My system has tested well for many years and traded well until mid-January of this year, when VERY suddenly, the wheels seemed to have fallen off. After making 25-50% returns steadily each year, I am currently down about 5-7% YTD and I am trying to figure out what has changed, or more importantly, how to adapt. My system is also a breakout based system with an average length of about 4 days, and is based on EOD data, using only price and volume criteria.
So, it sounds as if we're both in the same ballpark in terms of method.

A few more questions, if you please:

1. Are your exits dictated by your system, or is there some discretionary aspect on your part?
2. How has the continuing decline in overall volatility affected your trading rules, other than a shorter holding period?
3. Do you enter trades intra-day based on intra-day data?

Again, thanks for any input, and feel free to ignore any or all of my questions. I certainly want to respect your right to protect any info that might compromise your edge, but it sounds like our methods are similar and I'm really curious why yours is operating normally, while mine
has stalled.

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