I stand corrected, I saw that also and was scrambling to correct it before anyone noticed. Up all night, not thinking or typing that well. K - looks like you would have to be one hell of a stock picker after all. I think 10 years is more realistic for people that are real big savers and aggressive investors. Nothing wrong with aiming high.
Its impossible to be profitable in trading as a retail trader
- Thread starter quant983
- Start date
Be careful when calculating and double check (or even triple check), because consequences can be very severe if you make a mistake in your trading models.
"Its possible to be profitable in trading as a retail trader"
Yes, if I could do it, some be able to eventually wear out the screens and your eyes and do it too, but it is so not easy. After you fine tune your methods, number of years goes by and you think "why couldn't I figure this out back then", cause you are your own worst enemy. Like I am manually trading whole day-today, it is only four hours and I am exhausted as I have not traded this long in long time. I have to keep getting up and take a walk, get some water to stay awake. I keep thinking of excuses of stopping. The old "excuses" I lost long ago of forcing trades not there though are gone, getting in early were stopped long ago, just wait it out, all those extra trades never worked out well.
Ongoing I always do is label "conditions" of what will STOP the signal from happening, it won't stop forever, but have to wait so many bars and at better prices. Support/Resistance -read up and study all the patterns. If there are none, then clear signal, I use time stops are for my methods, good winners never linger, so many bars need to lock in a tick, let someone else pay the fees and if in negative, target one tick to get out or at worse is breakeven. If you check out one minute ES starting 12:45 est, see how many hits near 2136.00, 9 times, but in first fifteen minutes I would not consider taking a buying signal, then after that I was buying as I have learned too much resistance, price often busts through. Price breaks lows by one tick then higher lows, I am positioned long.
Entries = risk, where one enters from the highs or lows plus so many ticks/points most of time work out well for me for playing "tight" trading, first hour usually more action.
Yes, if I could do it, some be able to eventually wear out the screens and your eyes and do it too, but it is so not easy. After you fine tune your methods, number of years goes by and you think "why couldn't I figure this out back then", cause you are your own worst enemy. Like I am manually trading whole day-today, it is only four hours and I am exhausted as I have not traded this long in long time. I have to keep getting up and take a walk, get some water to stay awake. I keep thinking of excuses of stopping. The old "excuses" I lost long ago of forcing trades not there though are gone, getting in early were stopped long ago, just wait it out, all those extra trades never worked out well.
Ongoing I always do is label "conditions" of what will STOP the signal from happening, it won't stop forever, but have to wait so many bars and at better prices. Support/Resistance -read up and study all the patterns. If there are none, then clear signal, I use time stops are for my methods, good winners never linger, so many bars need to lock in a tick, let someone else pay the fees and if in negative, target one tick to get out or at worse is breakeven. If you check out one minute ES starting 12:45 est, see how many hits near 2136.00, 9 times, but in first fifteen minutes I would not consider taking a buying signal, then after that I was buying as I have learned too much resistance, price often busts through. Price breaks lows by one tick then higher lows, I am positioned long.
Entries = risk, where one enters from the highs or lows plus so many ticks/points most of time work out well for me for playing "tight" trading, first hour usually more action.
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How many 5 years period in the US market since 1900 gets you 25% ROR every year?
I do believe there are profitable retail traders like profitable retail/do-it-yourself investors. Some great traders are hiding among us here.
I just want to point out that great investors like great traders are few and far in between. There are not that many of either around. For the rest of us, setting our sights a little lower would reduce disappointment and allows us to stay in the game a little longer.
Best wishes.
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You got to be kidding? You are not aware that the 90's were an insane parabolic rally - I had my money in funds through my 401K - I had at least 5 years with over 100% returns, I remember being bummed the one year it only returned 55%. Now look at 2008 to present - the market (NDX 100/QQQ) market is up over 313%, and that is not even adding compounding which will inflate that number massively if you are an investor in a fund. Don't you ever look at charts?
There are many periods where even the lower growth Indexes like the S&P 500 have many 5 year periods of growth over 25% per year. The 80, the 90's to 2000's, etc. etc.
There are many periods where even the lower growth Indexes like the S&P 500 have many 5 year periods of growth over 25% per year. The 80, the 90's to 2000's, etc. etc.
No offense, but let's look at the S&P 500 returns; in the period between 1928 and 2015, there were 87 5-years periods, I analyzed the average returns, there were exactly 3 5-year periods where the returns were >125%. If I relaxed the criteria to 100%, there were only 9 5-year periods of > 100% returns. So, the odds of anyone getting an average of 25% return from 1928 to 2015 were 3.4%.
Here is where I obtained my data:
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html
Of course if you are a great stock picker e.g. Warren Buffett, your odds could be much better. But I am no Buffett so I bought and held S&P 500 index funds since the 80s and I only got 1 5-yr period of >125% return during the past 30 years.
In any case, peace.
If you play both sides - long & short the sky is the limit. Being to diversified guarantees sub par performance. If you want to make the big money you got to take the bigger risks - like riding the hottest stocks in the strongest sectors.
Warren Buffet Quotes (since he was mentioned)
"Diversification is a protection against ignorance. It makes very little sense for those who know what they’re doing."
"I prefer to keep all my eggs in one basket and watch that basket closely."
Warren Buffet Quotes (since he was mentioned)
"Diversification is a protection against ignorance. It makes very little sense for those who know what they’re doing."
"I prefer to keep all my eggs in one basket and watch that basket closely."
I agree with you. Those of you that are smart at investing/trading can achieve much better result than the rest of us. After many years of buy and hold S&P 500 I still cannot afford my own Gulfstream 650 or a mega yacht.
However market perform is really not too bad. As an example, if someone opened a 401K in 1985 when he started working and put $10,000 into it religiously every year and invested all of it in S&P 500, by 2015 when he retired, he would have $1.8 millions in his 401K. Not enough to live like the rich and famous but can afford him a decent retirement lifestyle.
Regards,
Its impossible to be profitable in trading as a retail trader"
That's a horrible mindset. I can tell you it's not.
Sure, it's not easy...or everyone would be trading their own accounts from home and not have a 'real' job.
But trading is far from being anywhere near "impossible"
Like any field or endeavor in life...it kind of takes a special kind of person, for that specific kind of field or endeavor to truly succeed abundantly.
Some people are more cut out for 'success' in life, than others.
That's a horrible mindset. I can tell you it's not.
Sure, it's not easy...or everyone would be trading their own accounts from home and not have a 'real' job.
But trading is far from being anywhere near "impossible"
Like any field or endeavor in life...it kind of takes a special kind of person, for that specific kind of field or endeavor to truly succeed abundantly.
Some people are more cut out for 'success' in life, than others.
It's possible to be consistently profitable. Just ask the 5%, forget the noise from the rest. You'll find a fraction of the 5% on here but they will keep their trading secrets to themselves. However, they will throw out a zinger now and then. But they won't give up their whole strategy. Don't think one strategy will work for all situations. Buy and hold is so 1980s. It's easy to place a complex spread, it's the mitigation and exit that takes money off the table and into your pocket.