Lost half this year's profits bottomfishing... lessons learned

[kmiklas]

A man has to have experience and he has to pay for it.

Parlay everything that you learned into massive gains. The rest of this year will have incredible volatility... don't forget that there's an election in November!

I'm personally impressed at how hard you fought, and that you went for it. You came out with a black eye; far better than riding pine during this historic event. More important is that you have the brains to study the lessons that the market gave you. That's the key: never lose the lesson in any trade.

 

[ironchef]

@MrScalper, one of my all time favorite posters, told me in another thread when I asked for trading advice: Trading is like a cheetah hunting its prey.

It completely changed my thinking.

Why?

Some interesting statistics regarding cheetah hunting:

Cheetahs
The fastest land mammals, cheetahs have an excellent hunting success rate – an average of almost 50%. Happier in wide open grasslands where visibility is good, cheetahs can run at speeds of around 90 km (almost 60 mph!)

If you trade like a cheetah hunting, you don't need high win rate to make a good living.

 

[kmiklas]

Why?

Some interesting statistics regarding cheetah hunting:



If you trade like a cheetah hunting, you don't need high win rate to make a good living.

Perhaps cheetah hunting correspond to ULL/HFT trading? Highest speed, right? They see an opportunity, and seize their prey with an incredible burst of speed--faster than any other on earth.

 

[KCalhoun]

And also a rabbit duckling into safety at first sign of trouble.. tightened up trailing stops to look in profits now in TVIX SDOW FAZ TZA SRTY etc

 

[ironchef]

Perhaps cheetah hunting correspond to ULL/HFT trading? Highest speed, right? They see an opportunity, and seize their prey with an incredible burst of speed--faster than any other on earth.

50% success is sufficient to make a good living if you select your high value targets carefully.

 

[deaddog]

50% success is sufficient to make a good living if you select your high value targets carefully.

I made a living with a 37% win rate. (2.5 to 1 reward to risk) risking 1% of my capital per trade. Couple of trades a week.

 

[ironchef]

I made a living with a 37% win rate. (2.5 to 1 reward to risk) risking 1% of my capital per trade. Couple of trades a week.

What instrument(s) do you trade?

 

[deaddog]

What instrument(s) do you trade?

swing trade equities. when I'm bored or have to stay home I day trade leveraged index ETFs.

 

[FriskyCat]

BINGO BINGO . perfect example. Soxs(3x sox bear fund was $16 in feb when the sox was at its ath's) Sox still 10% of its ath's yet soxs was down 50% from feb. The erosion in those are incredible . You can only buy those when the rising nicely . Its not different than playing options

The graveyard of failed/failing 3x ETF's over the past few months is remarkable. Look no further than the JNUG/NUGT for a great example of how daily rebalancing in extreme volatility can kill both bull and bear side of these things, regardless of where the underlying eventually ends up. And yes, SOX or QQQ or other leading indicies, similar story, but a drip, drip, drip effect. That said, the "compress and explode" patterns on them are what I try to look for.

 

[KCalhoun]

I sold most of my swing trading inverses today starting premkt to lock in gains from last Thursday & Friday entries I'd held over the weekend.

I'm trying to take action on lessons learned, great to see it paid off.

Here's today's trades