My dilemma - too good to be true? How long can I last?

Congrats on the good trades. It seems you've developed a sort of discretionary momentum/fading strategy. Here is my advice to you:

At some point in the future, you will experience a large(relative) loss as one of your trades inevitably goes the other way. How you handle this loss will determine your chances of being able to have success on a long term basis.

Making money is easy, dealing with losses is the hard part. Some people lose their nerve, start revenge trading, or fundamentally alter their once-successful strategy.
 
I know exactly what you mean about revenge trading. I did that quite often when I wasn't doing well and quit trading to start my law career. What I realized now is that because I don't let the winners run as long as I should I should not let the losers run too much either. Before I was holding on to losses longer than holding on to winners.

Now, still have hard time holding on to winners so what I do is definitely cut the losses as soon as possible. No more hoping and praying it will come back/down.

Alos, my loss max for the day is $3000. If I lose that, my friends (partners who put up the $) will come by pry me away from the computer to the bar. So far, I didn't have to endure one yet but I am sure I will one of these days. The market is never so predictable that I cannot avoid a big drawdown.

Anyway, the options I sold giddly at 2.35 is now at 3.00. I guess the MM did ok on this one as long he was able to sell more at higher prices.

Thanks for you advice!!
 
Hey, I'm going through a similar experience at this time!

One major difference though is that I've been trading on and off for over 10 years (as a net loser). In the last few months though, I have been consistently profitable and it's like there's a shift in the way I see the market. My trading style is similar to yours but the amount that I trade is still only a fraction of what you trade. I am starting to think "could this be it?", "have I finally arrived?". But I'm taking it slow because I also feel like I could blow it at any time.

I still hold a day job and trade in the morning before work. I feel like I'm close to making this a full time thing, but I'm still skeptical. One strange thing I noticed is that I am more afraid to lose than ever before.

Btw, congrats on your current success!
 
i am in a similar situation. To be honest....right now it is really easy. decent volatility, and the moves are easier to predict.

i am up 40% this year..it is great. I also use ameritrade...becuse most of my trades are concentrated swing trades of about 1000 shares. It is easy to program entries and exits...and there is no pressure to trade volume...well...i only move about 2000 shares per day anyway.

dont get cocky my friend...realize that gold, oil, copper, silver and half the stock universe are all going athe same direction right now...

it wont stay that way...capitlize on it while you can....stay humble.
 
If it goes well for you just keep on trading as you do. Dont listen to anyone trying to tell you that the success is only temporary.

Success is absolute. Just do what you do and dont change it as long as it works.

I personally dont day trade as I have no time for that. I'm a swing trader and I use the similar set of indicators - BB(20, 2), RSI(14), SlowStoch(26, 13), MA(50, 200).

(just curious) What BB periods do you use ?
 
yeah, i was going to say, don't get too cocky guys. it's much easier to make money right now b/c things are endlessly up, but if we do some sudden twists and turns, things may get rougher.
 
Cheetos,

Nice trades! Remember the old adage "Winners (trades) take care of themselves." Focus your effort into defense... winning streak can make a trader less atune to handling losses.

What you are going thru is not as atypical as you think? But you do have to monitor yourself... Good practice will be pulling a good chunk of profits out of the account if you haven't done so and keep constant conservative size for a while until you don't feel the euphoria.

Keep at it as long as the streak is going. Stop yourself immediately as soon as you feel you've started losing. NO BUT! Yes, stop on a losing note and don't try to scratch back. Reward yourself with a vacation and you can extend your winning streak next round.

Good trading.

KC
 
BTW, nice screenname. Remind me of Mark Weinstein in Market Wizards:

"Although the cheetah is the fastest animal in the world and can catch any animal on the plains, it will wait until it is absolutely sure it can catch its prey. It may hide in the bush for a week, waiting for just the right moment. It will wait for a baby antelope, but not just any baby antelope, but preferably one that is also sick or lame. Only then, when there is no chance it can lose its prey, does it attack. That is the epitome of professional trading. "
 
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