New guys, now is not the time

D

Dustin

After yet another dull open I got to thinking about how hard this market would be if I was just starting out.

You guys that are not profitable, whether it's been 2 months or 2 years, need to know that right now is a time for defensive trading. This market offers very few opportunities daily as compared to the last couple years. If I had to start over in this environment I would have failed.

Months like these are for practice, to sharpen your skills. If you can develop strategies that break even, or even make a little in todays market then when volatility hits again you will be well positioned. The hard part will be surviving until the opportunities return. It may be years, but I really hope not.

There will be those that say you just have to adjust to the market, there are always opportunities etc. This just isn't the case (regarding stocks). Most good traders I know will make 20-40% of last years earnings and will be content with that, including myself.

So this is basically a pep talk. Stick with it. Protect your capital. Grind it out, and better days will come.


p.s. TZ please don't puke all over my thread.
 
Wouldn't this market be ideal for fade strategies? Ultimately, the market is either trending or ranging. I agree trending markets and high volatility are opportunities for huge gains if your strategy is "trend following", whether it's on a minute, hourly or weekly chart. However, during times of "choppiness" contraian strategies flourish.

In a nutshell, if one can properly time the market condition (trending vs. ranging), then there are opportunities for good earnings. Some traders are "die hard" trend followers or "die hard" contraians. If that's the case, then the best bet is to rachet down the size of one's trades when the market is in a cycle that is contrary to your strategy. Once (or if) the market condition changes, then one would rachet up the size of the trades.

I know of no other way to play this game...

Walt
 
Quote from Dustin:

After yet another dull open I got to thinking about how hard this market would be if I was just starting out.

You guys that are not profitable, whether it's been 2 months or 2 years, need to know that right now is a time for defensive trading. This market offers very few opportunities daily as compared to the last couple years. If I had to start over in this environment I would have failed.

Months like these are for practice, to sharpen your skills. If you can develop strategies that break even, or even make a little in todays market then when volatility hits again you will be well positioned. The hard part will be surviving until the opportunities return. It may be years, but I really hope not.

There will be those that say you just have to adjust to the market, there are always opportunities etc. This just isn't the case (regarding stocks). Most good traders I know will make 20-40% of last years earnings and will be content with that, including myself.

So this is basically a pep talk. Stick with it. Protect your capital. Grind it out, and better days will come.

p.s. TZ please don't puke all over my thread.
More...

I agree up to last week, but this week volatility has returned and things are starting to get interesting again. Sure, we were spoiled by the insane volatility in 2008 and up to March of 2009, but this is still a much better market to trade than any time between 2004 and July 2007. The days of the internet bubble and financial crisis are 2 extremes that we witnessed within 8 years. Most of the time, markets are fairly calm like they are now.
 
Nice to hear that from one of the more experienced traders on this board, i have been tearing my damn hair out the last few months, i have been trading for 5 years now and nothing works anymore, literally everything just went to shit overnight on me, and it is very frustrating. Nothing i try makes money anymore, problem for me is i never got to the stage where you are where i have a whole lot of money banked, so i really do not know what to do to now to keep me in the game and still survive at the same time.

Are you still making enough in this garbage where you dont have to draw down on previous earnings?

Quote from Dustin:

After yet another dull open I got to thinking about how hard this market would be if I was just starting out.

You guys that are not profitable, whether it's been 2 months or 2 years, need to know that right now is a time for defensive trading. This market offers very few opportunities daily as compared to the last couple years. If I had to start over in this environment I would have failed.

Months like these are for practice, to sharpen your skills. If you can develop strategies that break even, or even make a little in todays market then when volatility hits again you will be well positioned. The hard part will be surviving until the opportunities return. It may be years, but I really hope not.

There will be those that say you just have to adjust to the market, there are always opportunities etc. This just isn't the case (regarding stocks). Most good traders I know will make 20-40% of last years earnings and will be content with that, including myself.

So this is basically a pep talk. Stick with it. Protect your capital. Grind it out, and better days will come.


p.s. TZ please don't puke all over my thread.
More...
 
Having the same experience this year as Dustin. Been trading actively since '99. I made 20-30% a year most of those years and cranked in a nice 100%+ last year. You had to be a little ballsy last year, but seemed like the money just fell into my account.

This year, being ballsy has resulted in my being neutered several times! I'm backing way down on risk and going into grind mode. Ya hafta survive...

Good trading to all.
 
Quote from jones247:

Wouldn't this market be ideal for fade strategies? Ultimately, the market is either trending or ranging. I agree trending markets and high volatility are opportunities for huge gains if your strategy is "trend following", whether it's on a minute, hourly or weekly chart. However, during times of "choppiness" contraian strategies flourish.

In a nutshell, if one can properly time the market condition (trending vs. ranging), then there are opportunities for good earnings. Some traders are "die hard" trend followers or "die hard" contraians. If that's the case, then the best bet is to rachet down the size of one's trades when the market is in a cycle that is contrary to your strategy. Once (or if) the market condition changes, then one would rachet up the size of the trades.

I know of no other way to play this game...

Walt
More...

There haven't been many opportunities on either side of that coin lately. I scan the whole market all day for either setup and can't even populate half of my charts with possible trades.
 
Quote from marketcynic:

I agree up to last week, but this week volatility has returned and things are starting to get interesting again. Sure, we were spoiled by the insane volatility in 2008 and up to March of 2009, but this is still a much better market to trade than any time between 2004 and July 2007. The days of the internet bubble and financial crisis are 2 extremes that we witnessed within 8 years. Most of the time, markets are fairly calm like they are now.
More...

I agree this week had more activity due to the market finally declining a bit. I prefer down markets to up markets by a landslide. I disagree that these events are extremes. You had opportunities in '97 (Asia), '98 (LTCM), '99-'02 (bubble w/ pop), '07-'09 (crisis). I am eagerly awaiting the next death spiral.
 
Quote from Steelers Baby:

Nice to hear that from one of the more experienced traders on this board, i have been tearing my damn hair out the last few months, i have been trading for 5 years now and nothing works anymore, literally everything just went to shit overnight on me, and it is very frustrating. Nothing i try makes money anymore, problem for me is i never got to the stage where you are where i have a whole lot of money banked, so i really do not know what to do to now to keep me in the game and still survive at the same time.

Are you still making enough in this garbage where you dont have to draw down on previous earnings?
More...

Yep I feel your pain. 4 days out of 5 are a waste of time. I will still make more this year than I could make doing anything else, but it feels like very little for so much effort.
 
most days there is a minimum movement of 10 ES points, why are you guys calling that low volatility?

this week the range is already up to 20 points.

doesn't look like low volatility at all:confused:
 
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