Taking 410K to 4million by Year End 2010

[NoDoji]

Quote from NoDoji:

I suggest he watch for momentum stocks to reach extremely overbought/oversold conditions, then put on an option swing trade. As an example SHLD is getting ripe, IMHO. Neke could put on a $30K or $40K position with a 50% stop loss and hold it for reversion to the mean. SHLD has large swings, so risking $15K or $20K he has a strong chance of gaining $50K-$100K or more, depending on which month he plays and how long he's willing to hold.

The next trading day (1/19) from this post, SHLD indeed became 100% overbought. On 1/20 it opened gapped down, strong pullback signal (the shorts were squoze, so to speak). Feb $105 puts traded around 5.50 near the open. 70 contracts with 50% stop put less than $20K at risk. Value as of this Friday's close was already $42K.

Don't even ask why I didn't trade my own call. I won't touch options with a spread like SHLD. But Neke has higher risk tolerance, so I thought it was a solid play since he started his journal saying he wanted to do more swing trades.

 

[ChkitOut]

Quote from Red_Ink_inc:

While I am not certain. I suspect he made a lot of his dough in periods of above average volatility. We are in a period of low volatility (though it may pick up). There just aren't as many countertrend bounces in low VIX environments.

That seems to be what he looks for. In low volatility things just keep grinding in one direction.

In other words the market has changed. Change with it or accept the consequences.

That may be it, maybe not, but good points nonetheless.

 

[crash n burn]

Quote from Red_Ink_inc:



In other words the market has changed. Change with it or accept the consequences.

i once had a phenomenal mentor which was a former cboe trader.

one of things he first taught me was:

if you've developed a certain trading method that appears to be working flawlessly, don't expect to keep performing for long time. you'll have to adapt constantly and failure to do so it will result in dramatic failure.

and i thought to myself, wtf does he mean? at that time i was reaping incredible rewards from an option trading system that i developed which constantly netted 20-50% per month. i still remember like it was yesterday. on january 2nd, things started on the wrong foot, but i thought, it is ok, it is just a normal draw down. on the second week of january, i became apprehensive. on the third i lost control and started increasing size to offset the earlier losses. on the 4th, i blew up in tears.

only then i realized what my mentor words really meant.

 

[Now is Now]

The entry point is price...the exit point is price.The end result is the difference between the two.

Can somebody explain to me why a clock is so important?


NiN

I wish you well ,Neke....

 

[Billybob543]

Quote from goldhombre:

.....Lets just hope Neke has enough money left over to pay the taxman from last year's wins

This is the best point I have seen so far.

There will be severe ramifications to Neke blowing up, if he does. The IRS will want their cut of last year's profits irregardless of whether Neke blows up or not. Personally, I would take out my taxes owed for last year, today.....just in case.

Then again, personally, I would have taken the money and ran when my account hit $450k. The meaning of losing almost 200k within the span of a month will begin to hit you if your account hits the 200k mark. Think about all the other opportunities you could have exploited with the money.

 

[jack8031]

Neke is doing everything a good trader
must not do,like averaging down on losers,revenge trading,putting all the $$ in one position,failure to learn from past trades/keep repeating same mistakes.Its his style and big risk taking,huge profits and losses make this thread sexy.

 

[konviction]

Quote from Billybob543:

This is the best point I have seen so far.

There will be severe ramifications to Neke blowing up, if he does. The IRS will want their cut of last year's profits irregardless of whether Neke blows up or not..

I thought you only pay taxes on the money you withdraw from the broker account?, no?

 

[Billybob543]

Quote from konviction:

I thought you only pay taxes on the money you withdraw from the broker account?, no?

Wrong. The IRS will consider has trades to be short-term capital gains if held for less than one year. Taxes accrue when the positions are SOLD. When you withdraw the funds has nothing to do with it, unless it's a retirement plan.

 

[Pension_Admin]

Quote from konviction:

I thought you only pay taxes on the money you withdraw from the broker account?, no?

Hmmm...I don't know how the US tax system work, but I think if you only have to pay tax when you withdraw from your account, then there is a tax loophole.

I heard that if a trader file her tax under the trader status, then she is treating herself as a corporate entity in which she will be required to pay corporate tax for the gain regardless if she withdrew the money or not. I think the withdrawal with be treated like dividend income which is again subjected to tax. Anyway, I am not 100% sure. So, it's best to ask a US tax accountant regarding this.

PA

 

[TraderZones]

Quote from Billybob543:

Then again, personally, I would have taken the money and ran when my account hit $450k.

Ah, 20-20 Hindsight...