I truely believe the coming bear market will rip the day trading community to pieces. Before all is said and done the general public will hate the stock market and volatility will die thus strangling much of the day trading community. Look at the army of day traders swift and title have assembled to scalp for nickels and dimes with no money down. only well capitalized traders with longer time horizons measured in days and not minutes and seconds will make it. The public has had a love affair with stocks for 25 years and we've not seen any true stock capitulation during that time period. Good luck to all
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The coming bear market could change day trading
- Thread starter monstercat
- Start date
You know that volitility INCREASES as the market drops dont you??
Quote from monstercat:
I truely believe the coming bear market will rip the day trading community to pieces. Before all is said and done the general public will hate the stock market and volatility will die thus stangling much of the day trading community. Look at the army of day traders swift and title have assembled to scalp for nickels and dimes with no money down. only well capitalized traders with longer time horizons measured in days and not minutes and seconds will make it. The public has had a love affair with stocks for 25 years and we've not seen any true stock capitulation during that time period. Good luck to all
Really? The 50% drop in S&P 500 and 80% drop in Nasdaq from 2000-2002 wasn't a real bear market? I'll be darned.
Back in those "low volatility," pretend bear market days, the VIX was sometimes seen in the 40s.
Back in those "low volatility," pretend bear market days, the VIX was sometimes seen in the 40s.
Quote from monstercat:
The public has had a love affair with stocks for 25 years and we've not seen any true stock capitulation during that time period. Good luck to all
Yes it increases initially but once the bear takes hold and people leave the game volatility dies.In essence the thousands of black boxes cancel each other out and movement becomes tougher.
One must remember that day traders are only a very small part of the picture.
It is in the best interests of the exchanges to keep their money machine running.
Personally, I think that there will be more fear and greed, thus creating quite a bit of shifting around.
Furthermore, there are few alternatives for money.
Real estate, commodities, and bonds will be unattractive as well.
Which leaves stocks as being a choice by default.
Furthermore, the long and short game will be played even harder,
as there is far more money in hedge funds than in previous periods, and the short sale rules have been relaxed.
Also the exchanges of the world are consolidating, and transaction costs will be dropping.
Trading has only just begun, as long only will be out of vogue.
It is in the best interests of the exchanges to keep their money machine running.
Personally, I think that there will be more fear and greed, thus creating quite a bit of shifting around.
Furthermore, there are few alternatives for money.
Real estate, commodities, and bonds will be unattractive as well.
Which leaves stocks as being a choice by default.
Furthermore, the long and short game will be played even harder,
as there is far more money in hedge funds than in previous periods, and the short sale rules have been relaxed.
Also the exchanges of the world are consolidating, and transaction costs will be dropping.
Trading has only just begun, as long only will be out of vogue.
I'm looking for a bear market similair to japans from 1989-present.It can be argued 2000-2003 was a correction in a giant bull market. If it were a true bear market we would have never rebounded to new all time highs in the dow and s@p after the greatest bull in history(1990-2000). Time will tell
In 1974 we went to 7 times earnings and 1 times sales. That would require a 50-70% drop to get us there.
When order flow stops coming into the market the daytraders who haven't gone through such a period and haven't factored it into their business plan/can't afford to sit out for 8 or 12 months will probably blow out. The churn shops will see the money that the traders made on the way up and the way down as money they can take for themselves via commisisons and they will encourage traders to blow out doing lots of volume. My plan is to try to take as much money out in the early, highly volatile bear market, such that if the game gets too hard because of a lack of customer orderflow I will just sit on the sidelines and wait for more favorable conditions to come around.