The concept of house money, selling half when the price doubles and letting it ride..

[Raheel Shaikh]

Do you see yourself as a trader or an investor?

You know it dawg,
Treating risk like a trader and profits like an investor

 

[Magic]

Just like investors are told to hang on to their winners, the same can be said of hanging on to losers if one doesn't need the money right away in the expectation the loser will eventually turn a profit. There are plenty of solid companies whose share price dive from time to time and, instead of panic selling it makes sense to hang on.

Timing of exits is another topic entirely. I agree taking signals from PnL makes no sense.

We were talking about the delusional idea that a gain or loss isn't real until a trade concludes. Equity fluctuations during the lifetime of a trade changes everything; co-variance matrix of current positions, leverage ratios, optimal volatility target, etc.

 

[deaddog]

There are plenty of solid companies whose share price dive from time to time and, instead of panic selling it makes sense to hang on.

As a trader you can make money by selling and re-buying. How does it make sense to hold a stock that is falling?

 

[VicBee]

Timing of exits is another topic entirely. I agree taking signals from PnL makes no sense.

We were talking about the delusional idea that a gain or loss isn't real until a trade concludes. Equity fluctuations during the lifetime of a trade changes everything; co-variance matrix of current positions, leverage ratios, optimal volatility target, etc.

You could very well take your trade through a sifter to fine parameters to explain why a gain or loss is very real even before a trade concludes. I don't doubt that financial wizards can turn shit into gold and make something out of nothing, but as far as I'm concerned, my bottom line is what's real and time value of money is the key parameter that motivates my buying and selling. Nothing is until it's in my pocket.

 

[Magic]

You could very well take your trade through a sifter to fine parameters to explain why a gain or loss is very real even before a trade concludes. I don't doubt that financial wizards can turn shit into gold and make something out of nothing, but as far as I'm concerned, my bottom line is what's real and time value of money is the key parameter that motivates my buying and selling. Nothing is until it's in my pocket.

What is your PnL in raw $$? I don’t doubt you trade this way; small retailers have a bunch of inefficient ideas like thinking fair marks are meaningless until you hit the exit button. Doesn’t make it right. Almost all of the bigger traders I know understand the math behind portfolio optimization to a decent extent.

If your trading works the way you want it to then more power to you. But if you want to get better you should consider a more accurate view. Also spreading around inefficient adages can hurt the new guys.

 

[murray t turtle]

That's the part I question. Why does it make sense to hold thru a 30% retracement? Especially in a ROTH ( Up here in the frozen north a TAX Free Account). At one time commissions were a good excuse but not anymore.
There is very little downside to moving to cash when the market beings a downtrend.
You said yourself that you rarely let a holding turn into a loss. The market doesn't know or care where you bought the stock. If it drops 30% you have lost 30%. Oh yeah it then has to go up about 45% to break-even.

%%
Makes perfect sense for most funds;
as IBD[books] puts it, ''can always tell when an elephant gets into a bathtub.''
Me, like to do it both ways, [trend rides + exits....] ETFs/Roths;
because it can be to hard to get back in with perfect timing/limit orders. Mostly in good above aVerage trenders [mostly LOL]. Like a muni bond ladder,but with some of it , ETFs
And stuff can happen; i never thought moving my account, but happened this year '' SCHW, they said don't trade, during process'', so i would have missed out on about 50 days trend. And MSFT millionaires made millions......., by riding a good trend.
Typical market /more than one good answer.

 

[deaddog]

%%
Makes perfect sense for most funds;
as IBD[books] puts it, ''can always tell when an elephant gets into a bathtub.''
Me, like to do it both ways, [trend rides + exits....] ETFs/Roths;
because it can be to hard to get back in with perfect timing/limit orders. Mostly in good above aVerage trenders [mostly LOL]. Like a muni bond ladder,but with some of it , ETFs
And stuff can happen; i never thought moving my account, but happened this year '' SCHW, they said don't trade, during process'', so i would have missed out on about 50 days trend. And MSFT millionaires made millions......., by riding a good trend.
Typical market /more than one good answer.

Sounds like you are both a trader and investor. I'm not trying to put a label on you, just understand what you are doing.

Some long term, some short term, some bonds, etc. Are you keeping track of the different strategies and which one would you pick if you could only have one?

 

[murray t turtle]

Sounds like you are both a trader and investor. I'm not trying to put a label on you, just understand what you are doing.

Some long term, some short term, some bonds, etc. Are you keeping track of the different strategies and which one would you pick if you could only have one?

%%
ALMOST never buy muni bonds; but ETFs like SPY,spxl,QLD..... I meant, like a 7 foot ladder; would step into/enter 5 times, or multiple times ,no commissions. [I think those muni bond buyers layer or step in to different dates, like a step ladder]. NOT a bond buy ad /LOL
[One of the better]; 200 day moving average still helps a lot/ trend rides; but i keep in mind most of the stock market millionaires buy every month for 40 years I do some inverse ETFs like SPXU, SPXS,sds........ Make more with longs, but doing smaller inverse/ keeps me from medddling with good trending ETFs.

 

[deaddog]

%%
ALMOST never buy muni bonds; but ETFs like SPY,spxl,QLD..... I meant, like a 7 foot ladder; would step into/enter 5 times, or multiple times ,no commissions. [I think those muni bond buyers layer or step in to different dates, like a step ladder]. NOT a bond buy ad /LOL
[One of the better]; 200 day moving average still helps a lot/ trend rides; but i keep in mind most of the stock market millionaires buy every month for 40 years I do some inverse ETFs like SPXU, SPXS,sds........ Make more with longs, but doing smaller inverse/ keeps me from medddling with good trending ETFs.

So you're not keeping track.

 

[murray t turtle]

So you're not keeping track.

%%
HUH?? What part of a 200dma dma is not clear??
I note again ,'' one of the better, 200 day moving average still helps'' BUT i would not try to just pick one, even though that's still one of the better/best, in context of my last post[which you just quoted.] Cool. I keep better track of my ETFs than fresh deer tracks.