Too Many Traders Are Cry Babies...

[ironchef]

Hold on, so you admit that Western notions are better than Eastern notions even though you are from the East. This is getting interesting. Do you view yourself inferior because you were not born in America? @dozu888

@dozu888 feeling inferior? You must be kidding.

I had done business in most of the East Asia countries including China. The smart, the work ethics and relentless push to excel by those from Asia, no matter which country, were eye opening. I always wondered why they couldn't be better? Perhaps, it is their political systems? What scare me is when and if they combine the Western political/culture with their work ethics.

Just look at the success of those transplants from Asia to the US and Canada. If we based admissions on merits alone, our universities will be overrun by them. In my backyard, since the UC system implemented a more strict merit system, UCI has an Asian student population of ~40% with all other UC system having similar outcomes, so much so the UC system is changing admission policy:

http://www.nbcnews.com/id/30393117/...cans-blast-uc-admissions-policy/#.XVmgFJNKgXo

 

[tiddlywinks]

That's the advantage that fund managers have. They don't get shaken out, fake out, etc. When you have billions under management and position size correctly, the market isn't such a scary place.

You need more depth to your "knowledge".

1) Funds and fund managers operate according to a prospectus.
2) The trading style of the fund is defined.
3) Position sizes are defined (and usually limited).
4) Positions are (usually) accumulated over time.
5) Positions are (usually) liquidated over time.
6) Expected (vs actual) client buy-ins and withdraws are always factored.

Retail has a significant edge versus funds/fund managers in that they have nimbleness, in all aspects of operations.

 

[ironchef]

I don't trade stocks as much as I trade futures nowadays.

May I ask why?

 

[trader99]

May I ask why?

Actually, there was a period where I was making decent $ with stocks too. And I can probably continue to make money in them if I focus on them. Once you know how to trade, it almost doesn't matter the asset class.

Here are things I don't like about stocks but can easily manage around it if I work at them:

1) wide bid/ask spread. Not all stocks. I like to buy a 1000 shares each time. Regardless of price. Perhaps that's the problem. Anyhow, sometimes the spread is 20 cents. So when you get in you are already down $200. And if it moves 40-50 cents against you then you are down $700. Which isn't the end of the world, but when you are only trying to make low thousands per trade that's an unnecessary hit.

2) You need more capital. With futures the margins are low. To make the commensurate returns you need more capital to trade stocks. I can easily make thousands in futures with not much capital. For me to do the same in stocks, I have to buy enough shares.

Of course, some people recommend penny stocks or low priced stocks. I know a lot of internet stock gurus(e.g. Tim Skyes) push penny stock trading strategies. I think they are for suckers. I've gotten in several thousands shares of low priced stock before. But when they move against you it can be painful. Then I realized it's about volatility and not price. $5 stock can be more dangerous than a $100 stock if it moves 20% in a few minutes. I've seen low priced stock drop $1 in a few minutes which on a percentage basis is HUGE! Like 20% drop. What's the chance of a $100 stock dropping 20% in a few minutes. Not much barring crazy exogenous news.

So, I stay away from low priced stocks. But for big cap stocks, I feel it's relaxing to trade it. I still put on the occasional stock trade and make money.

But I feel like I need to focus and scale up in what's making money for me. Which is NG.

In the long run, I will built systems to trade stocks and futures. It's not fully automated but at least it will trigger alerts and get me interested in things. There are definitely lots of opportunities to make money in stocks too. And I've made money in stocks in the past.

What I found easy to trade are certain ETFs and certain leveraged ETFs! They have small bid/ask and plenty of liquidity so you can buy a lot of shares no problem. And decent volatility too. I've been playing those and making some money. But I would need to be focused if I want to scale up. With manual trading, there are only so many things I can manage and pay attention too. LOL.

 

[Overnight]

...Which is NG.

...

Take a look at LE also. That's a slow mover, relatively speaking.

 

[nooby_mcnoob]

@dozu888 feeling inferior? You must be kidding.

I had done business in most of the East Asia countries including China. The smart, the work ethics and relentless push to excel by those from Asia, no matter which country, were eye opening. I always wondered why they couldn't be better? Perhaps, it is their political systems? What scare me is when and if they combine the Western political/culture with their work ethics.

Just look at the success of those transplants from Asia to the US and Canada. If we based admissions on merits alone, our universities will be overrun by them. In my backyard, since the UC system implemented a more strict merit system, UCI has an Asian student population of ~40% with all other UC system having similar outcomes, so much so the UC system is changing admission policy:

http://www.nbcnews.com/id/30393117/...cans-blast-uc-admissions-policy/#.XVmgFJNKgXo

The people you are seeing are the best of what they have to offer. Indeed by the third generation, every advantage that the Asian immigrant had is gone.

 

[tomorton]

You need more depth to your "knowledge".

1) Funds and fund managers operate according to a prospectus.
2) The trading style of the fund is defined.
3) Position sizes are defined (and usually limited).
4) Positions are (usually) accumulated over time.
5) Positions are (usually) liquidated over time.
6) Expected (vs actual) client buy-ins and withdraws are always factored.

Retail has a significant edge versus funds/fund managers in that they have nimbleness, in all aspects of operations.

Thank you for this perspective. I know almost nothing about how fund managers work but was prepared to bet that the way I trade from a spare bedroom with my own tiny capital bears little relation to how they run their funds. Same as being the mayor of the city bears little relation to being a cop on the beat.

You have backed me up by summing up some key differences so well.

As the next step I hope to high heaven I never hear Warren Buffet termed a successful trader ever again.

 

[ironchef]

Actually, there was a period where I was making decent $ with stocks too. And I can probably continue to make money in them if I focus on them. Once you know how to trade, it almost doesn't matter the asset class.

Here are things I don't like about stocks but can easily manage around it if I work at them:

1) wide bid/ask spread. Not all stocks. I like to buy a 1000 shares each time. Regardless of price. Perhaps that's the problem. Anyhow, sometimes the spread is 20 cents. So when you get in you are already down $200. And if it moves 40-50 cents against you then you are down $700. Which isn't the end of the world, but when you are only trying to make low thousands per trade that's an unnecessary hit.

2) You need more capital. With futures the margins are low. To make the commensurate returns you need more capital to trade stocks. I can easily make thousands in futures with not much capital. For me to do the same in stocks, I have to buy enough shares.

Of course, some people recommend penny stocks or low priced stocks. I know a lot of internet stock gurus(e.g. Tim Skyes) push penny stock trading strategies. I think they are for suckers. I've gotten in several thousands shares of low priced stock before. But when they move against you it can be painful. Then I realized it's about volatility and not price. $5 stock can be more dangerous than a $100 stock if it moves 20% in a few minutes. I've seen low priced stock drop $1 in a few minutes which on a percentage basis is HUGE! Like 20% drop. What's the chance of a $100 stock dropping 20% in a few minutes. Not much barring crazy exogenous news.

So, I stay away from low priced stocks. But for big cap stocks, I feel it's relaxing to trade it. I still put on the occasional stock trade and make money.

But I feel like I need to focus and scale up in what's making money for me. Which is NG.

In the long run, I will built systems to trade stocks and futures. It's not fully automated but at least it will trigger alerts and get me interested in things. There are definitely lots of opportunities to make money in stocks too. And I've made money in stocks in the past.

What I found easy to trade are certain ETFs and certain leveraged ETFs! They have small bid/ask and plenty of liquidity so you can buy a lot of shares no problem. And decent volatility too. I've been playing those and making some money. But I would need to be focused if I want to scale up. With manual trading, there are only so many things I can manage and pay attention too. LOL.

Thank you for the thoughtful answer.

 

[speedo]

 

[trader99]

You need more depth to your "knowledge".

1) Funds and fund managers operate according to a prospectus.
2) The trading style of the fund is defined.
3) Position sizes are defined (and usually limited).
4) Positions are (usually) accumulated over time.
5) Positions are (usually) liquidated over time.
6) Expected (vs actual) client buy-ins and withdraws are always factored.

Retail has a significant edge versus funds/fund managers in that they have nimbleness, in all aspects of operations.

I know about the above. I was a quant at a $44B(AUM) fund at the start of my career before I switched to tech later on. Back then, I was on the research side and not trading. But they were not HFT so it was monthly rebalancing. They used principal bid sometimes to dump an entire basket at a time.

Yes, retail traders have the advantage of being small and nimble. I trade retail now.