Trading in the years after a market crash

[Leigel]

Are there traders who managed to make a good income during years like 2012, when the stock market was extremely calm? Assuming one only day trades or swing trades, but does not look to hold a position for more than a month.

 

[comagnum]

That's the toughest condition for traders - when the market goes flat in a bear bottom, most end up dying from 1,000 small cuts.

 

[S2007S]

These last 3 trading days are more exciting and entertaining than the last 3 months!!!

 

[Overnight]

These last 3 trading days are more exciting and entertaining than the last 3 months!!!

How come we don't hear anyone talking about the Plunge Protection Team any longer? Perhaps it never existed?

 

[Leigel]

That's the toughest condition for traders - when the market goes flat in a bear bottom, most end up dying from 1,000 small cuts.

That's more or less what I was afraid of. Did you trade succesfully during that time?

 

[S2007S]

How come we don't hear anyone talking about the Plunge Protection Team any longer? Perhaps it never existed?

It will come soon. I believe another 5-10% and will start hearing about more relief, however
As far as the markets have come and how high they have skyrocketed off march lows they don't need any relief. Even a solid 20% drop wouldn't even bring us back to March lows and according to literally every article and everyone that has been talking about equities says March lows will NOT be revisited. The markets could start to play that game where they sell off once again in hopes of another fed stimulus plan but this past solid rally was a gift.

 

[Overnight]

It will come soon. I believe another 5-10% and will start hearing about more relief, however...

It will have to come 8 days from now, at the next Powell Love Fest (Wed Sept 16th)

 

[S2007S]

It will have to come 8 days from now, at the next Powell Love Fest (Wed Sept 16th)

You got that right. So maybe will sell off about 3% a day and like magic the fed will produce some kind of fun stimulus package for the market. Maybe take the rates down a 1/4.

 

[ajacobson]

Less business was done in a lit environment and many more venues both lit and dark. Preferenced orders and payment flourished. Smaller MM either consolidate or began more pure investing. Foreign ownership of exchanges and Asia became a large pool of both cash and debt/equity offerings. Communication and technology costs skyrocket.
A greater number of short-dated option products and volatility becomes a listed product.
A lot of these are used to facilitate market-neutral ideas.

 

[comagnum]

That's more or less what I was afraid of. Did you trade succesfully during that time?

For the most part I did reasonably well. In my first bear bottom, the dot com bust, I worked my tail off & managed to break even.

Where I went wrong was I had spent about $50k in commissions + exch fees. I vowed to never again make a broker richer If I was not also reaping the profits - I learned to watch my trading expenses like a hawk.

I did well in subsequent bear markets, been lucky to have a knack for shorting right before some big waterfall selloffs. Learned to slow way down when the mkt flattens out.

When the value investors finally show up they will ignite a new bull mkt - just a matter of being patient until than & protecting the capital.

In a nut shell- what works in bear bottoms & all mkt conditions is to reduce size & frequency when not making profits, than doing the inverse when trades start working again.