PuffyGums, assuming the first part of your statement is true (about earning 1 point a day average), I don't see how you can reach such a conclusion given proper money management and discipline. Mathematical formulae are welcome.
Unrealistic expectations or a bunch of market wizards?
- Thread starter candletrader
- Start date
i have to disrespectfully disagree with that. i'm having the winning streak of a lifetime right now, this is by far the easiest market i've ever seen. it's like, whatever you do, you can't go wrong, the market is going nowhere and longs, shorts, whatever, are benefitting from each and every move being retraced. some minimal money management and a bit of patience is being hugely rewarded right now.
i'm just sad this is bound to change post-labor day, i wish it would stay like this for years.
this seems like it should be true, but it's not. the most famous example would probably be those damn turtles, that incredibly simple little breakout system still works. but it takes discipline and money management, the two items in shortest supply with us traders.
the reason is that while you can indeed arb out any one system at any given time, it is impossible to arb out all systems at all times. it cannot be done. you can't squeeze out the profit from all breakout systems without giving profits to ranging systems. and vice versa.
if you could arb out everything at all times, the market would never move and nobody would ever make any money.
and that would be the end of the street.
How have you calculated that damir? $50/1000?
But you're dividing points by dollars. The ES contract is worth 1000pts x $50. To keep the unit the same, wouldn't you have to divide dollars by dollars? $50/(1000 x $50)
ie, .001, like Gap said?
Therefore, to make the same daily dollar amount of $50 (1 ES pt), you would need to make 10cents a day on $100 stock trading 500 shares/ or 5 cents a day on $50 stock trading 1000 shares/ or 2.5 cents a day on $25 stock trading 2000 shares.
Am I reasoning this correctly?
If so, it should be clear that the trader making .10 cents on the $100 stock has the commission advantage, followed by the ES trader and then the $50 stock and the $25 stock respectively.
Maybe we should all be trying to scalp EBAY?
Well, no, because because the liquidity issues would kick far quicker for EBAY than ES.
I guess Candletrader intended for this thread to discuss the pyschological aspect of making 1pt a day, but it's since then grown into something more "trading" related. Maybe it should be moved?
I refer you to some content in my introductory post (copied below)... the discussion is about more than short periods of superb performance (although I do appreciate the context in which you made your point)... the discussion is primarily about longer periods of consistent performance and how this may not tally with traders' expectations... given that Trader A may find the same market conditions, respectively, easy and tough that Trader B may find, respectively, tough and easy, the only way to assess performance can be over the longer run, throughout a plethora of market conditions... expectations have a tendency to be out of alignment with what is feasible on a long run average basis... interestingly, any ensuing summer phase of dead trading may serve the useful purpose of swiftly aligning expectations with the ground realities of the long-haul average...
If you set a goal for consistent 1 point profits, your goal will probably lack the motivation necessary to achieve the results you desire, and as a result you will probably be disappointed in your results. Aim high, and if you miss, then so be it, but you'll probably be much better off than setting your sights lower.