What a stupid study

taowave said:
Putting Elliot wave aside,I do agree that there should be equal opportunity trading reversals or the trend,though I would probably opt for "with the trend"..

Im still not sure if you would fall under the trader or investor category,not that it means that much.What I would be careful is becoming an investor because my trade went against me.

Where I would question you is how you approach trading. You do not appear to be playing a game with positive expectancy. Very few do. You talk about understanding Elliot wave,but your approach is lipstick on a pig. I believe where you majorly fail is you will always underperform if you are dead right. You operate within a light "martingale" framework,and in your example your first purchase was 28% of what would wind up being your total position doubling and tripling up down 12 and 25 percent..Thats a losers game,but very consistent with your approach to selling puts...
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Tao you might be too smart to make money in stocks unfortunately. :) To make money in stocks the most important characteristics are stubbornness and patience. The end result of the trade was 60k profits and an 80% return. Those are the only numbers you need to look at. AND this is a worst case scenario...not a typical example. AND this isn't just my theory, it was backtested to entering at the worst time all the way back to the great depression and you are always better off holding and averaging down. Forget all your odds per trade, nightingale bs...it doesn't matter. BTW selling puts is for accumulating stocks at a discount, not collecting premium lol. Anyone who says selling puts is a bullish bias is an idiot. You guys really look at trading ass backwards.
 
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wxytrader said:
Stop losses is gambling. You have placed an order to buy a stock that you have no interest in owning. It basically boils down to that. All the day traders getting in and out of trades racking up losses and fees could be done with one swing trade. The PDT is a good thing because it saves you from yourselves.
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Stop loss is named wrong. It doesn't stop a loss it guarantees one. I prefer to refer to it as a capital preservation exit. I get to keep most of my capital and have it available in case another opportunity presents itself.

I am interested in owning good stocks. Not necessarily a good company. I am only interested in owning it if it performs the way I want it to. I treat it like an employee. As long as it contributes to growing my wealth I'll continue to own it. The minute it slacks off or starts eating into my wealth, it is time to go.

Here is the problem I have with averaging down. It a stock, no matter how good a company, falls out of favor with investors, you can end up holding a non-performer for a long time. If you never sell a loser then eventually you end up with a portfolio full of stocks that you have averaged down into that have yet to come back to break-even.

I kind of agree on day trading as being a lot of work for the gain that is involved. However if they are flat at the end of the day, there is no risk once they're in cash. The next day they have cash on hand to explore any opportunities that present themselves.

You can bet the PDT rule was put into place to protect somebody other than the retail trader. I personally am against any rule that is put in place to protect me from myself.
 
deaddog said:
Stop loss is named wrong. It doesn't stop a loss it guarantees one. I prefer to refer to it as a capital preservation exit. I get to keep most of my capital and have it available in case another opportunity presents itself.

I am interested in owning good stocks. Not necessarily a good company. I am only interested in owning it if it performs the way I want it to. I treat it like an employee. As long as it contributes to growing my wealth I'll continue to own it. The minute it slacks off or starts eating into my wealth, it is time to go.

Here is the problem I have with averaging down. It a stock, no matter how good a company, falls out of favor with investors, you can end up holding a non-performer for a long time. If you never sell a loser then eventually you end up with a portfolio full of stocks that you have averaged down into that have yet to come back to break-even.

I kind of agree on day trading as being a lot of work for the gain that is involved. However if they are flat at the end of the day, there is no risk once they're in cash. The next day they have cash on hand to explore any opportunities that present themselves.

You can bet the PDT rule was put into place to protect somebody other than the retail trader. I personally am against any rule that is put in place to protect me from myself.
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So true ...a stop loss guarantees a loss. I know the PDT rule is a load of bs. My bank blocked buying crypto on credit cards and bank cards saying they are too high risk but they'd have no problem if I blew everything I had on one day trade. This tells me that they don't care if you lose money but they do care who you lose it to...which begs the question who is the broker working for? Who are they trading against? Anyway, I would never do this method with a stock...I would definitely spread it out but I would go all in with SPY.
 
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Tao was "fortunate" to have traded equity derivatives at major IB's and a very large Hedge fund. Tao trades with a positive expectancy.

You still think selling puts is a bearish trade.

You are bragging about your cars that cost less than Subarus.

You post trades of 2 lots on 18 dollar stocks...

YAWN........







wxytrader said:
Tao you might be too smart to make money in stocks unfortunately. :) To make money in stocks the most important characteristics are stubbornness and patience. The end result of the trade was 60k profits and an 80% return. Those are the only numbers you need to look at. AND this is a worst case scenario...not a typical example. AND this isn't just my theory, it was backtested to entering at the worst time all the way back to the great depression and you are always better off holding and averaging down. Forget all your odds per trade, nightingale bs...it doesn't matter. BTW selling puts is for accumulating stocks at a discount, not collecting premium lol. Anyone who says selling puts is a bullish bias is an idiot. You guys really look at trading ass backwards.
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taowave said:
Tao was "fortunate" to have traded equity derivatives at major IB's and a very large Hedge fund.

You are bragging about your cars that cost less than Subarus.I believe your trading account has less than 50k in it...

Carry on
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Hey are you dissing my 2008 Lambo???
 
I have no dog in this fight but after reading all of the posts, it is not an honest discussion or exchange of ideas.

You guys have your minds made up before you read the OP so you don't understand where OP is coming from. To me two points OP made merit your consideration:

1. OP mentioned he only traded index, no individual names.

2. He mentioned the importance of time.

On the first, individual names can go bankrupt but index's chance of going under is very low. The dow has been around for over a century, SPY has been around for years.

On the second, over time, for the last century, index always recovered from a drawdown.

To me the odds that OP's thesis might work is actually quite high.

Wall Streets and you equate volatility with risk. In real life volatility is not exactly equal to risk of ruin.
 
ironchef said:
I have no dog in this fight but after reading all of the posts, it is not an honest discussion or exchange of ideas.

You guys have your minds made up before you read the OP so you don't understand where OP is coming from. To me two points OP made merit your consideration:

1. OP mentioned he only traded index, no individual names.

2. He mentioned the importance of time.

On the first, individual names can go bankrupt but index's chance of going under is very low. The dow has been around for over a century, SPY has been around for years.

On the second, over time, for the last century, index always recovered from a drawdown.

To me the odds that OP's thesis might work is actually quite high.

Wall Streets and you equate volatility with risk. In real life volatility is not exactly equal to risk of ruin.
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Most likely he bought
China index, Kenya index ....

It went down. He bought it.
It went further down. He bought even more.
It went further down. He bought even more.
It went further down. He bought even more.
It went further down. He bought even more.
It went further down. He bought even more.
It went further down. He bought even more ....

WITH NO STOP



Of course now we know there are some indices that go up and up and up.
 
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