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<P ALIGN=CENTER><BIG><BIG><BIG><STRONG>Hmmmmmmmm sounds kinda familiar - NTR</STRONG></BIG></BIG></BIG>
<P ALIGN=CENTER><EM>Posted by <STRONG>SteveS</STRONG> on <STRONG>Thursday, 25 February 1999, at 11:04 a.m.</STRONG></EM></P>
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<P><UL><LI><STRONG><EM>NEW:</EM> Re: Hmmmmmmmm sounds kinda familiar - NTR</STRONG><BR>Walt -- <EM>Thursday, 25 February 1999, at 11:11 a.m.</EM>
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<LI><STRONG><EM>NEW:</EM> Re: Hmmmmmmmm sounds kinda familiar - NTR</STRONG><BR>Bev Mc -- <EM>Thursday, 25 February 1999, at 11:41 a.m.</EM>
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</x-html>From ???@??? Thu Feb 25 13:09:57 1999
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From: "Steve Karnish" <kernish@xxxxxxxxxxxx>
To: <metastock@xxxxxxxxxxxxx>
Subject: "Dockers has left the building."
Date: Thu, 25 Feb 1999 12:06:49 -0800
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In the end, what has been shared? Buy low, sell high? Use tight stops?
Sell an "evening star" pattern? Buy a hammer? Invest 50% of your capital
in one issue?
Brilliant stuff from a "newbie" that has traded for less than a year. Many
of us use exactly the same tools (unmechanically). Few of us think we are
"God's gift to trading". As they say in the north Idaho panhandle: "What
a pile of bear scat".
Steve Karnish
CCT
----------
> From: Docteur <docteur@xxxxxxxxxx>
> To: metastock@xxxxxxxxxxxxx
> Subject: Re: S&P 500 (was AOL, CSCO, & WMT)
> Date: Thursday, February 25, 1999 10:46 AM
>
> Rick and ALL on this thread,
>
> Thanks, thanks for all the input. Wow. It was huge.
>
> Hopefully this letter will put all this bantering to rest. By some of
> the e-mails I have received I pissed a lot of people off. It wasn't my
> intent. My intent was to share my style of trading, which works very
> well for me. I understand now that we all have much different styles.
> Some of us have "systems" that work. I'm not one of those.
>
> First off I never said this is easy money. It's the most intense and
> difficult thing I have ever done.
>
> Secondly, I know nothing of market dynamics and don't care to. I don't
> really know what makes my computer work either but I sure can make it
> serve my purposes.
>
> So you won't waste your time speculating any more here's what I did in
> November (my 2600% return month): I made 37 trades (round trip and those
> I added to as a stock climbed/fell were all bunched under one trade).
> None of them were more than two days in duration, the majority of them
> were less than three hours in duration. 33 were winners and 4 were
> losers or break even, including commissions and slippage.
>
> My account balance is the same at the beginning of each month. I take my
> profits out at the end of each month and start over fresh. Why?
> Because with the kind of returns I am making I am living very, very well
> and I see no point in rolling profits back into my account. I don't
> need more than I am earning. I want to spend the money now and enjoy my
> life. And besides, I have a very large nest egg from my other
> businesses that is my slow grow capital (20% - 35% per year).
>
> I may be reading this thread wrong but I assumed the goal of trading for
> most people on this site is to make a living at it. If not, well then
> my style is not for the people reading this post. I take and spend
> profits every month. I have no debt and enjoy life immensely.
>
> As soon as I start trading again (remember I am reviewing the last
> several months and just focusing on learning more right now) I will use
> the same strategy and guidelines that I did in the last six months,
> those being: Never risk more than 50% of my capital on any one position
> and never risk more than 4% of that on any one LOSS.
>
> More often than not, my stops put me at a break even or a commission
> loss. I keep very tight stops and only enter a trade when it screams at
> me to enter. I never trade more than TWO STOCKS at any given time. I
> typically buy between 10 and 100 contracts per trade, depending on how
> deep in/at/out of the money I am on that trade. Very intense but it
> works for me. So, I try to never risk more than 2% of my capital on any
> given trade LOSS.
>
> So, if I make 30 trades in a month and the average trade is 100% return
> on 50% capital at risk (which with options is very possible
> consistently) I am cruising along at 1500% per month on my capital
> account at the beginning of each month. I won't tell you how much my
> base capital was during the last six months but when I start trading
> again (as opposed to taking a break to continue learning) my base
> account will be in six figures.
>
> I keep very tight mental stops and never enter a trade unless I see an
> intraday period top or bottom. I trade off real time charts and use a
> 15 minute time frame for candlesticks and chart patterns and a dynamic
> daily chart to give me the bigger picture of support and resistance
> levels.
>
> Market up or market down makes no difference to me. If it's falling, I
> simply buy puts. So your discussion of what the market did over that
> screaming three months holds a little weight, but not much. Remember, I
> earned 1200% in January and themarket basically closed where it opened
> for the month. I actually have done better with puts than with calls,
> even with an up market because of the volatility.
>
> I generate the kind of returns I do because I work on a monthly basis.
> Average return on capital for the year will be close to what I earn
> monthly because the base stays constant. My goal is ten times my
> account balance at the beginning of each month. For the last six
> months, I have averaged that or better. Again, I pay myself at the end
> of each month over and above my static capital base. That affords me
> less risk and higher returns and I don't continue to roll my profits.
> Why take more risk for less return? I pay myself at the end of each
> month and start over again because I know that I can match my previous
> months return. And I have been making a phenomenal living just doing
> what's in front of me.
>
> Like I said earlier, I know nothing of market dynamics. Don't need to
> and don't care. I know market makers control this thing. I just want
> to go in the direction they are moving it. Doesn't matter to me what
> they are doing or thinking. I couldn't care less. Won't waste my time
> trying to figure out what everyone is doing to manipulate the market. I
> just trade what's in front of me.
>
> I keep my strategy simple and read the market as it unfolds. Market
> dynamics? Nah, waste of my time. Know nothing about them. You nor
> anyone else understands them either because if you did, YOU'D be on the
> cover of Forbes. Even Greenspan admits there's a lot he doesn't know...
>
> Truth is you have a system that works pretty well. Great. Keep doing
> what you're doing. More power to you. More power to all of you.
>
> My style of trading (definitely not a system because the market is fluid
> and a systematic approach just doesn't serve my purposes) affords me
> great monthly returns on my capital with very little risk. Defnitely
> not for everyone. But my goal is to make a really good living/cash flow
> at this with the least amount of risk. I'm succeeding. That's all that
> matters to me.
>
> Again, if I was continuing to build my capital base of course my returns
> would progressively shrink every month. But why continue to risk larger
> sums of capital for smaller returns? Never understood that one.
>
> I live off what I earn and live very, very well. My risk is minimal, my
> returns quite satisfactory. What more could I ask?
>
> BTW, great analysis. It just doesn't apply to me.
>
> I wish you and everyone onthis thread continued success. If nyone wants
> to contact me please feel free to do so direct.
>
> Doc
>
>
>
> Rick Mortellra wrote:
> >
> > Lionel,
> >
> > After reading his "proof" exposing this guy is easy and I don't even
have to
> > check his *hypothetical* trade prices, nevermind his real ones. The guy
is
> > all over the place, having us in a trade for 3 hours one time and 30
days
> > the next. He also expects us to ignore the fact that these gains
weren't
> > made over a series of many trades but just 2 huge totally disimilar
trades
> > made months apart. Practically one-offs in other words. Especially
since the
> > stocks he mentions are extraordinary to say the least as well as the
time
> > periods in which he trades their options. These stocks have exhibited
> > unprecedented prices moves during a never-before-seen 3 month market
period
> > that saw the Dow gain more than 30% and a NASDAQ gain of almost 85%. To
> > imagine this "easy money" is the normal state of the market from now on
and
> > trades like this can be made daily is total naivete.
> >
> > Now here's how the math catches up with his charade:
> >
> > Of course buying CALL options can keep his losses small EXCEPT he bets
his
> > whole wad on each trade because he infallibly calls the highs and the
lows.
> > But if he looses, which he implies he sometimes does, he looses
EVERYTHING.
> > End of fairytale.
> >
> > Obviously he has lived to trade again so he must not be betting
everything
> > and perhaps he's practicing a little bit more money management than he
lets
> > on. In which case, his 2400% return on his *account* is not what it he
makes
> > it out to be.
> >
> > Let's keep it simple. Say he still bets a very imprudent 10% or $1000
of a
> > $10K account on the AOL trade. He wins $24k. Suddenly his total
hypothetical
> > account's return is just 240%, still not too shabby. However, maybe
he's not
> > so wild and crazy and only bets 2%. Now his total hypothetical returns
are
> > back down to a more believable 48%.
> >
> > But, he completely ignores slippage and commissions. Not that
commissions
> > would be adversely huge (maybe for a 1000 contracts though) but they
sure
> > won't be $20 roundtrip either! Slippage, on the other hand, could be
very
> > adverse to his options' return and it is a stretch for us to believe
that
> > he, as a retail customer, could buy 100, much less a 1000, contracts of
AOL
> > for a 1/16. Frankly I can't even imagine an expiring option with strike
of
> > $160 for a wild stock like AOL trading barely out of the money that
low, but
> > perhaps it did among option makers/institutional accounts at the low of
the
> > cash market. Nevertheless his trade would probably make up a
substantial
> > part of an expiring options' total open interest that day and as soon
as his
> > order hit the sheets the options' bid/ask would fly. He's talking
trading
> > 10,000 to a 100k shares of the underlying here too and the options
maker is
> > also gonna lay that risk off in the cash market. Needless to say, he
seems
> > to lack a complete understanding of the market dynamics. Cutting him
some
> > slack and allowing slippage to bump a market order price up to just a
> > measily 1/4 point lowers his trade return to 60%. And using 2% of his
total
> > account to enter lowers the return to a *really* more normal 12%.
> >
> > Now here's the big surprise! Once he starts making his big profits the
IRS
> > is gonna want a piece of it. In advance! Because as anybody who has
made big
> > profits in stocks learns, you gotta pay your estimated taxes quarterly
> > whether you finish the year at an overall profit or not. Otherwise the
IRS
> > paddles your behind with penalties. This directly impacts the amount of
his
> > trading capital available throughout the year, hence the overall profit
he
> > can generate, thus lowering his return even more.
> >
> > So as you can see, unless you belive 1-2 lucky trades vouche for a
persons
> > trading skill, just overcoming the frictional costs of trading is a big
> > hurdle for any trader regardless of his system or lack thereof. Even a
huge
> > win can be cut down to size.
> >
> > Of course the simple solution is to make more than 1 huge trade a month
but
> > I doubt if he could conjure up enough historical data. Certainly not
enough
> > to satify my risk profile.
> >
> > At least I give him credit for buying slightly out-of-the money CALLS
on
> > highly volatile stocks on expiration, as it is a tried and true
strategy.
> > Especially, in these net stocks like AOL when they are splitting the
> > following Monday. It's a great punt WHEN it pays off. But make no
mistake,
> > that's exactly what it is, a punt, as any option maker will tell you.
Just
> > like a lotto ticket, 99.99% of these plays expire worthless, except in
this
> > case the ticket would cost you a minimum of $625. But when they payoff,
the
> > rewards can be spectacular. I congratulate him on his paper win, but
now the
> > challenge for him is turn his Monopoly money into cold cash.
> >
> > cheers,
> > Rick
> >
> > -----Original Message-----
> > From: Lionel and Gail Issen <lissen@xxxxxxxxxxxxxxxx>
> > To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
> > Date: Thursday, February 25, 1999 1:13 PM
> > Subject: Re: S&P 500 (was AOL, CSCO, & WMT)
> >
> > >Docteur:
> > >
> > >Your "proof" is after the fact. What have you traded?
> > >
> > >
> > >Lionel Issen
> > >-----Original Message-----
> > >From: Docteur <docteur@xxxxxxxxxx>
> > >To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
> > >Date: Wednesday, February 24, 1999 7:52 PM
> > >Subject: Re: S&P 500 (was AOL, CSCO, & WMT)
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