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Dear Dan,
I'm glad that you have "found the light". However I disagree with your views about the US "has the characteristics of orderly accumulation and distribution and sufficient liquidity". Ever ran into the issue of wanting to short on the equities market but not being able to borrow the scripts to do so? That's cause the Big Boys are shorting as well.
While you have faith in a mechanical system, I'm afraid I do not. With your years of experience I'm sure you know that there is a big world of difference between back tesing and live trading.
Nick Leong
Dan <amarones@xxxxxxx> wrote:
Nick-
I have been trading off and on for about 10 years, both privately and as a CTA for a time. I am definatley on the short end of the net zero game as a whole, but my dream of being a full time trader has been revitalized and is on the way to being realized in the last year.
Who knows, I may blow up the account and have to start over again at some point, but my experience in trading tells me I've finally found what works for me. I think that is the key - what works for each trader. I spent what feels like a lifetime with everything in the trading world that didn't work for me.
I disagree that one must switch markets to be consistently successful. If any market has the characteristics of orderly accumulation and distribution and sufficient liquidity, then it can be consistently traded.The markets on the U.S. futures and equity exchanges offer too many issues and markets that exhibit these characteristics for me to consider trading more than just the cream of the crop. I don't think it is necessary to switch from domestic to foreign markets and from equities to futures to be successful - there are so many market personalities within each of those sectors, that the opportunities are far more than I have the capacity to consider.
For me it would be ludicrous to ignore either the long or short side of the market because it would mean giving up half the potential profits. I use a 100% mechanical system developed with Metastock that averages 76% winners. It's not perfect, but it backtested an average gain of 240% annually over the last 2 years and is perfoming as advertised in real trading.
For me the clouds have lifted and I can finally see the dream of being a full time successful trader on the way to being realized.
Dan Edens
From: Nick Leong
To: Metastockusers@xxxxxxxxxxxxxxx
Sent: Wednesday, January 15, 2003 4:29 PM
Subject: [Metastockusers] Full time private trading... ... an unattainable dream?
Hi group,
I’ve been reading some articles about the hedge fund management industry and how most funds sustained losses over the past 2 years especially since Sept 11 and the US corporate scandal. This is coupled with a statistic I read that most novice traders leave the trading arena after about 3 months. These events really got me thinking… … is it really possible for one to be a full time private trader?
I’ve been trading privately for about 4 years not and like most of you I’ve had my ups and downs. I am a firm believer that trading the market is a zero sum game. Someone MUST lose in order for me to make a gain. However, the law of averages dictates that it is just not possible for anyone to be winning all the time. That being the case, is it actually possible for anyone to be a full time private trader (i.e. trade using only his own money and make a living out of it)?
The only possible way for one to make money is possibly to be engaged in the right market at the right time, e.g. to switch between the equities/futures/derivatives markets or switch between the US/Europe/Asian markets. But we must also remember that a private trader does not have the resources or the mental capacity to handle so much information or research at a single time. What option would be left then? To specialise and trade only in specific markets and sit things out when everything is not going well? Do not forget that a downturn in the market can last for years.
We can go into the nitty gritty and say that we must set up stops to prevent losses, but I’m sure most of you have been in the situation where you were stopped out too early or you had given so much room before being stopped out that you suffered a painful loss. Don’t get me wrong, I believe that trading and investing is an art and there is no one mechanical way of getting the right results. Ultimately, we are all looking for one thing… …PROFITS. However, I have come under the increasing impression that the odds are severely stacked against the private trader.
I look forward to hearing from you guys on this matter.
Thanks.
Nick Leong
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