|
PureBytes Links
Trading Reference Links
|
nwinski wrote:
>
> Eric wrote:
> >
> > >
> > > Russ,
> > > Your excellent research confirms my own anecdotal observations.
> >
> > Well Norm, I don't know how excellent and thorough this research really
> > was, but I have to take exception to a few things you say.
> >
> > Those
> > > who confine themselves to day trading put an aritificial limit on
> > > themselves that only serves to limit winning trades. You should
> > > be a daytrader for your losing trades and let your winners ride as long
> > > as necessary.
> >
> > I think your trading style should fit your personality and risk
> > tolerance. Not all of us can be home run hitters. Some are very
> > comfortable hitting singles on a more consistent basis, even though we
> > might not get the headlines.
> >
> > Also, it is my observation that the more you trade the
> > > less likely you are to make money. This is true for two reasons. 1)
> > > Transaction cost will significantly erode any profits. 2) Trading
> > > represents risk, the more you trade the more risk you are taking.
> >
> > Is this really true. I think the longer you have market exposure , the
> > more risk. That means a daytrader will have less risk than a buy and
> > hold. That would also be borne out by the normal rule of more risk more
> > reward. I don't think you can have your cake and eat it too by saying
> > buy and hold is always more profitable AND less risky. If so, more of
> > us would be in the group REALBUYANDHOLDERS instead of REALTRADERS.
> > True, daytrading may not maximize profits in a strong trending market,
> > but how about a market like stocks in 1994. Buy and hold makes nothing,
> > daytrading makes money (maybe).
> >
> > > With an increase rate of trading your risk reward drops and your
> > > transaction cost go up.
> >
> > Absolutely, transaction costs go up, that is one of the trade offs for
> > less market exposure.
> >
> > But, don't try to tell any of this to the
> > > daytrading junkies who are seeking the latest holly grail trading system
> > > so they can get their daily fix of excitement in S&Ps. Afterall, 95% of
> > > those trading are not in it for the profits, but rather for excitement,
> > > the lifestyle (talk markets with my buddies), or to vent some
> > > reoccurring neurosis, or some combination of the above.
> >
> > Come on, why so much derision in these statements? Isn't this a little
> > overboard? After all we short term guys provide liquidity when you need
> > it.
Eric and Norman,
Both of you guys have valid points.
I use BOTH trading styles, letting the market dictate how I trade.:)
It's all about "maximum profit vs. minimum risk" .
If the market is trending strongly, or trading at extremes
a longer term approach provides
less risk and more profits.
If the market is exceedingly choppy, the Intra-day and Short-term
techniques provide better RR ratios.
All depends on what the MARKET is doing.
I never concern myself with STYLE. I only ask myself, "What's the risk
and WHERE'S THE MONEY"....... :).
Walt Downs
CIS Trading
|