Is follow thru a thing of the past?

piecesofme

I understand profit taking on a 2% one day pop, but will there ever be any follow thru again like the way it use to? 2% in a day, then it might fall a bit but then another 2-3% day that same week. (For clarification, that's what I'm referring to as follow thru.)
Like I say, I understand it, but if people are playing their hand that close to lock in a 2% profit, is it really worth the risk even if one has a substantial amount risked...all for 2%.
Someone is willing to put up, let's say $1M to profit $20k? If someone has $1M they can play with, do they really care about $20k? I don't know, maybe it's just the way I think...what am I missing?

Maybe the person risking $1M feels that the value is soooo locked into a range (which it is) that there's not much chance of losing a whole lot...but at the same time they're falling over themselves to lock in $20k? The numbers for the risk/reward don't make sense to me for someone who has $1M to risk. Maybe I've set my goals too low and should micro-manage my $ to lock in 2%? And is that realy worth the time and effort for the level of investing I can realistically do?

Sorry, just thinking out loud here.

DrBuster

Make that paltry 2% play and roll it back in and repeat, say an easy 10x/year, and you have your answer. I'd take that on a mil in a heartbeat, especially with eyes on a market/commodity every day anyway. Easy money.

cohodk

like the way it use to? 2% in a day, then it might fall a bit but then another 2-3% day that same week.

That type of trading pattern is the exception, what we have now is more the rule. Assets trade sideways much more than up or down.

piecesofme

That type of trading pattern is the exception, what we have now is more the rule. Assets trade sideways much more than up or down

I miss the volatility that a small timer like me could benefit from.

DrBuster

<< <i>That type of trading pattern is the exception, what we have now is more the rule. Assets trade sideways much more than up or down

I miss the volatility that a small timer like me could benefit from. >>



Blame the trading bots.

Baley

what metals heavy portfolios need is a nice panicky crisis; short of that, how about some PM collectibles fads and manias, and uber fancy packaging and certificates of quality?

topstuf

"Investing" is no longer a word.

Of COURSE they'll risk a mill for 20k. It ain't THEIR mil.

Look to the funds for the answer to why the US market is done, done, done.

MGLICKER

Administration fears a decline in equities as that is the last standing leg of a feeble economic legacy. Quick call from the fed to GS props up the market after a slight fall.

All works fine and well until the house of cards becomes too top heavy and collapses in a pile of greed, fear and unconsummated dreams.

Edit to add: Russian risk is staggering, revenues have been flat to shrinking in US and inflation is 7% or so and Pimco may be the next huge bailout, yet DJIA and SP500 are all within 1 or 2% of record highs.

I think of Barry Bonds and his 73 home runs.......

bronco2078

I think they call that 2% gain plan a taleb distribution . there is a wikipedia page here

This is the money quote Pursuing a trading strategy with a Taleb distribution yields a high probability of steady returns for a time, but with a near certainty of eventual ruin.

MGLICKER

<< <i>Pursuing a trading strategy with a Taleb distribution yields a high probability of steady returns for a time, but with a near certainty of eventual ruin. >>



Assuming of course that the trader does not have inside information as to the markets next move.

ie Barry's secret meeting with 19 bankers a year or so ago.

erickso1

Short answer. Yes, a 2% one day gain is worth it, even to someone with $1 million, or $10 million, etc.

Take a look at high grade fixed income. They claw for basis points.

MGLICKER

<< <i>Short answer. Yes, a 2% one day gain is worth it, even to someone with $1 million, or $10 million, etc.

Take a look at high grade fixed income. They claw for basis points. >>



...and are often highly leveraged. Properly hedged it can be a of only moderate risk. In fast markets though, the wheels can fall off the hedge and cause a mess.

jmski52

if people are playing their hand that close to lock in a 2% profit, is it really worth the risk even if one has a substantial amount risked...all for 2%.

No.

what metals heavy portfolios need is a nice panicky crisis

It depends on what the crisis is and whether or not it can be managed. We have an ongoing debt crisis and a potential currency crisis, and it's anyone's guess when or if either of these will reach critical mass.

cohodk

Text Someone is willing to put up, let's say $1M to profit $20k? If someone has $1M they can play with, do they really care about $20k? I don't know, maybe it's just the way I think...what am I missing?

Classic example of common thinking of the stock market- or any market. The million is not at risk. Investors are not going to lose it all unless an asteroid strikes earth a few seconds after the trade is made. If you buy $1,000,000 worth of gold do you think it is going to 0? Of course not so you are not risking $1,000,000. And real traders who might trade for a 2% profit also trade for a 1% loss. They do not sit with the investment and ride it for 30-50% losses-- that's for J6P.

piecesofme

Classic example of common thinking of the stock market- or any market. The million is not at risk. Investors are not going to lose it all unless an asteroid strikes earth a few seconds after the trade is made. If you buy $1,000,000 worth of gold do you think it is going to 0? Of course not so you are not risking $1,000,000

Please read the paragraph that starts with "Maybe...

Q: Why can't people read and digest the whole thought?
A: Because they already have formed their own opinion of what someone else is saying, then start typing.

Seriously, I thought I made a good attempt at trying to see it from a different point of view but apparently it wasn't written clearly enough to show that I was considering different view points when I was "thinking out loud", so in fact it was not a classic example. I'll try harder to relay the thoughts in my head more clearly next time lol.

Justacommeman

<< <i>Short answer. Yes, a 2% one day gain is worth it, even to someone with $1 million, or $10 million, etc.

Take a look at high grade fixed income. They claw for basis points. >>



This is the right answer. When I did it for a living in was all about entry and exit points and risk reward. Most of my trades were days in the making. I never held a position overnight.

MJ

piecesofme

This is the right answer. When I did it for a living in was all about entry and exit points and risk reward. Most of my trades were days in the making. I never held a position overnight

I gotcha. Plan the work then work the plan. But would you hold overnight if from the time you entered it took a dive? You were probably good at it and this rarely happened to you, but I'm sure it did a time or two. What would you do then? Lick your wounds and cut bait or take a chance and hold overnight and/or possibly double down if you felt so strongly about the plan?
Sorry if it's too personal of a question, just picking your brain a bit since you did it for a living. I understand if you would rather not answer.

rawteam1

That's where u make the most money, by selling your loser, at stop or predetermined time frame or both or what and whenever, u must sell cause u were wrong, no waiting for tomorrow, cause tomorrow never comes, as tomorrow is today tomorrow ...

Justacommeman

<< <i>This is the right answer. When I did it for a living in was all about entry and exit points and risk reward. Most of my trades were days in the making. I never held a position overnight

I gotcha. Plan the work then work the plan. But would you hold overnight if from the time you entered it took a dive? You were probably good at it and this rarely happened to you, but I'm sure it did a time or two. What would you do then? Lick your wounds and cut bait or take a chance and hold overnight and/or possibly double down if you felt so strongly about the plan?
Sorry if it's too personal of a question, just picking your brain a bit since you did it for a living. I understand if you would rather not answer. >>




Never on my personal day trading account. I closed all trades by 3:45 as things get squirrelly the last 15 minutes. I had more losing trades then winning trades BUT the losers I stopped on out on cue. I rarely let a trade run more then 1% against me. I always looked for a 2/1 risk reward trade or better.

Sidebar- I did also trade for other accounts that involved swing trades on options where positions maybe held for days. I bought in three increments as a stock was falling to it's trend line normally.

MJ

derryb

2% in most cases won't cover the expenses of selling physical. Nothing wrong with 2% as long as it keeps repeating itself in the same direction. Most of the moves to the last peaks were in low percentage increments. Stamina is the key.

Note that leveraged metal ETFs (X3) can provide about a 6% gain or loss on a 2% spot price movement and position/liquidation costs are peanuts.