3 ms·

I appreciate the detailed reply. I guess I'm naturally skeptical in two areas: - I don't quite see how you are factoring in the 60% batting average above (see

by chavesn 13y ago

I appreciate the detailed reply. I guess I'm naturally skeptical in two areas: - I don't quite see how you are factoring in the 60% batting average above (seems like it would water your returns down quite a bit from an average 2% "per move" - I'm not sure how well I believe that a casual trader can bat 60%. That sounds quite generous to me, especially on short-trades. I think your ability to execute this strategy as high as 60% is going to vary year-to-year as well, although (thinking out loud), maybe this is a good strategy to play in obvious bull (2013) or bear (2009) markets, but not in flat markets (2012), when it's going to be hard to predict the outcome of any given drop or bounce.

Mikeb85 13y ago
> - I don't quite see how you are factoring in the 60% batting average above (seems like it would water your returns down quite a bit from an average 2% "per move" You're right, I was jumping the gun a little. The average gain is actually a bit higher than 2% (probably 3-5%), and if you're disciplined, you can keep your average loss to a percent or so. The 2% was a more or less arbitrary number to show some of the math behind it, and that you don't need big gains on one trade to make a lot of money. > - I'm not sure how well I believe that a casual trader can bat 60%. That sounds quite generous to me, especially on short-trades. Casual, no. A dedicated retail investor, yes. I agree with the original post that casual investors shouldn't be in individual stocks, but disagree with the notion that a non-professional can't trade. > I think your ability to execute this strategy as high as 60% is going to vary year-to-year as well, although (thinking out loud), maybe this is a good strategy to play in obvious bull (2013) or bear (2009) markets, but not in flat markets (2012), when it's going to be hard to predict the outcome of any given drop or bounce. Well this year has been a bull market, so I've batted 100%. My best trade was a 20% gain in less than a week. 60% is what I'd expect over time, though even 40% is workable if you limit your losses and maximize your gains. I also choose stocks based on their relatively predictable price movements, I stay away from over-publicised stocks that trade wildly based on the news. Flat markets are tougher, but as long as there's some volatility you have opportunity. Learning how to read technical indicators (various statistical indicators based on price movement and volume) is incredibly helpful.

by chavesn 13y ago

Mikeb85 13y ago

> - I don't quite see how you are factoring in the 60% batting average above (seems like it would water your returns down quite a bit from an average 2% "per move" You're right, I was jumping the gun a little. The average gain is actually a bit higher than 2% (probably 3-5%), and if you're disciplined, you can keep your average loss to a percent or so. The 2% was a more or less arbitrary number to show some of the math behind it, and that you don't need big gains on one trade to make a lot of money. > - I'm not sure how well I believe that a casual trader can bat 60%. That sounds quite generous to me, especially on short-trades. Casual, no. A dedicated retail investor, yes. I agree with the original post that casual investors shouldn't be in individual stocks, but disagree with the notion that a non-professional can't trade. > I think your ability to execute this strategy as high as 60% is going to vary year-to-year as well, although (thinking out loud), maybe this is a good strategy to play in obvious bull (2013) or bear (2009) markets, but not in flat markets (2012), when it's going to be hard to predict the outcome of any given drop or bounce. Well this year has been a bull market, so I've batted 100%. My best trade was a 20% gain in less than a week. 60% is what I'd expect over time, though even 40% is workable if you limit your losses and maximize your gains. I also choose stocks based on their relatively predictable price movements, I stay away from over-publicised stocks that trade wildly based on the news. Flat markets are tougher, but as long as there's some volatility you have opportunity. Learning how to read technical indicators (various statistical indicators based on price movement and volume) is incredibly helpful.