Trading Stocks Is the Ideal Business

[Spencer]

2021 investor champ maybe jus good lucky if it only for 1 year

show me one who never lost money any year for whole cycle bear to bull to bear and who beat sp500 each year

my frend grandma from belvue next to redmon buy microsoft jan 1994 and in 1999 up 18x and each year up min 40 percent so is she champ also

[WilliamSmith]

always keeping a tight stop-loss placed to limit your downside on every trade.

Institutional investors had/have a procedure known as "running the stops" where they short into a rising stock, bring it down to below where it started and cover their shorts with other people's stop-losses before allowing the stock to rise again. The stop-loss tactic sounds like it would severely limit ways to profit.

That's a good contribution to the discussion, I think:

The market-makers who might do that ("running the stops," most likely via computer algorithms) will try to trigger the stops at round numbers or around well-known support and resistance levels, so traders trying to dodge that kind of thing might widen their stops beyond those areas. But obviously doing that means you have to be willing to accept the risk of taking a bigger loss as the tradeoff!
That might be the right thing to do depending on the individual case.
Take this with a grain of salt and do yourselves a favor and read his books, but I think Minervini said he committed to never taking more than an 8% loss on any trade.
I bet I'll do better after I re-read and re-annotate all those books to tighten up my own consciously applied set of rules, but lately I've been winging it with more short-term stuff like SQQQ during fun crash days (LOL) and am being so Scottish and parsimonious in setting tight stops on swing trades (those expected to be held for more than one day) that I may actually be giving away a bit of money this way, vs if I used wider stops.

But now on to the second thing here, an even more important part of the discussion, I think:

You said that using a tight stop-loss "would severely limit ways to profit..." So are you implying that there is some way to profit without protecting your downside?

If you don't put risk management as your top priority and make sure you never take large losses on even a single position, how are you going to protect your downside?

The value investors and hodlers with their "thesis" about what stocks or markets are going to do think they can diligently study fundamentals and use their brains to supposedly analyze macro conditions, and some become so confident that they think they don't need stop-loss orders.
But I've never seen them come remotely close to the returns that traders like Minervini or the other guys whose books I posted earlier in this thread can get consistently in bull and bear markets.
And it's not because the traders are geniuses or even smarter than the Wall Street hodlers like Cathie Wood, Ackman, or the Melvin Capital guy: The traders whose style I like continuously emphasize the importance of risk management, and they protect their downside and make sure they trade with the risk:reward ratio in their favor every time.
The thing the Wall Street fund managing "geniuses" I posted about above don't seem to grasp is that you don't make big profits by hodling individual or portfolios of stocks that are plummeting into double-digit loss making downtrends.

There's also a tremendous impulse sometimes to average down on a losing trade when you think something's going to go up, but you bought shares at a higher level. I've done this myself while learning to trade, but fortunately only with tiny little positions before I came to my senses and started using a rule-based system that includes a stop-loss placed as soon as I take any position in any stock or ETF.
There's also this temptation TONS of us have as beginning traders to say the equivalent of: "Well, I know: I'll buy stuff I think is going to go up soon/at some point, but I won't place a stop-loss, instead I'll just place a stop on profitable trades to lock in my profits, but hang on to the ones that go down until they go back up again and I'm in the green."
Well... what we end up having to ask ourselves later is: What if they don't go back up again and put you back in the green? Ask a lot of guys hodling cryptos or pot "stonks", some of which crashed even in the middle of the big QE-inflated bull run.
On risk management: Paul Tudor Jones actually hung a printed wall sign in his office that said "Losers Average Losers" in order to remind himself not to average down (buy more of a losing position), and why Minervini and others whose books I recommend also tell you not to do that.
It can be a difficult decision when someone buys stuff they should not have, then is down a ludicrous amount on their position, like 50-80%. Should they sell it and feel bad, yet scrape back the remaining 20% of their $$$? Maybe, maybe not.
But that NEVER has to happen:
Just accept the smaller losses from using disciplined rule-based management and placing a stop-loss order at an acceptable place every time, and you literally never will incur the big double-digit losses!

As for where to place the stop-loss: It depends on specific price action in the stock/ETF in question, but you can still have your own rule about a maximum allowable loss and therefore pass on trades that would require an over-wide stop. For example, if your max loss you were willing to incur was 8%, but the optimal stop-loss based on the chart would call for a wider stop and you'd need to risk 9-10+%, just don't do that trade!

[WilliamSmith]

2021 investor champ maybe jus good lucky if it only for 1 year

show me one who never lost money any year for whole cycle bear to bull to bear and who beat sp500 each year

Beating the S&P 500 is considered an impressive achievement, LOL? That's what happens when hodlers and value investors are actually given credence as authorities. But this thread is about TRADING, not hodling and coming up with excuses for why Wall Street fund "geniuses" are holding crashing stocks and buying even more in the middle of a huge stage 4 downtrend.
As for showing you the traders with the returns: I'm not kidding about that book list I recommended!
And it wasn't just 2021: Look up the track records of Minervini and some of the other contestants, and also of the guys in the book list I recommended earlier. Since Minervini nailed down a winning rule-based system and won the investing championship back in 1997, I think his worst year since then was something like 128%, and he had an insane average annual return of over 200% if I remember righty, but don't take my word for it, go look it up!
This looks pretty informative about Minervini and also mentions Paul Tudor Jones as one of the previous winners:
https://wallstreettrader.substack.com/p ... esting?s=r

I am still in a beginner phase (well sort of, but my point is I'm not trying to say I'm the role model to follow) and not qualified to be coaching or training anyone else, but those books are worth their weight in gold, and the risk management part is not rocket science: If you place a tight stop loss on every trade to limit your downside to a maximum amount (whether that's 5%, 8%, etc), there is literally no way for you to have double-digit drawdowns in your portfolio like some of these Wall Street geniuses who are down 80%+ right now or throwing in the towel.

[WilliamSmith]

Later on after I'm finished with some other stuff I think I'll make a thread briefly outlining the trading rulesets from each of my favorite books in my trading library...

One more important point since I mentioned some names like Tudor Jones who (I think) went from being small traders to managing hedge funds: As a small trader, you have the advantage even if the funds have orders of magnitude more capital!
Some traders who could do really well with their own "smaller" accounts (whether that's at the bottom/beginner end in the thousands or less, or if that's a $1million USD personal account) can't be compared with huge hedge funds, because the funds are throwing around so much money into the markets that they can't take as large of positions as they might want, and there's also rules, regs, and expectations on them so they don't have the same degree of freedom. I don't know (or care, without disrespect) how fund managers do things, but it's much nicer to be a small trader. It kind of reminds me of being a pilot of one of those smaller Star Wars ships where they can fly around all over the place running circles around the bigger slower giant Star Destroyers or whatever they're called: The big ships have overwhelmingly higher firepower, but not the same degree of movement or freedom as the small ones, and as a small trader that can make a big difference because you can take positions and get in/out of them much more easily.

I think earning a modest living being a small trader is a very achievable goal, but if you want to aim even higher that book list I posted earlier has a damn good chance of getting you on the right track!

[kangarunner]

I highly recommend Oil Trading Academy.

[Cornfed]

I highly recommend Oil Trading Academy.

You know he used to be on the forum right? An interesting character, but I'm not sure I'd trust his view of the markets.

[WilliamSmith]

I highly recommend Oil Trading Academy.

Thanks @kangarunner!
I thought about trying out oil stocks/etfs as a trading niche before, but so far have leaned toward long and short NASDAQ ETFs, but I'll check this out later.

I personally don't know about futures trading yet, but one neat thing about oil stocks is that if you're position trading with a long-ish holding period, they also often have high dividend yields that add to your profits. We had a great run in those after the plandemic crash and some of the oil stocks I nabbed when they were just heading for a 200 dma breakout (while the lamestream media was talking nonsense about the supposed end of big oil LOL) threw off some nice dividends as they went sailing up into their uptrend. In line with my typical tendency to greedily chase and nail down profits, I ended up stopped out of most of those when they were correcting and then would re-enter after they bounced off a shorter-term moving average, but sometimes those dividends still added nicely to total profits even as a small trader in and out of the same stocks.

[Spencer]

I highly recommend Oil Trading Academy.

Hoy hoy hoy is this post joke or real

hes whack out nutter make bogus claim then scam dumwit who fall to his trap

i broke the secret code now i can suck all money i want from wall st anytime anywhere and i hate america and people pick fites wit me every week and i beat em up never lose ever and i am blajac master can always beat casino

he also poster here make violence threats and mean atacking on other poster include bossman wiseton

please tel truth was post a joke post or did you fall for this florida felon and fed ex convic conman wit aditude and anger manager disorders

[Spencer]

Here one with oiltrademan

viewtopic.php?f=11&t=15942

before he also make crazy youtube talk what wonderful puket is and how he lovin thai people and he buy the VIP visa have penthouse condo then after time pass make new video how he hating thai and show him kickdown his condo enter door from pure angry and say he wanna beat up peoples and yeling manacal white supreme racialist man and before in 90s he stay in the pen at feds

why anyone take oiltrader site serious for you not see he epitomalize america as mean angry vegas excon scamerman

[kangarunner]

All I know is David paid me for 4 years to build and maintain both his sites. I trust him.

[Spencer]

All I know is David paid me for 4 years to build and maintain both his sites. I trust him.

You trust crook cus pays you dirty dollars for 4 year

credit card frauds and fake id crimes on his pub records or false claims for get america sucker pay him to brag in front of charts and applicate funel systems

maybe in asia you find nice work at boil room call center or sell fake investment to expat sucker

[kangarunner]

All I know is David paid me for 4 years to build and maintain both his sites. I trust him.

You trust crook cus pays you dirty dollars for 4 year

credit card frauds and fake id crimes on his pub records or false claims for get america sucker pay him to brag in front of charts and applicate funel systems

maybe in asia you find nice work at boil room call center or sell fake investment to expat sucker

Are you OK?

[Cornfed]

All I know is David paid me for 4 years to build and maintain both his sites. I trust him.

If that is all you know, why are you recommending the scheme?

[WilliamSmith]

Heheh, no worries @kangarunner if you were just recommending a trading site by a guy you know and trust, whether you trade futures yourself (though feel free to let us know if you do ), but whatever the case may be there:

Oil and energy sector stocks were some of my best position trades after the 2020 plandemic crash.
SUN worked out particularly nicely for me. I was protective of my profits so I actually raised my stops and got stopped out a long time before it was through with its bull run, but that's OK. Bernard Baruch was a warmongering snake, but when it comes to stock trading and good risk management principles, there's wisdom in his famous quip: "I made my money by selling too soon."

[glanmit]

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