swing trading

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kikie
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swing trading

Post by kikie »

i have a friend on Maui, who is retired, and has a business that runs itself.

he tells me he does swing trading and makes 30-100% / year and in the last 5 years only lost in 2008.

tells me he uses all his investments to do this, no "mad money" firewall.
and only trades when conditions are right, i suppose he means when it is 'trending' not 'trading'

just curious what BH would say about this situation.

he says he doesn't need to make the 30% + , but does it as a hobby and for fun .....

i'd 1/2 like to talk him into BH'ing
Those who know do not speak; those who speak do not know.
john94549
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Post by john94549 »

I'd take his comment with a healthy dash of salt. Have him print out a copy of his trades (in and out) for the past five years. Ask him to send it to you, so you can benefit from his "system." Then don't hold your breath until you turn blue. In the off chance you do get a copy of his trades, and they match his statement, then your friend is a remarkable trader.
livesoft
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Post by livesoft »

Why do you want to mess him up? If he is making 30% (that's about what stocks did last year) and having fun, let him be. Maybe you can post some of his trades as they happen.

For myself, I always buy on those ReallyBadDays which one could consider a form of swing-trading or market-timing or rebalancing depending on who you are talking to.
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MWCA
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Post by MWCA »

Let a sleeping dog lie.
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SP-diceman
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Post by SP-diceman »

Poker players can make livings/money placing bets too.

Nothing unusual.





Thanks
SP-diceman
FredPeterson
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Post by FredPeterson »

Is that a 30%+ on a static sum of money or has he really compounded 30%+ over the last 5 years?

Quite a few people can develop a system that is hugely successful. Until they need to start doing tens or hundreds of thousands of dollars at a time and the scalability of their system gets wiped out or their profits due to a move against them.

If he keeps using the same $25,000/year or whatever and churns 30% out of it, I can see that far easier then $25k 1st year, $32.5k 2nd, $42.25 3rd etc


If the guy is financially set otherwise, can play around with some cash and make even more and he enjoys it leave him be. Don't try to start blabbing at him about "The Boglehead Way"
freebeer
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Post by freebeer »

FredPeterson wrote:...
Quite a few people can develop a system that is hugely successful. Until they need to start doing tens or hundreds of thousands of dollars at a time ...
Can you cite any evidence or studies that support your contention that systematic market-beating returns are gained by "quite a few people", even on a smaller scale?
xerty24
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Post by xerty24 »

Ask him to teach you, if he's willing, and then try it out with 5% of your "play" money.
FredPeterson
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Post by FredPeterson »

freebeer wrote:Can you cite any evidence or studies that support your contention that systematic market-beating returns are gained by "quite a few people", even on a smaller scale?
Nope, and I don't mean to imply a lot of people. Quite a few is more then a handful, but less then a number anyone would actually care to investigate.
Wagnerjb
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Post by Wagnerjb »

xerty24 wrote:Ask him to teach you, if he's willing, and then try it out with 5% of your "play" money.
Better yet, give him some of your "play money" and tell him you will be satisfied with a guaranteed 20% return. Tell him he can keep all of the excess profits, even if he earns 100%.
Andy
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nisiprius
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Post by nisiprius »

"If we are to suppose a miracle to be something so entirely out of the course of what is called nature, that she must go out of that course to accomplish it, and we see an account given of such miracle by the person who said he saw it, it raises a question in the mind very easily decided, which is, is it more probable that nature should go out of her course, or that a man should tell a lie? We have never seen, in our time, nature go out of her course; but we have good reason to believe that millions of lies have been told in the same time; it is therefore, at least millions to one, that the reporter of a miracle tells a lie."--Thomas Paine
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rwwoods
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Post by rwwoods »

Don't believe the hype that trading doesn't work, Its not unusual for good traders to make 20% or more most years and have little or no losses in down years. If he has a system that works for him, why would you want him to change?
"I'm not so much concerned about the return on my money as the return of my money" - Will Rogers
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floydtime
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Post by floydtime »

Let a lying dog sleep.
lol, my thoughts exactly. But sadly I can never help poking them.
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nisiprius
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Post by nisiprius »

rwwoods wrote:Don't believe the hype that trading doesn't work, Its not unusual for good traders to make 20% or more most years and have little or no losses in down years.
It's not unusual for people to win the lottery, either. Why do you believe this is not just luck?
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
SP-diceman
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Post by SP-diceman »

Morgan wrote:
nisiprius wrote:
rwwoods wrote:Don't believe the hype that trading doesn't work, Its not unusual for good traders to make 20% or more most years and have little or no losses in down years.
It's not unusual for people to win the lottery, either. Why do you believe this is not just luck?
Because with probability mankind has a tragic lust for faith.
Probably.
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kikie
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Post by kikie »

actually, i don't care what he does. he tells me the usual rule is 'not to lose capital' ; i do wonder if it is real; as i thought market timing doesn't work, and so, are there exceptions for skillful people, or are they lucky or delusional, 5 years without loses, makes it seem like market timing can work.....
Those who know do not speak; those who speak do not know.
yobria
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Post by yobria »

I think he's a liar, but he could prove me wrong by posting his next 20 trades to this thread.

Feel free to send him the link.

Nick
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Random Musings
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Post by Random Musings »

Swingers do trade, and it's sometimes more than just money. :wink:

RM
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White Coat Investor
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Post by White Coat Investor »

I've been surprised what a small percentage of investors actually know how to calculate their return, especially after expenses, taxes, and inflation. Not saying he doesn't, but if he didn't, it wouldn't surprise me.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
marco100
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Re: swing trading

Post by marco100 »

paix wrote:i have a friend on Maui, who is retired, and has a business that runs itself.

he tells me he does swing trading and makes 30-100% / year and in the last 5 years only lost in 2008.

tells me he uses all his investments to do this, no "mad money" firewall.
and only trades when conditions are right, i suppose he means when it is 'trending' not 'trading'

just curious what BH would say about this situation.

he says he doesn't need to make the 30% + , but does it as a hobby and for fun .....

i'd 1/2 like to talk him into BH'ing
"30-100%/year" is not a CAGR.

Ask him what is 1, 3, 5, and 10 year CAGR is.

You don't need to ask him specific trading methods as if he actually has any effective ones, I wouldn't expect him to tell you. Nor do you need to ask for a list of trades.

Just ask him what his CAGR is.
FredPeterson
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Re: swing trading

Post by FredPeterson »

marco100 wrote:Just ask him what his CAGR is.
If he even has one. Which is exactly what I was aluding to above.
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Joe S.
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Post by Joe S. »

rwwoods wrote:Don't believe the hype that trading doesn't work, It's not unusual for good traders to make 20% or more most years and have little or no losses in down years.
Do you have any proof of this? Otherwise, I will say "Don't believe the hype that good traders make 20% or more most years and have little or no losses in down years."
Topic Author
kikie
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Re: swing trading

Post by kikie »

is this something an average trader would know ?

or his trading firm would give him, otherwise i don't think he can do the math, nor could i

i just let VG tell me what my annualized return is, even with my super-simplified allocations, too bloody time consuming to track it all

http://en.wikipedia.org/wiki/Compound_a ... rowth_rate


marco100 wrote:
paix wrote:i have a friend on Maui, who is retired, and has a business that runs itself.

he tells me he does swing trading and makes 30-100% / year and in the last 5 years only lost in 2008.

tells me he uses all his investments to do this, no "mad money" firewall.
and only trades when conditions are right, i suppose he means when it is 'trending' not 'trading'

just curious what BH would say about this situation.

he says he doesn't need to make the 30% + , but does it as a hobby and for fun .....

i'd 1/2 like to talk him into BH'ing
"30-100%/year" is not a CAGR.

Ask him what is 1, 3, 5, and 10 year CAGR is.

You don't need to ask him specific trading methods as if he actually has any effective ones, I wouldn't expect him to tell you. Nor do you need to ask for a list of trades.

Just ask him what his CAGR is.
Those who know do not speak; those who speak do not know.
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CaliJim
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Re: swing trading

Post by CaliJim »

don't swing trade enron, or gm when it was going bankrupt!that would be bad for net worth. diversity is the only free lunch. great results are flukes. not reliably reproducable. read the literature about actively trade stock mutual funds vs index funds over long periods. last year's hot active fund will likely underperform it's index next year. They warn"prior performance is no guaranty of future performance" for good reason. nobody can predict the future, too many causes and conditions and the impact of random events outside of anyone's control is HUGE and chaotic.
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bluquark
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Re: swing trading

Post by bluquark »

While we’re going back in time to 2011 to help posters from the past not swing trade, I would throw in a recommendation not to swing trade General Electric either :sharebeer
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rh00p
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Re: swing trading

Post by rh00p »

only trades when conditions are right
I'd say implementing any type of trading strategy during the longest bull market in history constitutes the right conditions :wink:

This includes chimpanzees throwing darts.
Preparing for the worst. Hoping for the best.
Jimmie
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Re: swing trading

Post by Jimmie »

Out of curiosity, the first time I heard of "swing trading", I did some research on the subject. After reading up on it, there appears to be some merit in making money with the method.

In my opinion, this requires plenty of time to perform research on each stock pick and patience to wait out your returns. It is not "day trading". I was fascinated that there is a site "finviz" (financial visualization) that displays a lot of information to help pursue different theories. (Not my endorsement)

For example, many stocks that are "oversold" tend to rebound without tanking worse. The site lists companies that have high amounts of insider buying and selling which can tip off which way the stock price may go. Many of the stocks I looked at had graphs that looked like the company was in a downward spiral regardless of other factors.

My conclusion was that it was not for me. Not even with play money.
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Davinci
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Re: swing trading

Post by Davinci »

he tells me he does swing trading and makes 30-100% / year and in the last 5 years only lost in 2008.

tells me he uses all his investments to do this, no "mad money" firewall.
and only trades when conditions are right, i suppose he means when it is 'trending' not 'trading'

just curious what BH would say about this situation.

he says he doesn't need to make the 30% + , but does it as a hobby and for fun .....
Have you actually looked at his bank account and return statements? Does has money to burn as a hobby and fun? Sounds like gambling to me

Makes 30-100%, really? He always makes 30 to 100% returns and never looses any money.

Ask him to academically prove this:
only trades when conditions are right
" Simplicity is the ultimate sophistication" Leonardo Da Vinci.
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nisiprius
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Re: swing trading

Post by nisiprius »

Never forget the possibility of people lying. Tom Paine wrote:
If we are to suppose a miracle to be something so entirely out of the course of what is called nature, that she must go out of that course to accomplish it, and we see an account given of such a miracle by the person who said he saw it, it raises a question in the mind very easily decided, which is,—Is it more probable that nature should go out of her course, or that a man should tell a lie? We have never seen, in our time, nature go out of her course; but we have good reason to believe that millions of lies have been told in the same time; it is, therefore, at least millions to one, that the reporter of a miracle tells a lie.
They may not even know that they are not telling the truth, though. A friend of mine mentioned to me that she'd spent the weekend in Atlantic City gambling on a casino, and that she had won. It transpired (just chatting, I did not cross-examiner her) that she had won. On Saturday.

Also, she had lost on Sunday.

Also, she had lost more on Sunday than she had won on Saturday. However, she felt that Sunday didn't count because "I stuck to my system on Saturday. On Sunday I didn't stick to my system and I outsmarted myself."
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
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