Has anyone tried to become a stocks/futures/commodities trader?

[Jumpback]

My whole situation right now is a warped thing where an attempt to sell things online and at antique mall so I could have an income to free me up to trade at all hours of the day, has resulted in dealing with things, but no chance to trade

But I like the watching the market changing in real time and the graphs, and on lower volume things, the game of bid and asks and all incoming news about about everything and how to interpret everything. Like I like pro basketball and the excitement of a big game, and it’s a little like this to me. When I can’t watch basketball games, I tend to watch stats in real time and so on...I almost have to be autistic, even though I don’t come across as autistic

Anyway, I guess this seems like an autistic spectrum thing to be interested in, but I haven’t seen anyone mention this.

 

[MyLifeAsAnAspie]

I like playing the stock market by observing the patterns of movement over hours, days, weeks. I am able to come out ahead by this type of trading if the market has lot's of ups and downs like it has recently. When it is just going up the strategy fails, since I follow a rule of only buy after a significant drop in price. I buy only indexed EFTs, so I am trading based on the overall market only.

 

[Jumpback]

I like playing the stock market by observing the patterns of movement over hours, days, weeks. I am able to come out ahead by this type of trading if the market has lot's of ups and downs like it has recently. When it is just going up the strategy fails, since I follow a rule of only buy after a significant in price. I buy only indexed EFTs so I am trading based on the overall market only.

That’s great. I think people usually just see a whole bunch of charts and so on that are impossible to make sense of, but there are patterns. Like people tend to overreact since fear is a stronger emotion that greed

Like when Trump got elected the S&P plummeted overnight during Europe trading hours, since Europeans dislike Trump, but then it went right back up when US hours started since a Republican got elected.

But I can never even get to try to trade since I am stuck with repeated disasters over whatever plans I make to sell things getting foiled by sudden changes in everything and everything has to move around again

 

[MyLifeAsAnAspie]

That’s great. I think people usually just see a whole bunch of charts and so on that are impossible to make sense of, but there are patterns. Like people tend to overreact since fear is a stronger emotion that greed

The most important thing is to stick to a logical plan. You must avoid any fear or greed and this will put you ahead of the crowd who can't do that. This plan is very complicated: buy low, sell high . Of course the instinct is do the opposite and follow the crowd.

Like when Trump got elected the S&P plummeted overnight during Europe trading hours, since Europeans dislike Trump, but then it went right back up when US hours started since a Republican got elected.

This is another strategy I've used. When you see a price go down based on fear instead of actual risk, it's a great time to buy. I've rarely been brave enough to use it. I made a lot on Tyco when the CEO was exposed as a crook.

 

[Jumpback]

The most important thing is to stick to a logical plan. You must avoid any fear or greed and this will put you ahead of the crowd who can't do that. This plan is very complicated: buy low, sell high . Of course the instinct is do the opposite and follow the crowd.


This is another strategy I've used. When you see a price go down based on fear instead of actual risk, it's a great time to buy. I've rarely been brave enough to use it. I made a lot on Tyco when the CEO was exposed as a crook.

I have traded, just not since I put this plan into action

A problem I’ve had related to being brave enough, is when you think you’ve found the bottom and it goes even lower, do you wait it out or dump as soon as you’ve seen you were mistaken and the bottom is lower than you thought? In trading terms, where do you put your stop? It’s easy to end up giving up at the very bottom. I mean, like I think they say to wait for momentum shifts or breakout points before you get in. But I consider the where to put the stop or give up point to be the hardest part of trading.

What I was wanting to do is use different time value expiration options to limit risk and get around the difficulty of the stop problem. Like, for example, if you think something is going to go up soon, buy two, same strike price call options that expire in a month and short one that expires in 6 months. That way, like say if you are looking for the bottom of the coronavirus scare on the S&P 500 and it’s 100 points lower than you thought, since the 6 month expiration option is worth more due to time value factors, you end up not risking very much if you make a mistake on where the bottom is. I mean with this strategy, you lose money with two calls having greater time decay, but if the strategy is only to bottom find for a short time, it’s a lot less scary than and confusing than trying to find the exact bottom with a S&P future contract

 

[Jumpback]

The most important thing is to stick to a logical plan. You must avoid any fear or greed and this will put you ahead of the crowd who can't do that. This plan is very complicated: buy low, sell high . Of course the instinct is do the opposite and follow the crowd.


This is another strategy I've used. When you see a price go down based on fear instead of actual risk, it's a great time to buy. I've rarely been brave enough to use it. I made a lot on Tyco when the CEO was exposed as a crook.

I don't know if you've ever looked into trading futures contracts on the S&P, but options on futures are very actively traded. You can also do things like if you are trying to find the top or the bottom of the market, like buy a future and short an at the money call. It limits your upside, but also limits your downside at least some, plus there is the bonus of you make money from time decay on the option. Plus if the market goes back up the option loses value fast because implied volatility decreases.

I mean, like just if you have a track record of knowing what you are doing, but wanted to try things that really scary because they are easy to mess up, options can help with the risk

 

[Judge]

Anyway, I guess this seems like an autistic spectrum thing to be interested in, but I haven’t seen anyone mention this.

It was how I made a living for close to ten years. Though I finally got out of the market just a few years ago
and retired. The upside? For an Aspie, it represents self-employment without being taxed on earned income. I liked being my own boss, working on my own time. Though stepping away from the market at times even for a matter of hours could potentially be costly.

The downside? You don't want in on this game unless you can ante up with a lot of capital to risk. $50,000 might be sufficient to get the ball rolling, but double it to be more realistic. Money that you can afford to risk. If you can't, run- don't walk away from the market.

Less participants in the market seem to make it riskier each and every year. Institutional managers keep the market stable, yet those "fat cats" conducting "high frequency trading" can and do cause the market to turn on a dime. A market no longer driven by classic financial metrics, but more a matter of 24 hour news cycles. Endless things happening to roil markets in the short or long term.

And I spent a lot of time analyzing the "who" aspect of investments. To know the institutional managers and hedge fund managers, and how long they held onto a stock you are looking at. Taught me to think twice about stocks whose major holders were extremely aggressive hedge fund managers with a reputation for taking the money and running.

And be sure to fully understand the income tax ramifications of your trading. Particularly those involving what constitute "washed sales". You don't want to sell a stock, only to repurchase it within 30 days or less. Otherwise whatever loss you can write off, is ascertained as a gain by the IRS. A good incentive not to indulge in "day trading". In my own case most of my stocks were held for somewhere between six months and two years. The options market didn't interest me, though it's a way many people get their feet wet in the market with very modest amounts of capital at risk.

Is the timing good to get into the market at this time? Sadly it's not like 2009 as it was for me. When I really could- and did "buy low". Right now there's a tremendous gap between the market and the economy at large. Not to mention the real number of Americans out of work at the present. Makes it difficult to feel good about much of any bull market indicators. Seems to me that volatility indexes are still a bit high to be investing in commodities and futures, but that's just my opinion. And of course, the specter of a second nationwide Covid-19 wave continues to linger.

Frankly I'm thrilled not to be in the market at this time. Just too many things to consider. A far cry from simply breaking down a corporate balance sheet to ascertain solvency.

 

[Jumpback]

Though stepping away from the market at times even for a matter of hours could potentially be costly.

This is why I have been in the same predicament for several years. The idea was to gather up a bunch of things to sell online or maybe at an antique mall, so I could trade with my friend from college without needing to have a regular job. But strange things happened and then he kicked me out and killed himself. This problem was solved again, in that my girlfriend and I were going to buy a house and eBay business could be in basement and outdoor shed so I could trade, but she left just before this could happen

The downside? You don't want in on this game unless you can ante up with a lot of capital to risk. $50,000 might be sufficient to get the ball rolling, but double it to be more realistic. Money that you can afford to risk. If you can't, run- don't walk away from the market.

I’m just guessing, but I’m assuming that you are referring to what I was calling the ‘stop’ problem combined with limited income from straight buying and selling stocks without investiing large sums of money?

Like, say, if you have a sort of value buying, swing trade or short term investing approach, if you buy at $20 you might have not caught the bottom and first it goes to $15 before it eventually goes up to $35. A few times of giving up at $15 and you are out of money

Then buying and selling $5000 worth of straight stocks is not something you can make an income on unless you are stupid good and lucky at the start

I was trying to get around these problems by trading options on futures and commodities. Usually with offsetting options of different expiration dates, to take advantage of faster time decay on closer expiration date options

I had also thought of setting very tight stops on futures trades, or in non trading speak sell as fast as I can if I am mistaken and the momentum hasn’t shifted and things go against me even like a $100.

I know what you are saying about the $50k, but that just wasn’t realistic for me, so I was trying to find ways around this

 

[Jumpback]

Is the timing good to get into the market at this time? Sadly it's not like 2009 as it was for me. When I really could- and did "buy low". Right now there's a tremendous gap between the market and the economy at large. Not to mention the real number of Americans out of work at the present. Makes it difficult to feel good about much of any bull market indicators. Seems to me that volatility indexes are still a bit high to be investing in commodities and futures, but that's just my opinion. And of course, the specter of a second nationwide Covid-19 wave continues to linger.

Sorry to split this into multiple replies, I can’t get my iPad to cooperate with highlighting text

I was focused on top hunting using complex option setups on the S&P to take advantage of temporary or perminant plummets using put options on futures. Like buy 10 1800 put options with 6 month expiration dates and short 5 2000 put options with one month expiration dates. Then just wait for a plummet and get out or readjust my strategy. The offsetting options would primarily be to manage risk since I didn’t have $50k, but also to not lose too much do to options naturally losing value through time decay.

The market seeming to be overbought with a low volatility index making options cheap, seemed like a perfect storm for me. Like a Jenga puzzle that could topple very easily. Works especially well when market is stable and then plummets, because volatility index. (VIX) makes option values skyrocket

What I probably would have done after the plummet was build a channel with a call option setup. We are back up to technical resistance levels, so I would probably be cashing out of my call correction and be waiting for the second plummet, and then I’d probably cash out of put setup up because I suspect that the second plummet will be the end of things for a little while

But maybe this is too complicated and I should have just cashed out during the plummet. I need more experience and wisdom and so on, but I have to able to trade to get better

 

[Jumpback]

And I spent a lot of time analyzing the "who" aspect of investments. To know the institutional managers and hedge fund managers, and how long they held onto a stock you are looking at. Taught me to think twice about stocks whose major holders were extremely aggressive hedge fund managers with a reputation for taking the money and running.

And be sure to fully understand the income tax ramifications of your trading. Particularly those involving what constitute "washed sales". You don't want to sell a stock, only to repurchase it within 30 days or less. Otherwise whatever loss you can write off, is ascertained as a gain by the IRS. A good incentive not to indulge in "day trading". In my own case most of my stocks were held for somewhere between six months and two years. The options market didn't interest me, though it's a way many people get their feet wet in the market with very modest amounts of capital at risk.

Sorry, I missed what you mentioned about options and your 6 months-2years trade window in the market when I responded before

I noticed that your profile has ISTJ, I test as INTP. Plus my executive function malfunctions. I can grasp concepts and am very good at putting all the pieces together and seeing the forest, but I miss the trees. Why Aspergers is so hard for me to get diagnosed with or figure out, because, on one hand I am completely autistic, but then on the other hand, I am almost the opposite of what autistic is supposed to look like.

I have undergraduate finance and real estate degrees from one of the better business schools in the country, so I understand detailed analysis of balance sheets and so on, but this isn’t my strength. I struggled to get through accounting classes, partially because this involves sitting still and focusing on something that I have limited interest in

I feel like maybe your approach was finding undervalued companies with balance sheet analysis and buying and holding, but I can’t stay focused well enough to do this, so my interest was more in taking in all information from how people’s influence in the market makes it predictable. Like since traders rely on technical indicators and resistance points, technical indicators and resistance points matter... I’m not sure if this makes sense....

 

[MyLifeAsAnAspie]

I have traded, just not since I put this plan into action

A problem I’ve had related to being brave enough, is when you think you’ve found the bottom and it goes even lower, do you wait it out or dump as soon as you’ve seen you were mistaken and the bottom is lower than you thought? In trading terms, where do you put your stop? It’s easy to end up giving up at the very bottom. I mean, like I think they say to wait for momentum shifts or breakout points before you get in. But I consider the where to put the stop or give up point to be the hardest part of trading.

What I was wanting to do is use different time value expiration options to limit risk and get around the difficulty of the stop problem. Like, for example, if you think something is going to go up soon, buy two, same strike price call options that expire in a month and short one that expires in 6 months. That way, like say if you are looking for the bottom of the coronavirus scare on the S&P 500 and it’s 100 points lower than you thought, since the 6 month expiration option is worth more due to time value factors, you end up not risking very much if you make a mistake on where the bottom is. I mean with this strategy, you lose money with two calls having greater time decay, but if the strategy is only to bottom find for a short time, it’s a lot less scary than and confusing than trying to find the exact bottom with a S&P future contract

I have never used options although I should probably try to understand them to see if they would do anything for me.

I do have a strategy for have missed the bottom (or top). If usually only use half of the mad-money that I am trading with at first. On the rare occasion I badly missed the bottom, I go in with the other half at the new bottom. The same can be done for the top if I'm all in, but usually I'm only half in.

I think I could do well with this strategy if I was diligent at it when the market is behaving favorably. I never learn when to switch strategies for a climbing market and end up sitting out for large chucks of time.

Understand, this is a small part of my investments. My 401K money is robo-managed by Blooom, for example. For stocks I buy and hold, my rule is to only buy companies I'm a customer of.

 

[Jumpback]

QUOTE="MyLifeAsAnAspie, post: 693491, member: 23859"]I do have a strategy for have missed the bottom (or top). If usually only use half of the mad-money that I am trading with at first. On the rare occasion I badly missed the bottom, I go in with the other half at the new bottom. The same can be done for the top if I'm all in, but usually I'm only half in.[/QUOTE]


This sounds like a good strategy. Especially since if you are half in at $20 and half in at $15, even if the stock ends up at $17.50, you make a small profit due to how the math works


The thing with more of a day trading approach is that it only works if you get out super fast if you are mistaken about the bottom. Like limit your downside risk and maximize your upside risk over a very short period


Whereas more swing trading or investing accepts more downside risk


Like if a investor buys at $20 and the stock falls to $18, no reason to panic. But for a day trader this is disaster, since the goal is to be out by the end of the day


In not having much money, it’s hard to take on short term losses so if you are trying to start out trading more professionally, it’s hard to not be a day trader because short term losses can be disterous. Why I was trying to switch to more option based approach. I didn’t want to day trade

I think I could do well with this strategy if I was diligent at it when the market is behaving favorably. I never learn when to switch strategies for a climbing market and end up sitting out for large chucks of time.

Better safe than sorry

 

[Jumpback]

I have never used options although I should probably try to understand them to see if they would do anything for me.

Two main things about options are how their extrinsic value drops faster when they are close to expiration

Time Decay In Options

And how market volatility affects option values

How Market Volatility Affects Options Trading

Interactive Brokers allows you to trade options on almost everything. I got a grasp on them by doing a bunch of watching

 

[Judge]

The market has been overbought for years now. A major reason why I decided to pull out. Buying stock outright is risky business under such circumstances, even if everything else is stable...which seldom ever happens.

With limited funds and the present state of the market, it sounds like options are your best bet. Just be cognizant of how much time you put into it versus what your returns are. At least then it might be an effective way to supplement your income, especially when the market can sway widely in either direction.

It's no secret that full-time trading isn't for just anyone. Without the necessary capital and financial expertise, it's a very tough proposition for much of anyone to make real money in the market.

 

[WoodWorkingJoel]

Trading from home was a strategy I considered but like judge said you need serious capital that you can afford to lose.
I don't have the capital period and I'm way to security focused to borrow for such a venture. I'm also pretty convinced that AI based trading leaves solo traders high and dry. I can't compete with a fiber linked micro transaction data center.
I'll still pop a few Bob into the odd eft and I do hope to get some play money so I gamble a little and see what happens.
As far as living off it long term I find it hard to believe and consider it very high risk.

Would love to hear more from Judge on what you did and the tools you used.

 

[Jumpback]

Trading from home was a strategy I considered but like judge said you need serious capital that you can afford to lose.
I don't have the capital period and I'm way to security focused to borrow for such a venture. I'm also pretty convinced that AI based trading leaves solo traders high and dry. I can't compete with a fiber linked micro transaction data center.
I'll still pop a few Bob into the odd eft and I do hope to get some play money so I gamble a little and see what happens.
As far as living off it long term I find it hard to believe and consider it very high risk.

Would love to hear more from Judge on what you did and the tools you used.

Trading works if you get good enough at it, but it only works because people are involved in the system. If you look at S&P charts over whatever day, you can sort of draw lines all over the place. This is because people build artificial things like support and resistance levels and also people tend to overreact to scary news. I went from $2800 to $6000 in a month, but then I made a disasterous screw up and didn’t take small loses and waited and waited and waited when the market went against me and got under $2000, so I couldn’t trade anymore. It’s not like it’s not possible, it’s just hard because you have to go against your emotions, like I had to accept that I was just wrong and get out but I was stupid and tried to wait for some secret thing to jump in and bail me out for being wrong

Feel free to correct me @Judge, but I feel like your approach was more towards very thorough research oriented value trading. And this just would be very, very difficult in today’s overbought market.

 

[Jumpback]

The market has been overbought for years now. A major reason why I decided to pull out. Buying stock outright is risky business under such circumstances, even if everything else is stable...which seldom ever happens.

With limited funds and the present state of the market, it sounds like options are your best bet. Just be cognizant of how much time you put into it versus what your returns are. At least then it might be an effective way to supplement your income, especially when the market can sway widely in either direction.

It's no secret that full-time trading isn't for just anyone. Without the necessary capital and financial expertise, it's a very tough proposition for much of anyone to make real money in the market.

Thanks. I think right now if I can get in and be able to pay attention to the market when I need to, I would look for peaks and do things buy 10 6 month expiration put options and short 5 1 month expiration put options (because they lose value faster than 6 month put options, so time decay losses aren’t as bad) on the S&P and just wait for dips and cash out. Then repeat. Then try more complicated time consuming things later if this doesn’t go wrong

Like I have seen various temporary drops, like the tsunami in a japan awhile back, or brexit or terrorist attack or bad economy news from China or bad sounding guidance from a major company or whatever else. Usually the market corrects after these temporary scares

Like keep it simple stupid and keep busy doing something else and avoid the trap of endless day trading or whatever

 

[Judge]

Thanks. I think right now if I can get in and be able to pay attention to the market when I need to, I would look for peaks and do things buy 10 6 month expiration put options and short 5 1 month expiration put options (because they lose value faster than 6 month put options, so time decay losses aren’t as bad) on the S&P and just wait for dips and cash out. Then repeat. Then try more complicated time consuming things later if this doesn’t go wrong

Like I have seen various temporary drops, like the tsunami in a japan awhile back, or brexit or terrorist attack or bad economy news from China or bad sounding guidance from a major company or whatever else. Usually the market corrects after these temporary scares

Like keep it simple stupid and keep busy doing something else and avoid the trap of endless day trading or whatever

Sounds like a plan when it comes to playing options. The one way it's possible to make money in a bear or unstable market. Without committing a great deal of capital in the process.

My friend and former business partner has been doing it for years. He'll never get rich at it, but he continues to make money and the volatile disposition of global markets aren't much of a concern to him under the circumstances. It continues to work for him, and it may for you too. Good luck.