I read those comments from Alan and Brandon, and I can tell you that with stocks, at least in the pre-April 2000 period, if a "trader" was wrong, he would just hold on a bit longer and be bailed out by the bull. Of course, that person did not know that they were "saved" by the market, and not by his skill.
When I first started trading futures in 1996, I paid a little "tuition" to the market too, and discovered that my stock techniques were simply inadequate. I was "good enough" to make money in stocks, but I was nowhere near good enough to do the same in futures. The reason is with stocks, you have the public to help push your position in a big way, and it is not like that with futures. The entire Net craze was a once in a generation mania that was fueled by the fact that at the post IPO stage, most of these companies had practically zero public float. Supply and demand caused the parabolic rise and later, as stocks left the lockup stage, the subsequent fall. A futures trader is taking the other side of the bet with another trader, and it is a zero sum game.
That said, it still does not change anything in the big picture. Trading is trading, and in the wake of the dead bull, even stock traders are no longer able to "trade". They'll blame it on decimalization or the new PDT rules, etc., but in the end, one must look into the mirror and acknowledge the reality that for most, they simply did not have a method. They did not realize that the rising tide lifted all boats.
I can say all this now, because after the initial failure to make money, I decided to re-examine my total approach to trading and found that all the techniques and indicators that I used were completely useless. I was basically a good psychologist and tape reader. I know this is a heavy statement, but the fact is that prospective traders are told all the time what to use and how to use it, but are never given any of the reasons why any of the techniques/indicators actually work. I realized that most of the things that I had picked up were non-methods, or simply wrong methods. I threw out everything I knew and started from scratch. The key was to make a model of price action, and then devise ways to trade it properly. It took about six months, and from that time on, life has been just swell.
So, yes, good luck to those who wish to try futures trading. My only advice is if one does not have the funds to meet the PDT rules, then it is most likely that they will meet a quick demise in futures trading using the same methods as they did on stocks. The only good news is that if one spends time to work on the approach, it works on everything that trades with volume. You've seen me use the same techniques on the 1 minute S&P chart as I do the monthly U.S. dollar chart. If I can do it, others can too.
T.
P.S. I am very happy that Victoria is now with us. She was a star in Linda's room, and now, she shines on us at trendVUE! |
