Year 2016 is turning to be another dismal year for institutional fund managers on top of a lousy 2015. Some prominent hedge funds are down over -10% already for the year. How has your own trading been? Are you falling prey to the markets like the other sheep portfolio managers?
For those who need some guidance and have joined stock chatrooms, an important question to ask yourself now is how has your Mentor/Leader/Teacher (MLT) been performing in your room the past 6 months? If your answer is terrible or not too well, then it may be time to re-think whether or not your MLT is qualified to be leading a team of traders. During bull markets, EVERYONE makes money, even the dumb. Trust me, I have seen numerous uneducated people turned-daytraders during the internet bubble days in the early 2000's make wads of cash. All they had to do is "chase" stocks up and up and sell them to some other people willing to buy them higher. But when things started to unravel and the market woke out of its hysteria, stocks started crashing and 95% of daytraders ended up losing their shirts and got forced out of the daytrading business. It's because they only knew how to do one type of trading strategy: get long blindly and chase things up.
I am seeing the similar thing happen in micro and nano-cap stocks the past 6 months. There aren't that many "microturd" stocks shooting up to the moon in this bear market anymore as compared to a year ago when the bulls ravaged the bears. No more easy chasing and no more easy shorting the microturd pops. And the end result is what? Many of these nano/microcap traders are having a hard time paying their monthly bills now just like the long chasers of the internet bubble days.
What similarities am I trying to point out in these two examples?
1) One trick ponies do great when times are bubbling for them. But when traders who only know how to trade one type of setup can't find any more trading ideas, they are left in the dust to rot.
2) Traders who cannot adapt or refuse to adapt to changing market conditions are also left in the dust.
What is your solution if you fall into one of these two categories? You need to change your MLT and learn from someone who is adept at trading ALL kinds of markets whether it be a bull, bear, sideways, volatile, and non-volatile market. I have stated in numerous blog posts that times of volatility provide a daytrader the perfect financial conditions to make a ton of cash. The VIX has averaged around 20 the past 6 months and around 25 since the beginning of the year - prime conditions for volatility. As my MookTrader subscribers have witnessed over the past 12 months since we launched, I have one of the most consistent P&L track records around, trading both long and short positions. I employ daytrading and swing strategies that work in every kind of market condition. If you are having trouble right now consistently making your P&L screenshot filled with green numbers, then if means one thing: you need a lot of learning and need to find someone who can guide you in the right direction.
Give MookTrader.com a try. We offer a 1-week risk-free trial to our stock chatroom. I have changed many of my subscribers and mentored a ton of prop traders to lead more financially independent lives. Get in the driver's seat and give me a chance to positively change yours. I have 20 years of professional trading experience -- 8 on Wall Street and 12 trading my own capital. Learn from someone with real hands-on experience and a depth of knowledge instead from those who pretend to know what they are doing.
- Hubert Tsai