Oh for sure. Falling for the hottest thing right now is a quick and easy way to lose more money and time. Good point! No one is immune to it but at least talking about it can bring awareness and even if only one person avoids this mistake it is worth it.
quite a revelation! so thx for sharing! [to stick within one area however works only if you already found your domain, right? what if you're still looking for the right one?]
I still think you should stick to a single asset class , especially if you had spend more than a year learning the ropes of it. Within each asset class you can trade swing, short-term , technical etc so the type of trader you are is not really up to the asset class but the trading style. Having said that, if you are into equities you can explore intraday trading or swing trading and see for yourself what suits you better, but switching from equities to options often 1 year of trial and error might not be the wisest thing to do.
thx! a trader starts in one asset class then, by chance, pure 'accident' or random recommendation, right? and if it fits somehow, (s)he learns the trade. just wonder: HOW on earth could you START with preferred stocks?!? must have been working for a company?!
/
(bc this seems so way out of the 'normal' course of things. would have rather guessed, preferred stocks and CEFs are something one discovers long after having dealt with, well, FX or ETFs at first maybe, then stocks and bonds, and then, at the end, even after derivatives, you'll find CEFs & preferred stocks!)
//
[ancillery, if there's 3 min to see through; however, addressing a probably unwanted backfiring conclusion prob contrary to the purpose of your article
/
your article imo works strong on the reader bc it convinces with palpable experienced truth in it. this in fact helps, and is needed, as can be seen further below. and the writing here is straight to the point, not artificial. which makes strong style, good to grasp in a flow.
/
thus I read it twice already, and sent it to my fellow traders. we had other probs, however, so far. some started in crypto, made 6-7 figures in 21, lost it all 22 down to 5-4 figures again ... by mistakes other than the bogged-down-dissipation-mistake clarified by you. now we try to come back and have to learn from the strongest. that's why we'll keep sharing your insights among others (till we've re-grown enough to upgrade)!
/
one of us is only 18, quit his apprenticeship at 17 and decided to only trade. mostly $BTC perpetuals, on ByBit (I think). he works hard to capture his data driven edge, and it worked well in 22; clearly a counter-trend-trader (so far). but a long way to go after one great loss in 23 ... and it's not even sure to a layman if BTC-perpetuals are sustainable at all?!
the rest of our small herd atm is not solely dependend on constant trading successes, but to see this maybe up-and-coming youngster (also a sometimes reader of substacks) in his exposed situation without Plan B ... that sometimes hurts to see without getting daunted to the spinal cord. that's why it carries quite a way to get clarified here: sticking to 1 asset class can/should be superior to assett-hopping. even when stuff shifts South.
(for different questions & details of course there will be more advice needed ...)
/
one thing however, and here comes the backflip maybe to the message your article conveys: boy seems committed in an absolute way, never looks left nor right. which might also be a mistake on the other side of the range of 'committedness'. he will not even visit an investment fair taking place close to him, bc he sticks incessantly right there at the market, in front of his 2-3 screens. [he's not overtrading, though, with 2-3 well prepared trades a day. but he does take no break neither to network nor to get out of his asset-trading(-bubble). so I'm even reluctant to send HIM this your last article; his conclusion will foreseeably be: "see, it's better I keep incessantly sticking to my trade&trading and not go out of my space. an investment fair will be a waste of time, this event just scatters my attention, time and strength. to connect to others is not needed when instead I can constantly keep working within my own field."
but this is not necessarily the intended conclusion, right?
the investment fair will of course not only cover BTE-perpetuals ... where to draw the line then between distraction and further education? without diluting the clear message: stick to your trade!
/
((sorry for the long text, had not more time to shorten it :-)
/
also fun what your Header surely intentionally hints at: "Heard on the Trading Floor" = "herd on the trading floor". cu there
Anon08, you got it right, I got into preferred stocks by pure chance. It happened when I joined the prop trading firm I worked at back in 2007. We were basically market makers in preferred stocks prior to the rise of HFTs. I would say traders get into an asset class by popularity/recommendation or depending on how low the barrier to entry is. Often the deciding factor is capital required to start. In FX , crypto and futures you get quite the leverage, hence the reason many new traders chose these routes. This route simply requires less cash to start. Corporate credit is on the other spectrum which requires a lot of capital to start (if trading your own money). That is why most credit traders are Portfolio managers for funds/banks.
As to the story with your young colleague, it certainly helps hearing other points of view and learning about new asset classes especially if you are trying to use them in a supplemental way to your existing trading patterns. For example a trader who is active in bitcoin perpetuals may also find it useful to learn how to trade bitcoin options within the parameters of his strategy. That would not be considered asset hopping but rather improving your current domain through knowledge of other assets , BUT ONLY FOR THE PURPOSE of improving the trading within your domain. In the article I mentioned a few times that asset hopping is bad ONLY if you leave aside your bread and butter strategy to pursue profitability in a brand new field. This is what I did a few times and regret. I have talked about that in the publication:
"If I can send across a simple message with this story is that you can learn the basic concepts of other asset classes by thinking about how you can use them in conjunction with your current trading style and trading patterns. This will force you to learn about the things that are only applicable to you"
The young trader can certainly find value from going to an investment forum or talking to traders who are active in other asset classes but should use the new knowledge to build on his existing knowledge. As I mentioned options earlier , maybe he can have a better risk profile by doing a put/call spread in bitcoin rather than buy the perpetual. Maybe he can short premium to boost returns on his longs. Maybe he is an intraday trader and doing short DTE options will be best suited for him. I have no clue, these are merely random thoughts about the ways your friend can use new knowledge to improve his trading strategies. But again the most important thing is to use the new knowledge to improve his existing trading strategies.
The mistake I talked about in the article was leaving a profitable asset class and profitable trading strategies for the sake of growing and finding more liquid and volatile instruments. So I left what worked for me to study something brand new. This is the big mistake.
NOW ... this reinforced addition 'sealed the deal', got it 100%.
[yes, you hit it totally with your intuition of the young trader being a daytrader, where options will fit right in etc.! poah, talked to a pro today => 1 clear step ahead. thx, have a great weekend, too!]
Great stuff ! Thank u for sharing. Having a disciplined/controlled mindset as well & not to be swayed into the hottest in thing like 0DTE options now
Oh for sure. Falling for the hottest thing right now is a quick and easy way to lose more money and time. Good point! No one is immune to it but at least talking about it can bring awareness and even if only one person avoids this mistake it is worth it.
quite a revelation! so thx for sharing! [to stick within one area however works only if you already found your domain, right? what if you're still looking for the right one?]
That is an excellent question.
I still think you should stick to a single asset class , especially if you had spend more than a year learning the ropes of it. Within each asset class you can trade swing, short-term , technical etc so the type of trader you are is not really up to the asset class but the trading style. Having said that, if you are into equities you can explore intraday trading or swing trading and see for yourself what suits you better, but switching from equities to options often 1 year of trial and error might not be the wisest thing to do.
thx! a trader starts in one asset class then, by chance, pure 'accident' or random recommendation, right? and if it fits somehow, (s)he learns the trade. just wonder: HOW on earth could you START with preferred stocks?!? must have been working for a company?!
/
(bc this seems so way out of the 'normal' course of things. would have rather guessed, preferred stocks and CEFs are something one discovers long after having dealt with, well, FX or ETFs at first maybe, then stocks and bonds, and then, at the end, even after derivatives, you'll find CEFs & preferred stocks!)
//
[ancillery, if there's 3 min to see through; however, addressing a probably unwanted backfiring conclusion prob contrary to the purpose of your article
/
your article imo works strong on the reader bc it convinces with palpable experienced truth in it. this in fact helps, and is needed, as can be seen further below. and the writing here is straight to the point, not artificial. which makes strong style, good to grasp in a flow.
/
thus I read it twice already, and sent it to my fellow traders. we had other probs, however, so far. some started in crypto, made 6-7 figures in 21, lost it all 22 down to 5-4 figures again ... by mistakes other than the bogged-down-dissipation-mistake clarified by you. now we try to come back and have to learn from the strongest. that's why we'll keep sharing your insights among others (till we've re-grown enough to upgrade)!
/
one of us is only 18, quit his apprenticeship at 17 and decided to only trade. mostly $BTC perpetuals, on ByBit (I think). he works hard to capture his data driven edge, and it worked well in 22; clearly a counter-trend-trader (so far). but a long way to go after one great loss in 23 ... and it's not even sure to a layman if BTC-perpetuals are sustainable at all?!
the rest of our small herd atm is not solely dependend on constant trading successes, but to see this maybe up-and-coming youngster (also a sometimes reader of substacks) in his exposed situation without Plan B ... that sometimes hurts to see without getting daunted to the spinal cord. that's why it carries quite a way to get clarified here: sticking to 1 asset class can/should be superior to assett-hopping. even when stuff shifts South.
(for different questions & details of course there will be more advice needed ...)
/
one thing however, and here comes the backflip maybe to the message your article conveys: boy seems committed in an absolute way, never looks left nor right. which might also be a mistake on the other side of the range of 'committedness'. he will not even visit an investment fair taking place close to him, bc he sticks incessantly right there at the market, in front of his 2-3 screens. [he's not overtrading, though, with 2-3 well prepared trades a day. but he does take no break neither to network nor to get out of his asset-trading(-bubble). so I'm even reluctant to send HIM this your last article; his conclusion will foreseeably be: "see, it's better I keep incessantly sticking to my trade&trading and not go out of my space. an investment fair will be a waste of time, this event just scatters my attention, time and strength. to connect to others is not needed when instead I can constantly keep working within my own field."
but this is not necessarily the intended conclusion, right?
the investment fair will of course not only cover BTE-perpetuals ... where to draw the line then between distraction and further education? without diluting the clear message: stick to your trade!
/
((sorry for the long text, had not more time to shorten it :-)
/
also fun what your Header surely intentionally hints at: "Heard on the Trading Floor" = "herd on the trading floor". cu there
Anon08, you got it right, I got into preferred stocks by pure chance. It happened when I joined the prop trading firm I worked at back in 2007. We were basically market makers in preferred stocks prior to the rise of HFTs. I would say traders get into an asset class by popularity/recommendation or depending on how low the barrier to entry is. Often the deciding factor is capital required to start. In FX , crypto and futures you get quite the leverage, hence the reason many new traders chose these routes. This route simply requires less cash to start. Corporate credit is on the other spectrum which requires a lot of capital to start (if trading your own money). That is why most credit traders are Portfolio managers for funds/banks.
As to the story with your young colleague, it certainly helps hearing other points of view and learning about new asset classes especially if you are trying to use them in a supplemental way to your existing trading patterns. For example a trader who is active in bitcoin perpetuals may also find it useful to learn how to trade bitcoin options within the parameters of his strategy. That would not be considered asset hopping but rather improving your current domain through knowledge of other assets , BUT ONLY FOR THE PURPOSE of improving the trading within your domain. In the article I mentioned a few times that asset hopping is bad ONLY if you leave aside your bread and butter strategy to pursue profitability in a brand new field. This is what I did a few times and regret. I have talked about that in the publication:
"If I can send across a simple message with this story is that you can learn the basic concepts of other asset classes by thinking about how you can use them in conjunction with your current trading style and trading patterns. This will force you to learn about the things that are only applicable to you"
The young trader can certainly find value from going to an investment forum or talking to traders who are active in other asset classes but should use the new knowledge to build on his existing knowledge. As I mentioned options earlier , maybe he can have a better risk profile by doing a put/call spread in bitcoin rather than buy the perpetual. Maybe he can short premium to boost returns on his longs. Maybe he is an intraday trader and doing short DTE options will be best suited for him. I have no clue, these are merely random thoughts about the ways your friend can use new knowledge to improve his trading strategies. But again the most important thing is to use the new knowledge to improve his existing trading strategies.
The mistake I talked about in the article was leaving a profitable asset class and profitable trading strategies for the sake of growing and finding more liquid and volatile instruments. So I left what worked for me to study something brand new. This is the big mistake.
NOW ... this reinforced addition 'sealed the deal', got it 100%.
[yes, you hit it totally with your intuition of the young trader being a daytrader, where options will fit right in etc.! poah, talked to a pro today => 1 clear step ahead. thx, have a great weekend, too!]
Thank you, enjoy your weekend!
great take, thank you!
Thank you!