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Active trading
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I promise this is not a trolling post/question! Do you all do any active trading at all? My general philosophy is definitely in line with Bogle: long term buy and hold low cost broad index funds, dollar cost average over time. But I’ve found selling options, particularly against cash or highly liquid index ETF—as I don’t generally own specific individual underlying stocks/companies, has been very lucrative. Just curious on your thoughts.
Top Comment: I’ve got $22 in a Robinhood account. I’m up $2
Trading Elite Active 75t for Elite 7 Active and Hoping for the Best
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TL;DR: My 75t was RMA'd, so Jabra is sending me a 7 Active as a replacement, and I hope it works out.
Long Version: I bought a set of Elite Active 75ts on 20JAN2022. By June/July 2022, the battery life for the headphones would not last longer than about 45 minutes. This is from a full charge. I would check the app, it would show 100% on the battery power for both earbuds, and about 7 minutes later, it would show they were at 9%. Within the next 40 minutes, they powered off. Truly baffling and frustrating, especially for someone who normally spends about 1.5 hours in the gym. I reached out to customer service, and they decided to RMA (Return Merchandise Authorization) my device. I sent my earbuds over to them about 3 weeks ago. They recently came back and said, ostensibly, they will be sending me a new pair; however, the Elite Active 75ts are out of stock everywhere in every color (this is a little strange as they can be found on Jabra's Amazon Store, albeit only 1 pair is shown to be available and for 250% more than what I paid for them back in January of this year). They said they are instead offering me an upgrade to the Elite 7 Active. After some research with mixed results (including some on this very subreddit), I decided to take the upgrade. I'm hoping that this will be a true upgrade and not just a shunting off of a product that doesn't do what I bought it to do.
I will update once I get my new headphones, but in the meantime, how was everyone else's experience between these two headphones? Pros and cons of each?
UPDATE: i have had my 7 Actives for about a week now, and they're pretty good. i see what people mean about the lower base in comparison to the 75t, but that doesn't bother me. i turned up the mid just a bit, and it sounds great to me. the personalized ANC is VERY valuable in the gym. i can pretty much listen to anything (music, youtube videos, podcasts, etc.) in the gym noise-free. the ear fitment is the same as the 75ts (i had a little trouble with them getting loose every now n then as well), but i could probably try different bud sizes to get something perfectly secure. overall, for me, it's an upgrade. i like that the design of the case and the earphones themselves are overall sleeker than the 75ts which are kind of chunky in comparison. being able to use either earbud solo is a big value-add as well. hope this helps someone down the road.
Top Comment:
7 actives are great for me. They have a better fit (smaller and lighter), look better (matte finish), and being able to use the left earbud alone is key for me. I haven’t had any issues using them.
My 75t actives were also great (no issues after an RMA). Bass has better punch and depth on bass heavy music. Calls are better when made in absolute silence, but slightly worse with noise and worse in a breeze.
Both the 7 actives and my 75ts work, but when I’m reaching for headphones on the way out, I’m usually grabbing the 7 actives.
Is there any real edge in actively trading unless you work for a large institution?
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So I wanted to post this because I was having a conversation with a friend of my dad's the other day. He is an older gentleman and he talks all the time about how he trades the market, reads the paper, etc., and trades based on what he sees.
I asked him "what is your edge that allows you to generate above-average returns?" and his reply was "well I'll take a look to see what is going on with the stock and based on what I see I will trade-off of it. So for example, if Tesla was in the news and has been hot lately, I will look at the chart and maybe put a position on based on the sentiment of where I think the stock is going."
I made the argument to him that, that is not an edge and all you are doing is no different than gambling and justifying your trades based on a false assumption that you know something the market doesn't. Everything you are looking at is already priced in, and in the long run, there is no edge to this type of trading.
Am a wrong for thinking this? The reason I ask is because back when I graduated high school, I got sucked into the world of active trading and thinking you could generate above-average returns. However, after years of research and real experience, I find that indexing with a long-term horizon is the best option for both tax purposes and sanity of mind. I don't really think anybody can successfully time the market.
I would appreciate it if somebody with more experience than I do can comment on this and point me in the right direction, or if I am thinking about this the right way. However, it would seem to me that the only real statistical edge you can find in a competitive market would be by working at a large institution to have the resources to discover such opportunities.
Thanks!
Top Comment: Is he consistently beating the market over time? I’ve known a few people that seem to beat it but maybe they’re just lucky.
Lost more money actively trading than holding index funds
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Felt like I needed to get this off my chest. I got greedy and just wanted to make a quick buck like I was living in the Big Short movie since it feels like we are in that moment. No matter how many hundreds of hours of research I did or learn (useless) chart patterns and trading indicators, i still got wiped clean with a 99% failure rate. I learnt the hard way that you just can’t beat the market as a retail trader... I made more losses trading and shorting this damn market than I would have lost in index funds during the flash crashes in March earlier this year. In fact, I calculated that even if stocks crash by a further 50%, I would have still lost less money holding index funds than I would have trying to time the crash... Now I’ve lost 3 months of wages and feeling pretty shit about it.
Top Comment:
#dontdaytrade
Active trader pro or is it really Novice trader junk?
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I started trying to use ATP, just as I use TOS.
Today my long held RBLX jumped nicely after earning; I tried to enter an after hours trade in ATP, we Gomer there is no way to set up an EXT trade in ATP!! Go to the website and shazzaam there is little button enabling ext. trades; Did I miss a setup option? Only thing I can see in ATP trade pop-up are type of order and TIF (Day, Good 'til cancel, Custom).
Called the rep, his answer is, your account is already setup for Ext. hours trade so dont worry! I guess they didnt teach that in Mayberry!
Levity makes life fun.
Top Comment:
Whats with the Fidelity-bashing? You have a specific trading issue, so ATP is officially a POS?
People, slow down. Lay down that roller brush.
Edit: Lol. Kudos to FidelityOscar for low key calling you out 😁
Do you actively trade stocks?
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Sometimes I wish the efficent market hypothesis/passive investing was never discovered. I think stock investing is a tremendously intellectual pursuit, it's really a shame that I can't enjoy it as to me its little more than gambling.
I invest in RE, which for obvious reasons is active. What do you actively invest in?
Top Comment:
Gambling can also be intellectual and very mathematical. But unlike gambling, most pros are shit at winning the stock market.
People who are active traders: What does your daily routine look like?
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Could you guys just give me an insight as to what a day looks like for you? I assume you wake up at the ass crack of dawn to check world markets/news...do you place trades every day I assume? Any info would be cool!
Top Comment:
I'm a daytrader. I build a watchlist the day before, and usually wake up around 5-6 am central time (CT) to check how things are setting up premarket and adjust my watchlist and then I eat breakfast. The first hour after the open is when I make most of my trades. By the time I make a trade I already have a plan for what to do in case of X, Y, and Z, etc.
10 am-1 pm CT I rarely trade....usually try to distract myself with Netflix/Reddit and eat lunch....but still keeping an eye on the markets. The last hour things pick up and I might do some more trades. I rarely hold positions overnight.
After the market closes, I record my P/L and trade details in a spreadsheet and also make notes in a journal. I also start building my watchlist for the next trading day and I'm usually done with all that by 5 pm CT.
Some days I completely skip if nothing looks good, but most of the time that's what my weekday routine looks like. 11-12 hours a day focused on the markets...and often times I do research at night as well.
A cautionary tale on active investing
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Hi all, Just wanted to share my story to illustrate how important it is to stay the course.
I used to be a volatility trader. That is, up until 2 days ago.
For those of you who are unacquainted with the short vol trade, it's essentially a bet that the S&P 500, the heart of the US economy, will stay calm or regain equilibrium after a shakeup. It's amazingly profitable due to the natural mean reversion property of the VIX, and tailwinds from the way several of the volatility ETPs are structured. Sounds solid, yes? I thought so too.
100% of the time in the past, after a volatility event, products like XIV and SVXY would suffer a large drawdown, and then after some resolution is reached with the original catalyst (or enough time has passed, volatility gets crushed). VIX futures begin to fall soon after to catch up with spot, and within mere weeks, XIV/SVXY recovers to its original price and then some! So, buying on these dips and holding until a recovery became a rudimentary strategy that piqued many others' interests, and spawned a plethora of well-backtested indicators, algorithms, systems, a subreddit, really an entire community. For many of us, including myself, our systems were the hedge.
The last week or two, volatility had been steadily rising in response to multiple recent events, and so I averaged down exactly as how my strategy would have me do, buying large chunks of XIV at what seemed to be support points. By the time XIV was down to 122, I had run out of cash. I was all in - not that it mattered, of course it would recover well beyond where it started - after all, it has done this every single time since the introduction of VIX futures 15 years ago. To be fair, there were some warning signs such as an objectively terrible futures curve shape and the volatility of volatility products themselves. I had overridden those signals in my system to chase the dip, against my better judgment!
All that changed Monday afternoon, right after 4 PM. The price went from 99 to 20, all in a matter of 15 minutes after the closing bell, where no stop loss could have helped. The indicative value of XIV was reported as being 4.22, an absurdly low number we all thought was a mistake at the time. Turns out there was no mistake. Both Feb and March VIX futures spiked up an unprecedented 110%, which never even happened during the Great Recession. This basically destroyed short vol products in one fell swoop. My final losses were 97%.
After I calmed down enough to think straight, I did some back-of-the-napkin math. If I had simply taken the chunk of money earmarked for active trading, dumped it into VTSAX, and forgotten it existed, I'd be up $25k right now. Instead, I'm down $56k. More than an entire year's worth of working hard and frugally saving, obliterated. 8% erased from my FI/RE progress.
So, there you go. As far as traders go, I'm probably a fair bit more sophisticated than your average mom-n-pop trend chaser. I had deep knowledge of the products I was trading. I've done my due diligence on the risks, created a risk model, quantified them, used that to create a system... but in the end, none of it helped.
I still don't know where I'm going after this. Short vol is still a solid trade but it became immensely more risky in my eyes now since as the tail risk exposure feels much more real. I expect the volatility complex itself to stay more volatile until the trade gets less crowded, and the market as a whole becomes healthier (consider that 74% of growth in the past 9 years came from corporate stock buybacks, purchased with money raised from debt offerings, only made possible by the absurdly low interest rates).
What should most people take away from this story?
The stock market will shit on your face when you try to get smart with it. Buy VTSAX and forget anything else exists.
For myself, I don't know if I can go back after being redpilled. I'm considering a core position of 80% /ES and 20% /ZN futures, rebalancing on a regular basis, and substitute with UPRO/TMF in places where I can't do futures. I think my volatility trading system still has value, but I would use it with MUCH smaller allocations and hedged with far OTM VIX calls.
Thanks for listening.
EDIT:
Thanks for all the comments and feedback everybody. I am a bit thrown off kilter by how unsupportive the majority of comments are... I'm just trying to show people what could happen if you get too cocky and greedy with a high-risk-high-reward trade, and that it's definitely not for everybody. I just lost a ton, I realize I made mistakes, can you get off my case now? If everybody who posts a cautionary tale gets insulted and downvoted they might as well not bother posting at all.
- Many are saying the strategy was fundamentally stupid to start with, but I feel like they literally don't understand the mechanics behind the trade and how to hedge risk. I guess you think Citadel/Two Sigma/Jane Street/etc. are all stupid too? Look up who the top holders of XIV were. I keep using that word 'hedge' over and over again, but, that was really the only thing needed to turn what was a total blowout into a minor setback.
- Another misconception people keep saying is that the prospectus plainly states the long-term EV of all volatility products is 0; keep in mind I do not hold these things long term. I knew this, but XIV/SVXY aren't as much of a hot potato as you might expect due to the way it works and some properties of its underlying holdings, e.g. the lag between a spike in spot vix and a respective rise in the corresponding futures. A key to this is because of greed I ignored the warning signs.
- Stop losses don't work overnight. The reason for not getting out before EOD is because you'd otherwise be missing out on the majority of the movement which kinda defeats the purpose.
- Risk management is key, obviously. My allocation was well justified; following the Kelly criterion would have me all-in, even when overstating the probability of a total loss. The amount I lost hurt for sure, but it was the tractor, not the farm.
Top Comment: Wow I'm surprised some of these comments are as aggressive as they are. I want to thank you for this post because it reminds us that although we think the market is scientifically proven, it comes with risk. To everyone saying how foolish he was, yes, but hindsight is 20/20. It could happen to the best of us so don't underestimate animal spirits and keep calm. Best of luck.