A recent "discussion" on the discussion board about being profitable has opened my eyes as to what has been going on out there within the community. As some readers have shared their results, it is apparent that these market conditions have been tough on some of them. You can see that in the level of participation, lack of familiar names, etc. However, as I have done this over the last 2 years I have noticed that there are always going to be people that are losing money. Even during what some would consider an easy market, there were always fatalities. Whether is is due to a lack of risk management and diversification, or improper position sizing, not fully understanding the strategies they are participating in, or applying a trading system/strategy/approach that doesn't work.

In my opinion, losses are an important part of trading. However it is up to you to determine how much of a loss you take before you start to realize and figure out the reasons behind them. For most of the recent e-mail that have come in, I find that a lot of these losses are blamed on a "tough market." I don't believe that. In my opinion, the reasons are based on how you are approaching this tough market.

In a volatile market, trading is tough to manage. Signals, prices, and indicators change daily which results in a lot of over-trading, emotions, over-priced options, and mixed results. However in a volatile market, investing is a lot more easy to manage. Essentially you have an idea that you know will materialize over the next few months and you stay with that idea until it happens.

How do you decide? Easy! What do you want to do with your money? What type of returns are you looking for and what are you willing to risk to get them?

If you have the ability and or a system that can outperform an investment portfolio that doesn't put your money in jeopardy, go for it. If you are not as confident in your ability to approach a shady market or outperform an investment portfolio, don't risk it.

Here is what I want you to consider, and what I am considering in return. Think about what would do more for your money right now...moving it in and out of options, or perhaps investing it in a few ETFs? First off in terms of risk, where is your money more likely to be lost? At the same time, where is your money likely to see the best returns? Everything is a balance of risk/reward. I have been able to manage my risk in this market fairly easily, and as a result my returns are stable..but not where they normally are. I am approaching 25%, but this is a lot less than where I normally am 4 months into the year. The difference? I am trading smaller position sizes and taking a few more losses. As a result, it takes longer to accumulate gains.

Having read that a lot of traders out there are struggling with their results, I want those people to re-think their strategy. This site accumulates a lot of traders that are newer to the market and therefore expectations and experience are usually tougher to manage. The good thing is that the resources are here. They may be a little unorganized, but they are here.

As I continue to try and provide timely ideas, education, and insight to help enhance your trading,  you ought to ponder your approach right now and make sure you are confident in what you are doing with your money. If you are not sure how to implement my trading ideas, are you doing the right thing with your money? For those that want to see the other side of this equation and see what a portfolio of ETFs can do, I am considering a model portfolio that will illustrate the type of returns you can get and the amount of risk you'd need to put forth. I was thinking $25K and 5 to 10 ETFs. I'll update the poll today so you can register your vote to whether or not you'd find this useful.