# How do you learn about day trading?



## akumaslair (10 November 2007)

hello everyone.

Long time reader, very small poster....

when it comes to day trading, I am a newbie, 

when it comes to shares, I am amateur to novice.

Hypothetical situation......

with a budget of say $100k or  $300k or 500k or 1 mil

what sort of techniques are there in terms of making a small profit, say a few% per day everyday....

basically, I am asking, is there a technique which would allow this and not be a blind gamble...

my 3 second though out suggestion, is eg for bluechips like TLS, the stock fluctuates 10-20c per day, on no particular news, so if you put all of your funds at $4.50 and sell at $4.6, thats 2.2% without brokerage......

is this a dumb method, or are there much smarter ways....

I am very curious, and any input would be appreciated


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## Flying Fish (10 November 2007)

*Re: How do you learn about day trading*

I have 5000$ I just throw it on red or green lol Good luck all


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## explod (10 November 2007)

akumaslair said:


> hello everyone.
> 
> Long time reader, very small poster....
> 
> ...




Good question and not dumb at all, it is the way of many day traders.   There is an array of day trading books outlining such methods.  You should identify what is right for you first then phantom trade till you work out a good little system.  The other way is to buy software that will identify and set up trades for you.   Biggest problem to overcome is when to sell, particularly getting out when it is going against you.  

Time and again you will for example on a sell off from Wall Street see BHP or AMP drop a few dollars in the first half hour only to regain it later in the day.


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## So_Cynical (10 November 2007)

akumaslair said:


> what sort of techniques are there in terms of making a small profit, say a few% per day everyday....
> 
> basically, I am asking, is there a technique which would allow this and not be a blind gamble...



No u cant make a small profit everyday...not everyday is a good day.

Whatever techniques u use to trade your still gona have to make 
decisions and sometimes u will get it wrong....stops will limit the loses.


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## akumaslair (10 November 2007)

thanks everyone.

so I got/get the idea that you can't win all the time.

how many different techniques for are there??

and what would be the safest day trading technique....

eg. I know you could put it on some mining share which is about to either announce the biggest find or about to go bankrupt in one day, ie the sp is either going to jump from 3c to 20c in one day or go from 3c to ZERO in one day.

my idea would be to put it in a bluechip or can you say follow the DOW and if that rises then to buy all ords as you would normally expect the all ords to follow DOW...


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## Porper (10 November 2007)

akumaslair said:


> thanks everyone.
> 
> so I got/get the idea that you can't win all the time.
> 
> ...




I think you need to do at least 3 or 4 years study first amumaslair.

If you follow the Dow on open you will lose your funds, various studies have found this to be unprofitable as the XJO often opens high and closes lower after a positive finish on the Dow.

Walk before you try to run,maybe invest small at first on a fairly long time frame and get a feel for how the market works.

I've only dabbled in day trading and found it highly stressful.


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## Timmy (10 November 2007)

Your points about why you want to daytrade are good ones - turnover of capital, making $x per day.  Knowing what it is you want is not that common (I want to trade to make money is not enough of a definition of goals IMHO), but is vital.  Trading some instruments are better for your goals than trading other instruments.  In the case of daytrading ASX stocks, if you want to do that, CFDs might be the best choice (DMA of course).

The first thing to do, before taking any trades, is to read as much as you can on this website about trading techniques, whether they be day-trading techniques or not.  Read with the intent to study.  Read posts from posters who have been posting a long time (rules me out) as generally longevity is a sign of success - its not a perfect correlation but is something.  

There is a LOT of information here, some of it good, some not so.  There are also many, many other boards with a similar distribution of information, find these boards (policy does not permit posting links), study the good posts.    

When you're done reading, and this will not take a week or so, play around with ideas without risking money on them, this is more of the research stage.  If you are going to day trade then you will need software, at this stage buy some and a live data feed and spend a few more months testing your ideas.  By now you will have a good handle on some techniques which are more likely to bring you success and its time to start trading with small amounts, sort of the transition from testing to trading, the small amounts are for not just for protection of your capital while you are new to the game, but serve this function well.

I think following a route like this will give the best chance of success. 

There are shorter routes - weekend course, packaged software, CDs, etc. but your likelihood of success is not as great - its not zero, but its close.  

Stick at it, don't lose sight of what you want to achieve.


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## nizar (10 November 2007)

akumaslair said:


> hello everyone.
> 
> Long time reader, very small poster....
> 
> ...





Hi Akumaslair,

Firstly, if you don't mind me asking, why do you want to daytrade?

You can make good money by trading longer term such as end of day (which means you have to take action once a day) or weekly (which means you have to take action once a week).

With these longer term methods, there is:
*Less brokerage fees
*Less screen time
*Less stress
*Possibility of dividends.

And Im not sure about your situation, but another plus for me is that I can work outside earning a full time wage, yet trade at the same time.

With daytrading, there is so much emotion involved, and especially for those with no method (sorry but buy at $4.50 and sell at $4.60 is not a method, and i will explain why shortly), you will be trading based on fear and greed, and in the heat of battle, these decisions will often be irrational.

To do any sort of trading, be it longer term, or daytrading, you need to have a trading plan/system. I don't trade a system unless it has been exhaustively and strigently backtested and proven to have worked in the past, with a high likelihood of being profitable in the future.

In this plan/system you need to know:

*What to buy.
*When to buy.
*How many to buy (money management)
*When to sell and take a loss ( risk management)
And yes, it is better to lock them in rather then waiting for a recovery  
*When to take profits.

Let's take your TLS example. It's by no means dumb, it just shows you are not yet ready to trade profitably.

Say you buy at $4.50, firstly, how many do you buy?
Secondly, what would you do if it drops immediately?
How do you know how much room to give it to recover before deciding its a dog and running for the hills?

All these questions need to be known and quantified before you can begin.

So be prepared to spend the TIME and MONEY required for education in understanding concepts such as expectancy, and building a trading system to give you confidence.

I can go on for hours/pages talking about this, but perhaps at this stage its better if you ask specific questions. There's alot of very smart people on this board that are more than willing to help.

There is also a lot of information and resources on my blog and you may find useful, and a list of recommended reading.

All the best with your trading,

Nizar.


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## tech/a (10 November 2007)

> basically, I am asking, is there a technique which would allow this and not be a blind gamble...




Seek and you shall find.

*This is how you do it.*
Took me 3 yrs to find it and I should charge you $10,000 for the secret.

*First though some background.*

Timmy is partially on the right track.You must have good technical knowledge and I suggest learning how to read the tape.I strongly suggest VSA (Volume spread analysis) coupled with any other form of analysis you become expert in.I'm not going to give you the application of that analysis but will say there are educators out there that will (Radge is one,Gavin From Tradeguider another).

You will need to alter your time frame to 15 min 60 and 120 min time frames(Or similar) so you'll need Real time charting. Once you understand "The secret" it wont be stressful at all.

You need to understand timing and entry *ARE* all important in this type of trading.This is where strong analysis---expert analysis is important.

You *MUST* wait for the trade to develop and come to you.

And now for the *SECRET*.
You must alter your thinking to Reward to Risk.
*ONCE YOUR IN A TRADE*
Thats what you trade---REWARD to RISK nothing more.
Once in a trade thats all you do.

Below is a chart with a setup I'm trading I wont go into detail on how I found it but will show you MY application of Reward to Risk.
Take care of R/R and you'll never worry about profit regardless of Capital you use.
Just private mail me for address for cheques and money orders.
Oh and when you do get good at this you can expect win rates well above 60%


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## Trembling Hand (10 November 2007)

I would suggest a mix of learning by reading and practicing by live trading with very small amounts of money at the same time. You could spend a lifetime reading about trading and never get a sense about how this game plays out. 

There is nothing more clearer than looking at a static chart days/weeks after it traded to see all the profitable opportunities. Then there is not much harder an activity than taking out small consistence profits from a fast and ruthless volatile market.

If you never hit the Buy button while you are learning you will never get any feedback. It’s like learning how to drive a car without any practice or how to paint without ever picking up the brush. You would simply never get anywhere. The best education is by doing.

During your L plate trades you will be able to feel out what you like and what you don't and this will lead you in a direction of where you should be concentrating your efforts. This game has endless ways to approach it and one of the biggest hurdles will be finding a 'system' that suits your personality and unfortunately most will tell you that there way has advantages over other approaches. In reality what makes sense for one trader will just create friction and distress for another.

There is a few things that no matter what your approach is are vital for success. Money management, perseverance, a love of markets(this doesn’t mean money), a big bank roll, good record keeping and refection on your records.

Just forget about making money you are training not trading. Use 1 share CFDs trades just to see how hard and important good entries and exits are to day trading.

After 100 trades you will have a better education than 10 books. If you can add 100 trades, 10 books, and a good review of your results you will have saved a lot of wasted time learning stuff that may not suit you.


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## akumaslair (10 November 2007)

Hello everyone,

thanks for your advice... i take all advice seriously... even the ones I think are silly, I will not dismiss it right away..

I will try and answer a few questions that have been posted...

I guess in the past I have always been interested in shares, I traded a lot in the 90s, didn't do too well, took a few years off, tried a few different things. a few winners and losers, but this year for me has been above average.  I also was investing $3k back in the 90s, now I have a bit more to play with.  I also thought to myself, the big boys, as in the wealthy people, they surely must have a smarter way to put their millions in their shares... and I am not reffering to the company directors and share experts, I am referring to the wealthy people who obviously don't control companies......(hope I make sense).  also, I currently run my own business which is tought but requires me to be in front of a pc all day anyway, (flexibile business), also I have spare time compared to a few years ago.

I find share trading to be exciting, I enjoy the excitement, I however do not enjoy the excitement of putting a lot of $$$ on roulette...

I feel that now I am prepared to invest more $$$, I need to and want to research more, and I want to have a more active participation instead of buying something and let it sit for the long term.  This I have/am already done/doing so thats no problems at all...

I subscribed to a share subscription service about 12 months ago (Ill leave out the name as it hasn't got much positive feedback), however it wasn't that much money, I followed a few of their tips and basically, out of the 15 recommendations they made, 13 ended up in the RED, however, I actually did not sell when they recommended  for the last few stocks, and all have gained 10-50% in 12 months, so which I am thankful for... this share subscription service had a personal education section, which I read all of it, and it taught me to set limits for losses, putting only 10% of your $$$ into a stock, taking the emotion out, and l;earning to sell at a loss if it happens, so it has been worth it... I feel that I want to be a bit more active then buying every 3-6 months........, I don't feel the need to trade 4 times a day, but 1-5 times per week would be a bit more involvement

I hope I haven't waffled on too much..


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## tech/a (10 November 2007)

> How do you learn about day trading?




Thanks for your information about where your "AT".

From this I will be frank in answering the above question in quotes.

You are no where near ready to trade shorter term.
Learn first how to turn consistent profit longer term.


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## akumaslair (10 November 2007)

that is fair enough....... what sort of experience do you consider for someone to be ready>???


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## greggy (10 November 2007)

akumaslair said:


> that is fair enough....... what sort of experience do you consider for someone to be ready>???



Having traded for the last 28 years, I reckon that its best to start with a fictional portfolio for a year or so to begin with.  Research all the companies in your fictional portfolio and read as much as you can about financial matters. It may even be a good idea to subscribe to a financial newspaper such as the AFR. Also, if you know of traders whom you trust, speak to them about their experiences. You might realise that the volatility involved is too much for you to handle.  
If you do decide to day trade, start off with small amounts. Know all those companies you intend investing in back to front before investing in them. I made my worst mistakes during my early days. Risk does work both ways.
Good luck.


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## tech/a (10 November 2007)

> that is fair enough....... what sort of experience do you consider for someone to be ready




Experience.---
You appear to have a good start in that you are business orientated.

That which I have offered above does say it all,but I will expand a little.

You've asked specifically about "Day Trading" I note that your thinking more short term than strictly day trading.
No problem the same applies.

Lets say you sell items for a living as an example.
You can sell very large items which when sold return a huge profit but take a great deal of time to sell.
OR
You could sell lots of smaller items with less profit in each but due to volume gain a huge return.

So learning how (Not necessarily the what) makes the profit and knowing its application is a must.

I'll digress to something *BRILLIANT* I saw the other day.
*Reverse Auctions*.

I cant remember the exact figures but.

I guy had a classy home to sell on the sea front. He could ask $1.2mill for it and make a conventional gain upon the sale.
He chose to reverse action it.
Bidders were charged $10/bid and the *LOWEST single * bidder got the house.So if you were one of 2 that bid $1 you weren't the lowest single bidder.

He got over 250,000 bids (not the exact figures) so his return was massive.

Here in lies the secret to his over the top success.
Short term trading is very similar,with an eye on your return to risk,sensible leverage and compounding---need I say more?

Bring out the entrepreneur in you!


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## akumaslair (11 November 2007)

yes  I agree... buying a share at 2c and for it to hit $50 in a few years would be fanatstic but almost like one in a million.....

that reverse auction concept is quite interesting,..

I guess the only problem you would have to worry about is at $10 per bid and only 100,000 bid on it.... then that would be a very painful day....


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## Trembling Hand (11 November 2007)

akumaslair said:


> I currently run my own business which is taught but requires me to be in front of a pc all day anyway, (flexible business), also I have spare time compared to a few years ago.
> 
> I find share trading to be exciting, I enjoy the excitement, I however do not enjoy the excitement of putting a lot of $$$ on roulette...




Have not seen anyone in their own business devote time on a separate business/project that wouldn't of been better spent making the first biz more profitable.


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## tech/a (11 November 2007)

TH 

I'll have a beer with you one day.

My core business is civil works.
Property developement began as an aside.
The civil business keeps me in a manner I'm not accustomed.
The property developement secured me for life and still do it.
Trading--thats a side line.


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## Trembling Hand (11 November 2007)

tech/a said:


> I'll have a beer with you one day..




Have never turned down a chance for a beer. Will drop you a line next time I'm in S.A.



tech/a said:


> My core business is civil works.
> Property development began as an aside.
> The civil business keeps me in a manner I'm not accustomed.
> The property development secured me for life and still do it.
> Trading--that's a side line.




Just a guess, how many hours in front of the trading screen looking at the market including premarket prep and post market prep etc. would be needed to to become profitable as a short term trader/daytrader?

I do minimum 10 hours a day. And run and grow a biz? I think you would end up being an avg punter in both trading and running you biz trying to do both.


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## tech/a (11 November 2007)

Whats profitable?

In terms of $s,its more the years of finding the above (The secret) that if I placed an Hrly rate on and the software,feeds,and other times as you suggest
which certainly make your statement a truism.

But in the end if your in the position to trade sizable amounts $200K plus then you could well say that the end was indeed worth the effort.

This is a topic in itself one which Id be happy to discuss on the boards or over a beer.


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## caleb2003 (11 November 2007)

akumaslair, I personally have found that short term trades have been more stressful than daytrading as the volatility has been so high, holding overnight is a complete lottery unless you're in it for the longer term (anyone who had shorted rio in the last few days would know this, i'm glad I didnt).

I think theres some excellent info here from the more experienced hands but big ones to avoid on the asx 200 are the opening half hour and the 30 minutes after close (if you use some bucketshop providers like IG) as these times can be truly erratic and blow away a days profit.

Trading on the Hang seng index has been great recently as the intraday trends have been excellent but holding overnight is extremely risky as it can gap over your stop by a long way.

My experience has been one of being ill disciplined initially and this cost me $$$$ and some great lessons but phsychology has played a major part in consistency.

I am not anywhere near as experienced as the others to have commented here but only other thing I'd say based on your quotes is that you stated that stocks excite you, I think that your emotions should be put to the side as trading will stress you too much when it goes against you.

Hope that helps


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## wayneL (11 November 2007)

A little passage from the Tao Te Ching:

He who understands much, says little
He who understands little, says much

At over 5000 posts, that perhaps means I'm the last person you should listen to, but be careful who you listen to.

But FWIW, from one of my posts on day trading from earlier this year.



> An Interesting blog article from a bloke with a bit of credibility:
> 
> 
> 
> ...




Notwithstanding, day trading is incredibly simple, it ain't rocket science, there are no "secrets", only techniques and basic maths. The hard part is the head game.

Sort the maths, manage the emotions, and success is likely. Few manage to do this however, which exposes the difficulty.

No charge.

Good luck


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## tech/a (11 November 2007)

Your inuendo is inflamatory.

Your ability as a moderator at best is poor---no inept.

Your contribution to this thread is 3rd grade, most 10 yr olds can cut and paste.

Time and effort spent assisting others DIRECTLY with their questions is looked upon as self serving.



> A little passage from the Tao Te Ching:
> 
> He who understands much, says little
> He who understands little, says much
> ...




Un necessary and un warrented.
You abuse your position.


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## nizar (11 November 2007)

wayneL said:


> Notwithstanding, day trading is incredibly simple, it ain't rocket science, there are no "secrets", only techniques and basic maths. The hard part is the head game.
> 
> Sort the maths, manage the emotions, and success is likely. Few manage to do this however, which exposes the difficulty.
> 
> ...




Hi Wayne,

I agree daytrading has the potential to be much more profitable than longer term trading.

A super smooth equity curve, a high level of opportunity/frequency, and decreased market exposure are wonderful characteristics that only high frequency trading can offer.

BUT i must disagee that it is, as you put it, incredibly simple.
To trade multiple times a day using a mechanical system is something that is rare.

And to trade intraday on a discretionary basis requires years of experience, wouldn't you agree.


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## akumaslair (11 November 2007)

thanks everyone... 

I may have come across as saying that I though daytrading was the be all and end all..... i wouldn't mind day trading if the risks were lower then a short term trade, but I guess the risks would be similar if you had similar or sensible stop losses....

I guess this brings up another question, which I hope is not going too off topic.

I understand due diligence, which I use for other areas.... for the long term stocks, eg mining.... then I would say its quite obvious.. its just the when.....

however, how do you find out the performnace of a company in the short term...are we intending to trade based on no news and taking advantages of the small gaps that are created by low volumes... or are we intending to trade based on the expectations on  some news, which I find to be a bit risky...

the reason I question the above is I see lots of experts, traders, long term traders, brokers and basically anyone who is or thinks they are good.... get it soooo wrong.... they can't even explain it themselves...  I can name heaps of examples (not proclaiming to be an expert) eg SDL.  I believe it was a recommended buy at about 60c by a few leading brokers.... it went up to 85c or similar, and now its back down to 50c........

what I am asking is, if even these guys who supposedly study these stocks full time can get it so disastrously wrong, how can we all have a chance.

I hope I am not blabbering on...


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## sleepy (11 November 2007)

_"You must alter your thinking to Reward to Risk.
ONCE YOUR IN A TRADE
Thats what you trade---REWARD to RISK nothing more.
Once in a trade thats all you do.

Take care of R/R and you'll never worry about profit regardless of Capital you use."_

Hi John,

Never a truer word spoken. In elite sport this is referred to:

'Process vs Outcome'
- If one totally concentrates on the PROCESS (e.g., watching the ball, executing the pass) then the OUTCOME (e.g., scoring a 100, winning) will take care of itself. 

By the way ... How are you getting your R/R to appear on the chart? (i.e., what application are you using?)

sleepy


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## wayneL (11 November 2007)

tech/a said:


> Your inuendo is inflamatory.
> 
> Your ability as a moderator at best is poor---no inept.
> 
> ...



So as a mod, I'm not entitled to participate in discussion and give an opinion?

Puleeeze!

My post has nothing whatever to do with my role as mod, so your focus on that is nothing short of tempestuous nonsense. 

Name calling would be a 10 year old thing I would have thought.

Back to day trading eh?


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## tech/a (11 November 2007)

> A little passage from the Tao Te Ching:
> 
> He who understands much, says little
> He who understands little, says much
> ...




Participate all you like but refrain from the inflammatory rubbish like the above.
You breeze in then shift blame onto your victim--me in this case.

Had *YOU* stuck to the topic These posts would not be here!

An apology at anytime will be accepted.

Anytime you wish to demonstrate the simplicity in real time I'm sure we all will be intrigued.
Oh he's talking stock not options.
Look forward to some expert demonstration.
Oh and yes I'm happy to!


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## IFocus (11 November 2007)

> I find share trading to be exciting, I enjoy the excitement




If you want excitement try sky diving, trading and excitement makes for a heady mix creating behaviors not very suitable for long term success. 

Cost / liquidity / scale wise futures offer a better alternative for day trading. It can be done with stocks if you can find the volatility  but a high degree of skill is required IMHO its simpler to trade the swings in a bull market and you are likely to make much larger profits.

Focus


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## nizar (11 November 2007)

nizar said:


> Hi Wayne,
> 
> I agree daytrading has the potential to be much more profitable than longer term trading.
> 
> ...




Wayne can you please respond to my post as to how daytrading is incredibly simple.

Thanks.


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## sleepy (11 November 2007)

Hi John,

Not sure if you missed my post ...
How are you getting your R/R to appear on the chart? (i.e., what application are you using?) ... or did you manually put those on?

sleepy


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## wayneL (11 November 2007)

nizar said:


> Wayne can you please respond to my post as to how daytrading is incredibly simple.
> 
> Thanks.



Much is written by me and others on the topic. It's not hard. The psychology is the hard part.

Quite prepared to go into technique when I have some time, but bear in mind I might not necessarily know anything.

Caveat Emptor


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## chops_a_must (12 November 2007)

nizar said:


> BUT i must disagee that it is, as you put it, incredibly simple.
> To trade multiple times a day using a mechanical system is something that is rare.
> 
> And to trade intraday on a discretionary basis requires years of experience, wouldn't you agree.




I dunno. The highest probability trades appear to be very short term or intraday in nature.

TH, if time consumption is a factor, why not advise specialising in one sector/ instrument/ future etc.? Especially if the person only wants to make a handful of trades a week.

It sounds kind of similar to where I'm at. So my advice to someone at this point at the same time, who only wants to do a few trades, is to look at high probability set ups. Opens, closes, for starters perhaps.


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## wayneL (12 November 2007)

nizar said:


> BUT i must disagee that it is, as you put it, incredibly simple.
> To trade multiple times a day using a mechanical system is something that is rare.
> 
> And to trade intraday on a discretionary basis requires years of experience, wouldn't you agree.



A couple of points here:

* I never said anything about trading mechanically. I must agree that a "mechanical" system that works is rare. That said, Nick has one that works very well on indicies.

* A daytrading system need not trade "several" times a day. I don't. I'll take perhaps one trade on any particular chart... maximum two.

* If not mechanical, it need not be totally discretionary either. It can be rule based. An example of the is the "dummy a day" method as mentioned in various blogs. You can't get much simpler than that. eg http://maoxian.com/archive/category/trading-for-dummies/

"Simple" is in the context of some other ways people make a living. It is a bit more complicated than stuffing envelopes for a living, but compared to medicine or law, ludicrously simple.


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## tech/a (12 November 2007)

*Akumasliar*

You'll find there are many who 
"Talk the talk"
Few "Walk the walk"

*Sleepy* I have PM'd you.


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## akumaslair (12 November 2007)

yep....I am not looking for something ridiculous like 20% per trade 3 times per day.... something realistic and consistent would be good, so I guess would 2%-3% per trade, say 2-3 times per week be a realistic expectation>?


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## Trembling Hand (12 November 2007)

akumaslair said:


> yep....I am not looking for something ridiculous like 20% per trade 3 times per day.... something realistic and consistent would be good, so I guess would 2%-3% per trade, say 2-3 times per week be a realistic expectation>?




That’s just not relevant. What you have to concentrate on is this,

Expectancy = (Probability of Win * Average Win) - (Probability of Loss * Average Loss) 

Your aim is to have this positive. Forget about looking at yesterday’s results and thinking there was a 2% move I could of got. You failure to even mention any losses just tells me that you need to do a couple of small trades to bring you in line with reality. 



chops_a_must said:


> TH, if time consumption is a factor, why not advise specialising in one sector/ instrument/ future etc.? Especially if the person only wants to make a handful of trades a week.
> 
> It sounds kind of similar to where I'm at. So my advice to someone at this point at the same time, who only wants to do a few trades, is to look at high probability set ups. Opens, closes, for starters perhaps.




Yeah you are right. Concentrate on a couple of trades that you find or think you found that have a high prob. But that goes back to my point about time being better spent on your first biz.
A couple of trades a week is a hobby. Be careful when running a biz your hobby doesn’t steal time and money from what pays the bills.


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## akumaslair (12 November 2007)

ok.. fair enough...

where/how do I start....this is what I am a bit confused...


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## Trembling Hand (12 November 2007)

akumaslair said:


> ok.. fair enough...
> 
> where/how do I start....this is what I am a bit confused...




Start doing.

Read stacks... trade a little....then read more...trade a little..the repeat again


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## nizar (12 November 2007)

akumaslair said:


> ok.. fair enough...
> 
> where/how do I start....this is what I am a bit confused...




READ my initial post #8 in this thread.


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## nizar (12 November 2007)

trembling Hand said:


> A couple of trades a week is a hobby.




Well i beg to differ.

I treat my trading like a business and take it very seriously, and so do others that I know whom also trade weekly timeframes, which means a couple of trades a week at best.

Every business requires RESOURCES and incurs EXPENSES.
Its not uncommon for a business to not be profitable in the first year.

I don't see why trading should be treated any differently.


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## tech/a (12 November 2007)

Nizar.

I think TH meant in the context of short term to day trading.

Mind you I wonder if there were traders doing that with say $500k and pulling 5% whether that would be a hobby?


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## Trembling Hand (12 November 2007)

nizar said:


> Well i beg to differ.
> 
> I treat my trading like a business and take it very seriously, and so do others that I know whom also trade weekly timeframes, which means a couple of trades a week at best.
> 
> ...




Nizar I just meant if you are looking to do a couple of day trades a week that really is not going to get you far. I know people can make very good money doing just a couple of hours a week 'work' on the market. But in the context of learning and starting small and all that goes with that you are up against it as in being a big $$ spinner. Not that there is anything wrong with that.


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## gavank (29 November 2007)

Hi a good question that I asked myself at the beginning of this year after 20+ yeARS OF TRADING..... i NEEDED TO MAKE A LIVING IN THE MARKET AS i HAD RETURNED TO UNI  to do my PhD in Chemical engineering / Metallurgy

Anyone can trade successfully If your logical and are willing to learn/ and analyse your feelings / decissions.
Learn from your mistakes or better still from someone elses

After carefull analysis of my past I devised a system that works

411 trades this year
6 losses this year , to date
up just over $121,000 for the year  and that is only trading the first hour of the day on tuesday , wednesday and thursday.... I must be back in the chemistry Lab by 9 am each morning ready and raring to start my research labs 

its easy ....  beats teaching wheich I have done for the past 30 years.... 

want to know more ???

just ask
its easy


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## prawn_86 (29 November 2007)

Thats sounds interesting Gavan.

i dont know much about short term trading, but that win:loss ration seems huge. > 400 wins vs 6 losses would be almost unheard of imo. I was under the impression that short term trades will have a higher loss ratio.

Also, can i ask what % you are up? As stating a figure means nothing really. 

Is it a mechanical system, or does it use your personal discretion?


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## gavank (29 November 2007)

All I  trade is shares under 50 c , the cheaper the better
I trade on momentum and only if the previpous day has seen a volume in excess of 10, million  + at least 4500 trades
I wont compromise.... they are my entry / alerts to even consider the4 trade

there is a lot more  ive written , but too much to post on this \site

I have a group of students who follow me and my tips each day and often sit with me in the library at market open to watch and ciopy my trades

its easy
I have a pen, a book to record what I need to track my interesting stocks

I must have active trading for the stock - 1 per second, roughly, I want 3 times as much buyer interest as sellers and wont even look at a stock till it has sold at least 5 million the following morning.
I dont bottome fish
I dont want the lowest price
Most of my trades last for between 30 seconds and 5 minutes
I dont hold any stock overnight

hope that helps a bit

My average gain on a 3 cent stock is 2 cents------ $600 per trade
10 c stock gain also 3 to 4 cents


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## gavank (29 November 2007)

I only trade 1000 to 2000 per trade and make 30% to 100 % per trade
I will take 100 if i have to .... I am strict that as soon as the balance of power changes  (buy sell ratio - prefereably 3 :1) Im out of there.... 100 profit or even 20 profit is better the a loss
small but steady always wins i FIND


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## Wysiwyg (29 November 2007)

The 6 losses must have been during the July - August correction


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## Kauri (30 November 2007)

gavank said:


> *411 trades this year*
> *6 losses this year , to date*
> up just over $121,000 for the year and that is only trading the first hour of the day on tuesday , wednesday and thursday....
> *its easy* .... beats teaching wheich I have done for the past 30 years....
> ...




 I would have been interested to hear what you do until I read the above...  No way I would tag someone else until they can trim their losses to a more acceptable level..   
Cheers
........Kauri


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## Kauri (30 November 2007)

Gavin,
        How solid are your rules... the chart of ORO was posted by Kennas after your post on 10 Jan... I don't for the life of me see 10, million volume..and the chart is Weekly to boot!!!..
Cheers
........Kauri


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## chops_a_must (30 November 2007)

prawn_86 said:


> i dont know much about short term trading, but that win:loss ration seems huge. > 400 wins vs 6 losses would be almost unheard of imo. I was under the impression that short term trades will have a higher loss ratio.




No. Short term traders have a high win ratio, but a low r/r. It's not unheard of for scalpers, gap and range players to have win ratios of 80% or more. But this win ratio, I don't believe...


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## wayneL (30 November 2007)

chops_a_must said:


> No. Short term traders have a high win ratio, but a low r/r. It's not unheard of for scalpers, gap and range players to have win ratios of 80% or more. But this win ratio, I don't believe...



Even 80% I have "difficulty" believing without some concrete evidence over a longer term (not just a one way market). Hells Bells, I'd be turning over millions per day with that sort of confidence and be driving around in a Bentley... so would anyone actually achieving that.


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## professor_frink (30 November 2007)

wayneL said:


> Even 80% I have "difficulty" believing without some concrete evidence over a longer term (not just a one way market). Hells Bells, I'd be turning over millions per day with that sort of confidence and be driving around in a Bentley... so would anyone actually achieving that.




I can get an 80%+ success rate- just set my profit target to 1 tick, and my stop at 20, and I should get there. Not sure that would get me a bentley though. A datsun maybe


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## wayneL (30 November 2007)

professor_frink said:


> I can get an 80%+ success rate- just set my profit target to 1 tick, and my stop at 20, and I should get there. Not sure that would get me a bentley though. A datsun maybe



Well let's look at that.

Expectancy=((1 + reward/risk ratio) * win/loss ratio)-1

=((1 + .05) * .8)-1

= -0.16

 Perhaps a second had pair of Reeboks stolen from the Salvos bin.


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## professor_frink (30 November 2007)

wayneL said:


> Well let's look at that.
> 
> Expectancy=((1 + reward/risk ratio) * win/loss ratio)-1
> 
> ...




NOOOOOOOOOOOO!

The search for the holy grail continues


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## Timmy (30 November 2007)

This thread has become very interesting.  I like momentum methods.  You have a nice one there gavank, well done!  There is also a momentum trading thread over on the FX forum here.  

WayneL the point you raised about achieving high (80+%) success rates and therefore hugely increasing position size is a good one but I don't think it applies in the case of gavank's method; the instruments being traded are lower priced shares so liquidity is going to be a concern preventing loading up position size too aggressively.  It would be relevant though in FX where bigger positions can be taken more readily.

I am looking forward to hearing more from gavank on his method on this thread!  Using market depth to gauge sentiment I find challenging given the ease with which buying and selling interest can be pulled, so changing the picture, please expand gavank.


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## wayneL (30 November 2007)

Timmy said:


> This thread has become very interesting.  I like momentum methods.  You have a nice one there gavank, well done!  There is also a momentum trading thread over on the FX forum here.
> 
> WayneL the point you raised about achieving high (80+%) success rates and therefore hugely increasing position size is a good one but I don't think it applies in the case of gavank's method; the instruments being traded are lower priced shares so liquidity is going to be a concern preventing loading up position size too aggressively.  It would be relevant though in FX where bigger positions can be taken more readily.
> 
> I am looking forward to hearing more from gavank on his method on this thread!  Using market depth to gauge sentiment I find challenging given the ease with which buying and selling interest can be pulled, so changing the picture, please expand gavank.



Agreed there, but I'd be interested in proof of such a high win rate from a momentum method. 

Also, why limit your earnings with microcaps, when you can really crank up position size on other instruments?


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## Trembling Hand (30 November 2007)

gavank said:


> 411 trades this year
> 6 losses this year , to date
> up just over $121,000 for the year  and that is only trading the first hour of the day on tuesday , wednesday and thursday.... I must be back in the chemistry Lab by 9 am each morning ready and raring to start my research labs
> 
> its easy ....  beats teaching wheich I have done for the past 30 years....






gavank said:


> All I  trade is shares under 50 c , the cheaper the better
> I trade on momentum and only if the previpous day has seen a volume in excess of 10, million  + at least 4500 trades
> I wont compromise.... they are my entry / alerts to even consider the4 trade
> 
> ...






gavank said:


> I only trade 1000 to 2000 per trade and make 30% to 100 % per trade
> I will take 100 if i have to .... I am strict that as soon as the balance of power changes  (buy sell ratio - prefereably 3 :1) Im out of there.... 100 profit or even 20 profit is better the a loss
> small but steady always wins i FIND




411 trades so far this year that’s 3 per day as you only trade 3 times a week and only the first hour.

An average win of 66% for low priced stocks up to 35% average for ten cent stocks.

Only A 1.5% chance of a loss.

That is an extraordinary achievement by anyone’s standard.

I just have two questions. 

1.	With such incredible results why have you not increased the size of your trades.
2.	Why have you only made $121,000 in that time. When I look at those figures I get something like 250,000 achievable,


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## happytrader (30 November 2007)

trembling Hand said:


> 411 trades so far this year that’s 3 per day as you only trade 3 times a week and only the first hour.
> 
> An average win of 66% for low priced stocks up to 35% average for ten cent stocks.
> 
> ...




Trader Gavank appears to be an extremely fastidious fellow. I wonder if in fact the methods employed allow him and his students to remain undetected and 'fly under the radar'

Cheers
Happytrader


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## wayneL (30 November 2007)

happytrader said:


> Trader Gavank appears to be an extremely fastidious fellow. I wonder if in fact the methods employed allow him and his students to remain undetected and 'fly under the radar'
> 
> Cheers
> Happytrader



LOL. We're all flying under the radar in here.


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## Flying Fish (30 November 2007)

great thread


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## 1stunnedmullet (5 December 2007)

1. immerse yourself in this from the beginning, *lots* of reading and research in stall for you.

2. don't merely copy ones tried and true system, they've spent years finding that system and what works for them! you will follow the same path as well..trade with a time frame/system/goals/risk.reward that fits your personality

3. keep it simple, how you going to make short/sharp decisions in a fast moving market with 50 indicators to analyse. knowing inside and out 1 or 2 indicators is just as valuable

4. know your risk the moment you pull the trigger and dont let that ever change..*discipline
*
5. whoever says this is easy is full of sh**, their gleaming P&L sheet they hold with such pride for the year can be canned the moment they think their bigger than the market


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