Current returns for 2008/09 financial year?

[Mr J]

sold my $27 parcel at $20 so take a capital loss on stock for finnacial year but still a profitable overall trade

Until your $13.50 half starts dropping. You simply doubled down on a losing trade, hoping it would turn around. Fortunately for you it has so far, but what if it hadn't?

 

[Trembling Hand]

thanks people for your concern my philosophy is to get on a smaller company with buying support and ride it up a little and get out before others dump it

for larger cap stocks with good fundamentals i am happy to hold if they drop
i will dollar cost average if they fall seriously
wesfarmers bought at $27 then $18 and took up the $13.50 offer
averaged at $19.12

sold my $27 parcel at $20 so take a capital loss on stock for finnacial year but still a profitable overall trade

In hindsite of course you would say no now but was FMG a "larger cap stocks with good fundamentals "

 

[ivant]

In hindsite of course you would say no now but was FMG a "larger cap stocks with good fundamentals "

Love the post

 

[Mr J]

Mmm. Good example of the pain of trying to turn a loser into a winner. In a game that allows extreme movement either way, I would've thought letting winners run and cutting losers short would be the logical way to go .

 

[sleepy]

uhm lol. TH is a freak. It is extremely risky because 99.9% of other traders will blow the entire $800, or whatever he started with in no time if they try to trade the way he does, without sufficient/similar experience.

The real reason 99.9% would fail using TH's method is that they would NOT be prepared to do the work to learn and practise the necessary skills needed (i.e, deliberate practise). Nor would they constantly review each and every trade, etc.

You have to practise, practise and then practise some more. Its all about screen time, years off it.

sleepy

 

[tech/a]

I would've thought letting winners run and cutting losers short would be the logical way to go

Logical yes.

The real question for EVERY trader to answer with regard to your logic (Whether they agree or not) in both Hold or Sell is.

WHEN

 

[jonojpsg]

Hey jono,
I started trading seriously in 2005 and made 150% (20k to 50k) over the next 18 months. Was stoked obviously but come end 2007 I made a couple of MAJOR mistakes, ie NOT USING STOP LOSSES!!!!! Rode AED all the way down and lost 10k, then stupidly thought that CIty Pacific was a good buy at $2ish and rode it down, currently my 12k in that trade is worth about $500

So I must add my support to the MUST CUT LOSSES and ride winners crew.

Oh, and I think for the 08/09 year so far I am running somewhere in the negatives (~-20%), mainly because of the CIY and AED trades.

my

 

[beamstas]

thanks people for your concern my philosophy is to get on a smaller company with buying support and ride it up a little and get out before others dump it

for larger cap stocks with good fundamentals i am happy to hold if they drop
i will dollar cost average if they fall seriously
wesfarmers bought at $27 then $18 and took up the $13.50 offer
averaged at $19.12

sold my $27 parcel at $20 so take a capital loss on stock for finnacial year but still a profitable overall trade

Let me get this straight

Bought 1 lot at $27
Bougth 1 more lot at $18
Bought 1 more lot at $13.50

That's epic, epic, epic averaging down. I really hope this works for you every time. Cause the day it doesn't work your going to lose the lot

sold my $27 parcel at $20 so take a capital loss on stock for finnacial year but still a profitable overall trade

How can you make a capital loss on a trade that is profitable?
Can you please fill me in
Im sure a few of my clients will be happy to know they can do this!

 

[So_Cynical]

Its all a matter of "WHEN"

Stocks go up and down all the time....all the short term traders posting here
have sold XYZ at a small loss only to see it turn around a day or 2 later.

Averaging down works, most of the time, given time, if you've got the time....and do it with a plan.

 

[Mr J]

Logical yes.

The real question for EVERY trader to answer with regard to your logic (Whether they agree or not) in both Hold or Sell is.

WHEN

When to let winners run and cut losses short? I don't think so, as I think it is always the aim of a good trader. I say the real question is why. If done for the right reasons, letting losses run may in fact be letting winners run (if we think a trade needs more room to move), and cutting winners short may in fact be cutting losses short (if we think that the trade has run its course).

 

[MichaelD]

Stocks go up and down all the time....all the short term traders posting here
have sold XYZ at a small loss only to see it turn around a day or 2 later.

Yep, and back in they go again, capital intact, a few days later.

Averaging down works, most of the time, given time, if you've got the time....and do it with a plan.

Yep, it works most of the time, given time, until it doesn't...and then it blows your account up.

Meanwhile, those controlling losses just keep taking small hits, waiting for the big home runs to come home and pay for the bacon.

 

[nunthewiser]

In hindsite of course you would say no now but was FMG a "larger cap stocks with good fundamentals "

LOL sorry mate i totally disagree

FMG always been a dog of a co run by a spindoctor thas all


great trade stock tho

 

[tech/a]

When to let winners run and cut losses short? I don't think so, as I think it is always the aim of a good trader. I say the real question is why. If done for the right reasons, letting losses run may in fact be letting winners run (if we think a trade needs more room to move), and cutting winners short may in fact be cutting losses short (if we think that the trade has run its course).

You say why I say when.
The why needs a point in time which becomes the when.(Decision time).
Who's on first?

 

[Nero64]

In hindsite of course you would say no now but was FMG a "larger cap stocks with good fundamentals

I don't think you can compare FMG and Wesfarmers. Yes both have debt but Wesfarmers has liquid assets that it can generate cash from quickly.

FMG hit $13 on a lot of speculation. It hadn't even sent its first shipment of iron ore yet.

I agree averaging down can be risky even on defensive stocks such as TLS.

 

[Mr J]

You say why I say when.
The why needs a point in time which becomes the when.(Decision time).
Who's on first?

"When" and "why" necessitate each other, but I'm talking about the quality. I think a quality "why" leads to a quality "when", but not vice versa, as without a quality "why", one doesn't know at what point in time "when" becomes quality. However, with a quality "why", the "when" falls into place.

 

[jono1887]

Hey jono,
I started trading seriously in 2005 and made 150% (20k to 50k) over the next 18 months. Was stoked obviously but come end 2007 I made a couple of MAJOR mistakes, ie NOT USING STOP LOSSES!!!!! Rode AED all the way down and lost 10k, then stupidly thought that CIty Pacific was a good buy at $2ish and rode it down, currently my 12k in that trade is worth about $500

So I must add my support to the MUST CUT LOSSES and ride winners crew.

Oh, and I think for the 08/09 year so far I am running somewhere in the negatives (~-20%), mainly because of the CIY and AED trades.

my

man thats got to seriously hurt!! at what % of the buy price should you put stop losses? and do they charge extra for using them?

 

[tech/a]

"When" and "why" necessitate each other, but I'm talking about the quality. I think a quality "why" leads to a quality "when", but not vice versa, as without a quality "why", one doesn't know at what point in time "when" becomes quality. However, with a quality "why", the "when" falls into place.

Quality is subjective.
You dont know how good quality is until a time after when.
Why is a call to action.
When is action.

If action (why) is never taken then you dont have a when.

 

[MS+Tradesim]

It's basic human nature to want to know how you are performing relative to others. But I suggest it's more useful to compare yourself with yourself. Track all your own stats and look for trends. Perhaps you let your losses run too much. Cutting them in half will have a significant effect on your bottom line. Perhaps you cut winners too quickly. Again, adjusting that will improve your results.

You might experience a string of losses (or abnormal profits). There might be a couple of large losses or large profits. Has something in the markets changed? Or are you trading differently? You should be keeping a close eye on these kind of data. How else can you improve your performance as a trader?

As an example, I've been live testing a new system on a new market for the last 6 weeks or so. This week I just upped the position size to what it should be and got 3 losses straight up. It wiped out all of the profits plus more on what I'd built up so far for that strategy. But that doesn't bother me because I know it was just a result of the increased position sizes plus bad luck to get a 3 loss run at that exact point.

Also, a windfall profit is just as much a warning signal as a large loss. Maybe you risked too much on that trade and just got lucky. It might be a sign to scale back risk. If the trade was according to your strategy then great.

For each system I run, I record these statistics:

Wins
Total Winnnings
Ave Win (AW)

Losses
Total Losses
Ave Loss (AL)

W:L = AW/AL
Prob.Win (PW)
Prob.Loss (PL)
Expectancy = (AW*PW)-(AL*PL)

Win Streak
Loss Streak
Net Profit (overall P/L)
Profit Factor = Gross Profits/Gross Losses (how comfortable the system is to trade)
Profit Index = Net Profits/Gross Profits (the efficiency of the system in extracting profit)

I graph the equity curves, weekly returns, yearly returns and plot the R returns (return relative to amount risked - this normalises returns). I look for trends in the data and in behaviour. Based on this, you can also objectively decide what systems to discard or what can be tweaked.

All of this helps focus my attention on what I need to improve and what good habits I need to reinforce.

 

[Trembling Hand]

Good post MS+Tradesim

 

[helicart]

I graph the equity curves, weekly returns, yearly returns and plot the R returns (return relative to amount risked - this normalises returns). I look for trends in the data and in behaviour. Based on this, you can also objectively decide what systems to discard or what can be tweaked.

And you can even run monte carlo simulations on such data to suss your risk of blowing up some time in the future...