Did you suffer before doing well or vice versa?

[cuttlefish]

Blaster - in your trading strategy, what technique do you use to determine your exit point from a position?

 

[blaster]

Peter2 - good post - easily implemented starting point for putting structure around each trade, and also an immediate guide to the beginner as to how emotion gets involved in the equation, and also provides a log to go back over and review.

What do you think blaster? - do you do this already and if not will you give it a go? Even if you take a break from the markets you could at least paper trade Pete's approach for a bit.

I suspect that what youve been doing so far is not trading or investing, but gambling, using the market as your roulette wheel. If only going long this is obviously more succesful in a strong bull market and less succesful in a flat or falling market. If you like gambling and only gamble what you can afford to lose there's nothing wrong with it - though its good to understand that this is the reality of what you are doing. On the other hand, if you want to become a trader or investor then there's plenty of good advice on this thread to get you further on the way.

Yeah it was Pete thanks for that
No mate if I wanna gamble the last place on this planet I'd choose is the stock market.
All of the above is in every trade - ofcause - doesn't everyone , well unless they just wanna play but how could you possibly seriously expect to trade and last otherwise ?
But I have slipped back in caution and my D&D and strayed from what I do best and my exact format - this has definitely not been good .
L've also broken some golden rules with a few panic sells which costed me , then the damn advisers . I just seem to be running out of wack though as wifey puts it suddenly and carelessly too . Which I've read over and over of late is an absolute big no no in these times right now .
But one thing I really hear at the moment none stop - everywhere is patience ,patience and patience , which has also left me fo the moment and costed me .
Just a note here to mrc too.
I use a what is usually a very solid basically just a wave stratergy going on charting , buyers , habits and other goodies . I work these days on 5-10% but previously much higher .
Quick stuff usually a day to a wk - a wks a long trade to me .
Normally no stop losses but recently started using them , which ended in selling great stuff at a loss while I was away .
I also began a portfolio of keepers on the side but sold the lot as it gave me the sh'ts and I can use that money better .
Mind you suddenly I couldn't call a one horse race but above has played a big part in that I see now - gotta get a grip.

Cheers

 

[CFD]

~~
I use a what is usually a very solid basically just a wave stratergy going on charting , buyers , habits and other goodies . I work these days on 5-10% but previously much higher .
Quick stuff usually a day to a wk - a wks a long trade to me .
Cheers

Seems you may just need to recognise the conditions under which your method works. If you do not have the right condition, wait it out.

 

[blaster]

Blaster - in your trading strategy, what technique do you use to determine your exit point from a position?

Hi again cuttlefish.
Everything availble before I touch it in the first place but you know the most common is it's recent habbits by again using everything available . Another biggy right now - no one has recent habbits any more.

I also recently stated commiting to out if she drops 2% but this has costed me so I'm going back to my original I think ajnd trusting my judgement which only costed me rarely .
For me I find the whole stop loss thing a catch 22 and especially right now because they can do anything no matter what and how anything reads .
But also if you buy at the wrong time it easily drops before it rises
maybe 2 or 3 times even but if you've called right you check it in a few days or a week and here it is exactly where you said it would be eventually.
Like this week - I'm buying rio for 116 thursday it will be ready . Tuesday Wed it went up so I almost paid 122 but something else came up and I bought that . Here is RIO Thusday at 115 . I normally would have waited.
But anyway hey , can you even trust rio right now - what do you think ?
Cheers

 

[tech/a]

Everything availble

Read nothing specific.

I also recently stated commiting to out if she drops 2%

Why? Thats NOT a 2% stop loss by the way.

For me I find the whole stop loss thing a catch 22

Clearly you do not know why a stop loss is placed how to place it and its affect on position sizing.

what do you think

It doesnt matter what anyone thinks.
You need to learn how to trade---your not trading,your guessing,and reacting,you are not in control of ANYTHING.

Maybe not what you want to hear but what you NEED to hear

 

[mayk]

Can someone point out some strategies (FA or TA ?) I mean do people name strategies?

To me,

FA, is simple you understand a business, work out company potential and work out the numbers. Plus you can set some stop losses to preserve your capital.


TA: A whole bunch of abstract concepts, enter here ( say a potential breakout..) exit there , put a trailing stop etc. etc. If someone can giveme some names of the strategies, I will greatly appreciate.


Sorry for going off topic.

 

[cuttlefish]

Hi again cuttlefish.
Everything availble before I touch it in the first place but you know the most common is it's recent habbits by again using everything available . Another biggy right now - no one has recent habbits any more.

I also recently stated commiting to out if she drops 2% but this has costed me so I'm going back to my original I think ajnd trusting my judgement which only costed me rarely .
For me I find the whole stop loss thing a catch 22 and especially right now because they can do anything no matter what and how anything reads .
But also if you buy at the wrong time it easily drops before it rises
maybe 2 or 3 times even but if you've called right you check it in a few days or a week and here it is exactly where you said it would be eventually.
Like this week - I'm buying rio for 116 thursday it will be ready . Tuesday Wed it went up so I almost paid 122 but something else came up and I bought that . Here is RIO Thusday at 115 . I normally would have waited.
But anyway hey , can you even trust rio right now - what do you think ?
Cheers

blaster what you're describing as your trading strategy makes me form the view that what you are doing at the moment is basically gambling - which is fine - but accept that thats what it is. All gamblers that don't wreck their lives with it still need discipline and money management and to put bounds around their activities.

It is more likely when trading discretionarily based on no set criteria that you will have more emotional involvement in your trades - and typically your emotions give you the wrong signals - greed causing an entry at prices that are too high, or fear preventing you exiting when you should (at a planned stop or money management stop) and then instead exiting when you shouldn't (when there is capitulation and all seems lost).

By abandoning stops when things aren't going your way you are effectively abandoning the only trading plan you seemed to have. I would recommend taking some time out and paper trading according to the disciplines Peter2 has described whilst also reading some books on trading, investing and money management principles.

 

[MRC & Co]

Do you really believe that?

Well perhaps not the practically unheard of part, but I know very few who have made over 50% p.a over 10+ years. Ive seen and heard of people doing it in bull-markets over a few years many many times, but not often deep into bear markets.....

If you could consistently gain 50% returns on average no matter what the market, why not start your own hedge fund and end up with billions of dollars in fees!

 

[tasmanian]

Ill try and give you a very simple example somewhere to start so to speak.

Ok seeing the overall market is in a downtrend we will look for downtrending stocks as that seems like more probalbility of success than going long on a stock.

so we have found a nice downtrending stock which code is xyz.When it makes a new low we are going to short sell it.Say the new low is $10.00 so we are going to sell short xyz at $10.00.

We look at the chart and the best place we can find to set a stop is a rally high in the downtrend which was $10.80 so we are going to set our stop at $10.81.

We dont want to loose any more than $400 on this trade so that means we will buy 500 shares.500 shares with a loss of 81c so a $405 loss.Close enough for this example.You can be stricter if you add in brokerage,slippage etc up too you.

Profit targets can be made or a trailing stop can be used as the stock drops.Either using a % or as new lower highs are made or whatever way you find to be the most profitable.

So after lots of practice testing going crazy etc you will hopefullly find a system that works for you.

well somewhere to start I suppose

good luck never ending though noone ever masters the markets completely

 

[blaster]

Read nothing specific.



Why? Thats NOT a 2% stop loss by the way.



Clearly you do not know why a stop loss is placed how to place it and its affect on position sizing.



It doesnt matter what anyone thinks.
You need to learn how to trade---your not trading,your guessing,and reacting,you are not in control of ANYTHING.

Maybe not what you want to hear but what you NEED to hear

Guessing - my God and after everything I've explained , this is a waste of everybody's time I'm afraid and a mistake i'm sorry . I appreciate the genuine replies but !
Everything available I would have thought summed up that one quite well without boring everyone to tears . What is everything available - charting history - habits , company info- announcements on and on but why would I bother throwing all that in .
Allot of people jump on you in forums , read and interpret anything and everything only in the way that they would really like to perceive it so as to have the op' to again pounce, pick and generally bignote themselves .
I don't know why it is but most forums seem to have a handful of genuine people balanced by the many that just live for picking the crap out of a ducks you know what and twisting every note along the way - maybe they don't heve a life I really don't know .

Happy easter

 

[blaster]

Thanks to all the genuine replies I know allot and myself appreciate it but I think we may as well finish up .
Might go mingle

Cheers.

 

[prawn_86]

Blaster,

None of your answers have been specific to any of the questions asked. Hence why you are not getting specific remedies.

Are you a discretionary or technical trader?

What is your main entry criteria?

What is your exit criteria?

Do you have defined RR on each trade?

What sort of stocks do you watch? ie - sector, top 20 etc


Saying things like "everything" does seem to imply that you dont have a plan in place and are just hoping.

As other have said, in a bull market it is easier to be correct more often then wrong, when going long. Thins change in this sort of volatility.

Now instead of complaining that you are not hearing what you want to hear, how about you actually answer all the questions SPECIFICALLY rather than generally and people may be able to help you further...

 

[metric]

What so out of all this - all your worried about are pretty paragraghs, you must be doing well then that's forsure. Buy a painting !
Have a good one

As you do more research, you may form more respect for paragraphs, order, effort, and good advice.

 

[tech/a]

Guessing - my God and after everything I've explained , this is a waste of everybody's time I'm afraid and a mistake i'm sorry . I appreciate the genuine replies but !
Everything available I would have thought summed up that one quite well without boring everyone to tears . What is everything available - charting history - habits , company info- announcements on and on but why would I bother throwing all that in .
Allot of people jump on you in forums , read and interpret anything and everything only in the way that they would really like to perceive it so as to have the op' to again pounce, pick and generally bignote themselves .
I don't know why it is but most forums seem to have a handful of genuine people balanced by the many that just live for picking the crap out of a ducks you know what and twisting every note along the way - maybe they don't heve a life I really don't know .

Happy easter

Advice is what we ask for when we already know the answer but wish we didn't.

Enjoy your trading---whats left of it.

 

[Timmy]

A plans not worth the paper its written upon unless you KNOW WHY its profitable.

You have said this before tech and, for me at least, it is of utmost importance ... cheers.

 

[IFocus]

Guessing - my God and after everything I've explained , this is a waste of everybody's time I'm afraid and a mistake i'm sorry . I appreciate the genuine replies but !
Everything available I would have thought summed up that one quite well without boring everyone to tears . What is everything available - charting history - habits , company info- announcements on and on but why would I bother throwing all that in .
Allot of people jump on you in forums , read and interpret anything and everything only in the way that they would really like to perceive it so as to have the op' to again pounce, pick and generally bignote themselves .
I don't know why it is but most forums seem to have a handful of genuine people balanced by the many that just live for picking the crap out of a ducks you know what and twisting every note along the way - maybe they don't heve a life I really don't know .

Happy easter

Blaster not so in this case, you are getting some very good replies based on market reality not warm loving and fuzzy but market reality.
There are a number of posters on this site that are very abrupt but their message is among the best.
You could go to a seminar and hear the same thing but put in a way that makes you feel good while they massage the money from your pocket.

Here you get it for free from people who trade and have done for some time.

Forget about or deal with your buttons being pushed, this is the market talking to you with out you losing a cent its a hell of a good deal.

Engage in the message not your emotions no different to when you front up to place a trade.

As suggested give more detail as to your method or point out you lack method and ask for help and you will get it.

 

[MRC & Co]

Good post IFocus!

Its true Blaster, "everything" doesnt constitute a trading strategy.

Company announcements, historical charts, company info etc.

Specifics are required.

For example, company info or (FA): Do you look at sound management performance, low debt, good cash flows, high ROE with good growth forecasts, low risk and decent book value? Any specific intrinsic value equation you use? Historical growth of EPS and historically high ROE? Do you look for yeild and into the payout ratio? And this effect on capital growth? How about share buybacks?

TA, do you use EW, VSA? Do you buy after a strong trend, i.e. wait until the price has moved above the first upward pivot or just wait until a break out of trading range to try and gain the most out of the trend? Do you apply certain support/resistance levels, a trailing stop or a price target? Or do you wait until the trend looses momentum and then sell up? Do you use sentiment polls or look at monthly seasonality? Any other technical indicators you use, crossovers (Oscillators, MACD) etc? Oversold (RSI?). Do you look for a shift to close a gap? Or what about V-bottom reversals?

Is it simply stocks you buy? Any particular way you look at sector divergence? For example if NASDAQ outperforms the DOW over several days and you move your investments into technology stocks?

Do you look at industry fundamentals or economic outlooks? What about exchange rate effects?

So many different methods you can use to formulate your strategy.

"Everything" or historical charts, company announcements doesnt suffice.

You obviously need more research.

Cheers

 

[peter2]

Blaster doesn't need to post all his trading details. He has mentioned his main concern which is a disappointing trading performance. His results can only be due to the trading system or his handling of the system. Of course it may be due to both. Current market conditions may not be right for his system and he may be making poor trading decisions due to stress.

That is why I suggested he review his own performance in an objective way. If he is satified with his own trading performance (and I doubt that he will) then he needs to evaluate his system performance in the current conditions. Tech/a's point is very valid, it is very probable that his trading system is not suited in this highly volatile market. All systems go through periods of drawdown and if your system has been thoroughly researched you would know if this current drawdown is within expected parameters or not.

IMO it is generally the trader who saboutages his system rather that the system not being suited to the market. A disciplined trader will notice if the market conditions are not suited to his system fairly quickly. An undisciplined trader won't know what is going on, but will blame the market.

 

[sidswingerhead]

Hi to all. This is my first post on this site so feel free to tear it appart and question my comments.

I honestly think that the biggest problem people face when trading or investing in the markets is not having "or" following their own rules.

Human nature or mental bias on a stock is one of the biggest problems. Such as you can physically see that the trend has broken, and a lower low has begun. "Yet" The view that the stock has been outperforming and will therefore continue its uptrend soon clouds your better judgment.

When I started out, I "thought" I had put together a trading plan "yet" continually neglected to act on it when circumstances changed. I would ride the "bull" to the top, only to slip off the other side because my mental bias on the stock would not allow me to pull the trigger. Before I knew it I had gone from becoming risk averse, to risk seeking by averaging down trying to minimise my losses. "Pasminco" was my first crack at the market and I averaged it down until the the company failed and I did my money cold.

The old adage "Plan the trade and trade the plan" can not be more accurate.

Regardless of what system, analysis or indicators you use (fundamental or technical), if your plan does not have a hard and fast exit strategy then your mental bias will take over again and you "will" fail.

You need to determine your:
1) % risk.
2) Exit strategy (before the entry is even made) ie: Stop loss (5%) or where to place the stop. I have found that the best place to set my initial stop is just under the preceding low on the chart, so if the low is taken out then the trigger is pulled as the downtrend is still in vogue.
3) I set an automatic stop, so my mental bias cannot supersede my plan.
4) Plant your entry and don't just guess it.
5) Don't bottom feed, wait until the uptrend is proven before making your entry. Again, people's mental bias of thinking that getting in at the bottom is maximising profits, only to see the stock fall lower shortly after entry. Why do people continually look for a falling stock for an entry, yet a rising stock is obvious.
6) Run a trailing stop or have a trigger that tells you when to exit.
7) If the trend changes on a stock, go find another one until the next reversal. Don't have a favorite and don't become emotionally attached to a stock. (There is no room for emotion in this game).
8) Ensure that you monitor the sector and or bellwether stocks of that sector to determine the bullish/bearish sentiment of that sector.
9) Don't try to be bullish in a bearish market, even if it means stopping trading until sentiment changes.
10) If you have to look hard at a trend to make a decision then don't bother, because the answer is not there. A simple trick to test your mental bias on a stock is to invert the chart. Look at it upside down and then ask yourself what you see?

The list goes on. You need to run a diary not only of your profits but more so your losses and why you made them. Once you have made your decision, do not second guess yourself as in most cases your initial decision was the correct one. Make notes on your mental wellbeing and what made you come to any one decision or conclusion.






Most of all......................."Abide by your rules" it's that simple!

 

[tech/a]

Most of all......................."Abide by your rules" it's that simple!

I really have to keep disagreeing vehemently with this often coined "true-ism".

While Sid has every best intention.

Having a plan no matter how complex (Or simple) you make it DOESNT GUARANTEE that it will turn you into a profitable trader.
How many follow a plan to the letter and still blow up.

They blow up because they have no idea BEFORE they trade their plan whether it has a chance in hell of being profitable.
No amount of Money management/stops/Entry and exit strategies will rescue a plan which is flawed in design.

First thing is to Design a PROFITABLE plan.

Test it and from that you'll get a blueprint which you can refer to during trading.
You'll be able to monitor historical draw down to see if your within know tolerances.String of losses,R/R,average win/loss,youll be able to see whether your over or under performing your blueprint.
You'll be able to compare performance in like conditions.

A high percentage of Businesses fail as the owners fail to test their market and see what they have as a business plan will have a chance of being profitable. Trading is a business.