Discretionary Trading Method-----Outliers Discussion Thread

Porper · 28 October 2006

MichaelD said:
Please tell us more. I have not thoroughly researched the use of CFDs with a GSLO yet, and my question would be;

What is the outcome if you compare a sequence of 30-50 trades in volatile stocks using a positive expectancy system WITH a GSLO versus WITHOUT.

I have a niggling suspicion that despite the black swan and slippage protection, the overall bites at your account of the GSLO costs will outweigh the benefits - after all, why would a CFD provider give US something? Despite this cynical belief, however, I would be happy to be proved wrong.

Ok, I can only speak with any knowledge on IG Markets.

They provide a GSL on most stocks ( ASX top 300) for around 0.3% of the value of the transaction.

The closest you can put a stop is within 5% of entry.

As for the question of expectancy, I don't have the software to back test (I suppose you could manually go through 70 stocks individually and compare) so I can only gauge expectancy on a win/loss ratio, win percentage basis, obviously no good for testing this.

As you say probably wouldn't give a higher expectancy than trading a normal account apart from saving you in a crash type scenario.

As you know all CFD providers are here to help us, so maybe this is why they offer GSL'S.

Kauri · 28 October 2006

For the trader with a small capital base I guess the GSLO could be looked at in a similar light to insuring your house against fire, what percentage of people actually have their house burn down???.. but if it does and you are not insured... likewise if the under capped trader is loaded up in one position with no GSLO and "the black swan " touches down... The CFD provider, like the insurance Co. no doubt has the numbers weighed in their favour, but I personally don't mind paying the .3-.7 or 1% premium for the peace of mind. It, along with commission, is factored into my trading setup.
Also, a little dangerous maybe, but with a GSLO set at the minimum of 5% the under capped trader can either take a larger position or take more positions as the margin is reduced to the GSLO amount of 5%.. from the typical 10-15% required on the average GSLO stock.

tech/a · 11 November 2006

Discussion here thanks.

Freeballinginawetsuit · 13 November 2006

Hmmm, I probably accumalated yours T/A. I also had my stop at 19c, am I right off the mark as I seem to be totally different to your strategy on this one.

tech/a · 13 November 2006

Free

Just a matter of approaching this trade a little differently.
I maybe trading larger parcels have a lower tolerence to risk.
I may also be wrong in my methodology on this trade.

I'll do a commentry later when more time.

nizar · 14 November 2006

tech are you out at AIM yet?
or holding until 2mrw?
(i noticed you picked up some more at 24c)

tech/a · 14 November 2006

No Still in there no reson to sell yet.

Ill update my thoughts from a technical veiw tonight.

nizar · 14 November 2006

tech/a said:
No Still in there no reson to sell yet.

Ill update my thoughts from a technical veiw tonight.

Ok i look forward to tonight.
i would especially like to know if your stop is now trailing. i expect it would be.

moses · 14 November 2006

tech/a said:
No Still in there no reson to sell yet.

Ill update my thoughts from a technical veiw tonight.

Terrific. And I owe thanks to you having bought and sold AIM today on the strength of your charts and remarks. I sold to lock in because I was concerned about a speeding ticket, but will buy in again if it makes sense. Thanks again.

Freeballinginawetsuit · 14 November 2006

tech/a said:
No Still in there no reson to sell yet.

Ill update my thoughts from a technical veiw tonight.

Really?, and what was yesterday's reason to sell T/A, still waiting for that one.

tech/a · 14 November 2006

Freeballinginawetsuit said:
Really?, and what was yesterday's reason to sell T/A, still waiting for that one.

I posted the full reason last night here
https://www.aussiestockforums.com/forums/showthread.php?t=4650&page=3
Post 57 or 58 I think.

I sold 50% as mitigation of risk.
Read the post and you'll see why.

I have discussed the change in sentiment shown on the shorter timeframe charts and the reason why I bought back in. Actually I bought a little more than the 50% I off loaded.

For those following Ill post up the charts when I get my EOD download.

They will be EOD,15 min and tick.

No need to get snakey you'll have plenty of time to laugh your head off when I get it wrong.

I only started posting how I trade short term as some seemed interested.
My apologies if my style irritates you. I have no interest in fundamentals and dont look for a fundamental reason for price action.

I simply trade it.

Freeballinginawetsuit · 14 November 2006

Not being Snakey T/A, just couldn't see a reason why you would sell at 21.5c, that seemed the resistance buy price.

Really appreciate that you followed AIM, SMY and CSM with your discretionary trading thread, it correlated nicely with the posts of the said stocks on the threads.
Its a bonus for any holder to follow your info on a stock their holding.

tech/a · 14 November 2006

Firstly the tick chart.

As can be seen solid buying started at just after 2 pm.
You can also see some daytraders un loading just before close.(Last 2 read bars). Most recient buyers are in around 21-23c with a heap at 23 upto 28c.

This current build up isnt showing any signs of off loading yet.

The second chart the 15 min chart

Shows clearly the strength of the current breakout with no sign of weakness.

The last chart is the EOD chart

From experience selling pressure arrives when a stock moves 50% plus in a few days.This has moved just on 50% since the breakout at 20c high.

Im expecting around 32.0c before selling pressure.(20c x 1.618)
If it looks like gaping to there then Ill set my sell order at open.

If it doesnt gap to there then I will be watching any trading below the opening price for weakness then a sell.

If it trades to or through 32.0 then I will be watching volume on the short term charts along with consolidation and accumulation areas.

If there is a large fall on the SPI tonight then there could be an inside day.
High chance this will spike open then sell off.
Id expect this to pull back to 24.5-26c area as can be seen on 15 min and tick chart.

My opinion only not trading advice.

ezyTrader · 15 November 2006

Oops, the chart didn't upload earlier ... 15-min chart.

nizar · 15 November 2006

AUZ looks a goer.
2 down days on friday and monday on low volumes.
Tuesday up on significantly larger volume.
Today up of double tuesdays volumes.
Market depth building.
2morw will be interesting.

ezyTrader · 15 November 2006

Sorry, something went funny earlier. Meant to post the following before the chart.

Hello tech/a,

I'm interested in your analysis of the AUZ trade as it stands. The buying seemed to have dried up a bit in the latter half session, or rather a selling/profit taking session taking place. But to have 54M shares turnover today is still significant, I agree with Nizar there's more upside tomorrow.

tech/a · 16 November 2006

Ill post it up soon when in the office---where the live charting package is.

tech/a · 16 November 2006

The first cahrt below shows the initial interest I have.
This was on a watchlist and the gap open triggered an alert. I and im sure a few others see this as a possible start to the 3rd leg of a larger move.

These sort of entries often take some time to get underway due to selling pressure.Those who dont have the confidence to hold from the last move are the ones we are buying---plus a few day traders--scalping---you see them normally in down volume on minute charts near to close.

The second chart which is an hourly chart of yesterday shows the battle.
Buyers did win the day but not convincingly. This is a good sign however as high volume means that those who do want to sell will be taken up quicker.
Light volume means the process will be protracted.
Often high volume and little movement gives rise to explosive moves as new buyers take out old and build a solid base.
On the plus side the longer and more protracted the base generally the more explosive the breakout move when sellers dry up and buyers scramble to get in.
Massive volume and quick rises tend to be very short lived.
Today will show much.

nizar · 16 November 2006

tech/a said:
The first cahrt below shows the initial interest I have.
This was on a watchlist and the gap open triggered an alert. I and im sure a few others see this as a possible start to the 3rd leg of a larger move.

These sort of entries often take some time to get underway due to selling pressure.Those who dont have the confidence to hold from the last move are the ones we are buying---plus a few day traders--scalping---you see them normally in down volume on minute charts near to close.

The second chart which is an hourly chart of yesterday shows the battle.
Buyers did win the day but not convincingly. This is a good sign however as high volume means that those who do want to sell will be taken up quicker.
Light volume means the process will be protracted.
Often high volume and little movement gives rise to explosive moves as new buyers take out old and build a solid base.
On the plus side the longer and more protracted the base generally the more explosive the breakout move when sellers dry up and buyers scramble to get in.
Massive volume and quick rises tend to be very short lived.
Today will show much.

tech,
Wat do you make of the action so far?
I reckon it has to close above 8.5 today, or else it will trade sideways for a bit before the up leg. If we have a bit of volume (arvo run) and a close nearer to 9cents, then tomorrow could be special.
Alot of selling happening at the moment.

tech/a · 16 November 2006

The whole markets being hit.

If it fell to my buy then I would get out and let it settle.
In the meantime those that took big positions and Ive seen a few of them originally taken and now sold off. Id do the same near my buy price.

No decisions on the stock till then. If at all.

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