Evolution of a (Day)Trader

[MRC & Co]

Care to clarify?

We had a huge move down in 'risk' then back up sharply. After a period like this, we were probably going to get 3-5 days of consolidation (which we did). Considering one would now be expecting low volatility, you can sell daily highs and buy daily lows on larger volume than you would be doing when chasing volatility.

But probably need a good read of the market and know when it's going into consolidation mode to do this effectively, maybe not good for the beginner.

 

[ASPwild]

We had a huge move down in 'risk' then back up sharply. After a period like this, we were probably going to get 3-5 days of consolidation (which we did). Considering one would now be expecting low volatility, you can sell daily highs and buy daily lows on larger volume than you would be doing when chasing volatility.

But probably need a good read of the market and know when it's going into consolidation mode to do this effectively, maybe not good for the beginner.

Thanks for the tip! That is a really interesting way to look at the movement of "risk". I have yet to set up a shorting account so this may have to wait. I have been considering a tactic of buying on a panic day selling at a very low price and sell later in the day when the overreaction is corrected, e.g. a stock opens at -6% before slumping within 15 minutes to -8%, I buy at -8% and the stock by mid-day improves to -5 %. If I sell then that is still a gain of 3%, this figure will pay for a lot of bills. (This is a occurred recently)

This I will look out for today.

I am not sure where the general trend is heading, these few days of consolidation may be the beginning of a swing up trend or a major pullback of a downward trend - 50/50 I don't know. The lowest the Dow hit was on February 8th of this year (for the year) - I don't see why the current "feeling" of negativity can't bring the dow below that level.

 

[Julia]

So, ASP Wild, how did you go today? Did you achieve your buy and sell as you outlined above?

 

[ASPwild]

So, ASP Wild, how did you go today? Did you achieve your buy and sell as you outlined above?

Nope. I jumped in 15 minutes after open on the huge falls, thinking they should come up slightly through the day. They fell further during the day. I suspect the opening and evolution of the Asian markets afterward dragged the ASX further down.

I held on to the shares.

On a brighter note, the European stocks were in positive territory and as of now the US has Dow has not fallen further. Nevertheless I am packing ****.

 

[brty]

ASPwild,

I buy at -8% and the stock by mid-day improves to -5 %. If I sell then that is still a gain of 3%, this figure will pay for a lot of bills.

I held on to the shares.

Small limited gain in exchange for large unlimited loss. good plan

Can you see a potential weakness in this plan??

Stop-loss was the most important lesson I have learned so far

Seems to have been forgotten about..

fingers crossed

There is no need, the market will do what it wants to do, your job is to learn to take a chunk of it according to a plan of action that you have worked out is profitable in the longer term whilst being able to stay in the game.

I would suggest that you are still in stage 2 and about to hit stage 3. The absolute worst thing that can happen to you now is for your current strategy to work a few times in a row.

brty

 

[MRC & Co]

But probably need a good read of the market and know when it's going into consolidation mode to do this effectively, maybe not good for the beginner.

ASP, I said the above. May take a few years full-time to gain that good read!

Yours sounds like random punting!

 

[ASPwild]

Is it safe to invest again?

 

[Trembling Hand]

What a woeful list. If thats the path hopeful traders set themselves on I'm glad this game is zero sum.

If you're still on that list after about step 4 my guess is you will be one of the 95% and never get to step 38..................... EVER.

 

[ASPwild]

Well then, just as well I am still simming....as realistically as possible...:

 

[Huitzii]

Hi all I'm new to this sort of investing and just found this thread so I thought I may as well jump in feet first and see what you all have to say.
Im a semi retired gentlemen (still in business but it more or less looks after its self), and I have always wanted to play with the stock market so here I am.
Over the last 4 months I have read at least 6 hours a day ,researched many companies and spent many hours daily trying to foresee trends lol (not so easy)
Anyhow 2 days ago I started paper trading (step 1)
The 3 stocks that I chose (after a lot of research and looking for a viable entry point) were UXA.AX , NOD.AX and CRK.AX
The reasons for choosing these 3 stocks were based on financial statements,debt consolidation ,viable gain (140% reachable profits based on previous history and low entry ,and medium to high risk and volatile).so in saying this stocks that have been at least 200% higher in the past with potential to return to the same...
Dangerous territory you say and I agree.
Over the last 2 days with my experiment I have returned approximately 30% on my outlay of $30,000 ($4,600 profit)so now im soon to experience STEP 2 hahahaha
Cheers huitzii

 

[Huitzii]

Edit for the last post to approximate 15% profit

 

[Julia]

So what's your plan from here on? What will you do if the market turns down, rather than up as has happened in the last two days?

 

[Huitzii]

I plan to hold at the moment ,CRK is going through a tough time right now as is UXA and I believe that both of these stocks will do well medium to long turn.
If NOD turns down anymore than 15% then will be traded as I still dont know what is happening with their short term debt consolidation or even if it will be renewed by their financial institution but in saying this if they have organisedthe debpt issue they will also be held for the time being.
Can anyone give me a little heads up on the CGT before I go and visit my accountant, so I will have some basic knowledge in this area before speaking to him, realize that its payable on any profits within a 12 month period but how is it calculated in stock trading?
Cheers Huitzii

 

[tech/a]

What a woeful list. If thats the path hopeful traders set themselves on I'm glad this game is zero sum.

If you're still on that list after about step 4 my guess is you will be one of the 95% and never get to step 38..................... EVER.

Totally agree.
People here are way way off line when it comes to trading profitably.
38 conditions or parts to a plan are just plain crazy.

No plan is worth jack if you have no idea if it will be long term profitable.

How often do you see "Stick to your plan?"

"Stick to your plan" ONLY if you can prove Positive expectancy.
You can determine Risk to Ruin from your expectancy AND you can increase your frequency of trading.(ADDING MARKETS OR INSTRUMENTS)

If that's all good THEN add Margin and THEN investigate the power of compounding.

You MUST have the numbers---the blue print---without it you are JUST GAMBLING.

So there are 3
(1) Risk to Ruin
(2) Positive expectancy
(3) Frequency

If you know that then you have a plan---whether that has 3 or 103 components to it!

If you dont you have 3 or 103 useless theories/components in making a profitable trading plan.

 

[Wysiwyg]

Totally agree.
People here are way way off line when it comes to trading profitably.
38 conditions or parts to a plan are just plain crazy.
No plan is worth jack if you have no idea if it will be long term profitable.

Wise words again thank you Tech/A but what were you like 15 years ago?

 

[ThingyMajiggy]

Totally agree.
People here are way way off line when it comes to trading profitably.
38 conditions or parts to a plan are just plain crazy.

No plan is worth jack if you have no idea if it will be long term profitable.

How often do you see "Stick to your plan?"

"Stick to your plan" ONLY if you can prove Positive expectancy.
You can determine Risk to Ruin from your expectancy AND you can increase your frequency of trading.(ADDING MARKETS OR INSTRUMENTS)

If that's all good THEN add Margin and THEN investigate the power of compounding.

You MUST have the numbers---the blue print---without it you are JUST GAMBLING.

So there are 3
(1) Risk to Ruin
(2) Positive expectancy
(3) Frequency

If you know that then you have a plan---whether that has 3 or 103 components to it!

If you dont you have 3 or 103 useless theories/components in making a profitable trading plan.

Good points tech, but as far as I can tell, a plan or any mention of a plan wasn't brought up in the original post, and no one has said its a plan, its just what someone perceives to be the "Evolution of a Trader". I guess its what 90% of us go through.

 

[tech/a]

Good points tech, but as far as I can tell, a plan or any mention of a plan wasn't brought up in the original post, and no one has said its a plan, its just what someone perceives to be the "Evolution of a Trader". I guess its what 90% of us go through.

Sam yes your right.

Most are on a circular journey.
Try this then that,read this,subscribe to that.

Thats fine but armed with the above "3" when you do brings the whole circular thing into a line.

W
15 yrs ago I was looking for the above. Ive only seen it in such clarity around 6 yrs ago.
(By Radge). No matter how we think we can side step the "3" it is impossible!!

 

[brty]

The 'evolution of a trader' path is something I was on for many years. I made lots of mistakes, especially in the '80's and early '90's.

The reason for this was a lack of information and real knowledge of what to do. Most of the information available was either books or courses, often trying to sell something and not really about 'trading'.

In modern times there are great resources like this forum where ideas can be bounced around amongst traders/investors. Today there is no excuse to go through something like those 38 steps, you can glean the knowledge of others that have been through the wringer, and some who hit a winning formula straight away.

It seems that every other day I read a topic about someone asking about "the ABC course/school/program" charging $XXXX with the "Is it any good". Granted many are just spammers, but those that are not, clearly are not learning anything from the mentors on this forum.

brty

 

[Huitzii]

@ tech/a, ThingyMajiggy and brty wise words from all of you.
There is one thing that newbies like me have now that we all didn't have 15 years ago was the web there is so much knowledge/discussion and forums like this one for those that wish to put in the hours, the fruit is there, one just needs to sort the good fruit from the bad fruit (also the good fruit that is turning bad)
If a newbie trader like me doesn't have a plan I would guess that he/she is just gambling and may as well just go to the Casino, as tech/a says 3 basics MUST be followed RISK,FREQUENCY and EXPECTANCY if these basic rules are not followed im sure that ruins will follow, also having a buy/sell plan in place is a must and these rules must be followed with a high level of personal disipline which im sure requires nerves of steel, a trader that panics will bring himself undone.
brty how do these spammers convince people to let go of the hard earned cash to learn something that is for free if you just apply yourself and set out to learn as much as possible by putting in the hard yards of research.
Its a given fact that there is no substitution for experience, in saying that a professional in any field is only a professional because he/she has made mistakes and has LEARNED from them...some never learn from their mistakes and will never be a professional at anything.
Personally for me after a lot of deliberation/study I have chosen 8 stocks to watch and papertrade with 3 of those 8, if I can see a potential change I may incorperate 1 or 2 of the unused stocks.
4 out of the chosen 8 are for mid to long term and 4 are for a shorter term of trading.
Well thats me for now
Cheers Huitzii

 

[tech/a]

Personally for me after a lot of deliberation/study I have chosen 8 stocks to watch and papertrade with 3 of those 8, if I can see a potential change I may incorperate 1 or 2 of the unused stocks.
4 out of the chosen 8 are for mid to long term and 4 are for a shorter term of trading.

Sadly rhetoric and deafness abound.
Theory nothing more
Absolutely no idea