Having the nerve to 'ride your winners'

[Mr J]

That's the problem. It has been a choppy market.

I only started trading recently, so I don't have anything to compare it to, but if this is choppy I'd love to see a trending market! Also consider what I said about timescale, what may be choppy one one timescale may be trendy on another.

An example is WPL. Bought in at just under $35.00, sold out at just over $36.00, when i knew it would most likely rally until at least $40.00 (a resistance line). Don't me, i know i did the wrong thing.

That's being results-oriented though. Perhaps the sell at $36 was a good trade, and it just happened to move higher?

You need to find a way of defining and recognising possible major turning points in the longer term.

Or price action :.

 

[Aussiest]

I would hardly call March choppy!
Nor the run down from Dec to March.

Sorry, i was referring to the past 12 months.

Elliot Wave Theory - interesting.

 

[Aussiest]

Perhaps the sell at $36 was a good trade, and it just happened to move higher?

No, it wasn't because i had planned to keep them for longer and to sell at around $38. Just goes to show i am a wuss.

 

[Mr J]

I was assuming you got out because you thought it was the right decision. Ideally, you should only be exiting a trade when the market tells you to exit.

 

[MRC & Co]

Agree with your points Mr J.

Depends on timeframe and market conditions in that timeframe.

Taking half off and letting the other half run can be useful at certain times.

 

[So_Cynical]

I suppose u just have to get used to the fact that there's no nerves
needed with a trailing stop....i too suffer from premature profit taking.

I had my first panic sell today. :shake: i feel a little guilty.

 

[Aussiest]

I had my first panic sell today. :shake: i feel a little guilty.

Sellers remorse :error:, lol

 

[disarray]

i see the "trailing stop" line crop up a fair bit, but the real question is how far do you trail?

6 days is seeing huge swings which can triple your profit or cascade down through a wall of stops (increasing the chance of you getting filled at an even lower price), and waiting this long can cost you a great deal of money in either lost potential or crappy fills.

in a smoother market then longer trails are probably better to capture greater % moves but in this environment i'm thinking stop discipline needs to be flexible.

if theres a strong breakout with big price movement then jam the stop right up the prices backside to take advantage of it because it will almost certainly reverse savagely as the institutional players with their large positions cash in leaving us poor retail slobs with obnoxious price action. if the breakout is slow and steady then you can probably trail at a further distance.

nothing is written in stone and trading is a PVP game - you're not playing the chart, you're playing the traders. the rules keep changing so i think its important to adapt.

 

[Mr J]

I adjust the stop manually, as I'm currently testing different stop placements.

in a smoother market then longer trails are probably better to capture greater % moves but in this environment i'm thinking stop discipline needs to be flexible.

You should be able to use tighter stops in smoother markets. Noiser markets you'd need a larger stop or pass on trading altogether. I say "noise" instead of "volatile" because volatility is good as long as it is tradable.

f theres a strong breakout with big price movement then jam the stop right up the prices backside to take advantage of it because it will almost certainly reverse savagely as the institutional players with their large positions cash in leaving us poor retail slobs with obnoxious price action.

Only for the retail traders that took bad prices. If they took a good price, they would have had plenty of room to get out with a nice profit. Remember, we're faster than these big guys and can do well leeching off of them.

nothing is written in stone and trading is a PVP game - you're not playing the chart, you're playing the traders.

But we're all playing a different game. As a shorterm intra-day trader, I'm looking to take advantage of the smallest of moves and any inefficiency, and have the mobility to be able to get in and out quickly. Institutional traders are far larger and clumsy by comparison, and I feed off of their inefficiency. Every move they make is a potential opportunity for me. They're not my enemy, they're my prey. My enemy is the trader looking to make the same trades as me and trying to take the prices I want to take. Fortunately, there's enough inefficiency to go around .

At least that would be my perspective if I was a profitable trader (still an unknown).

 

[Johno]

A few ideas spring to ming by what your saying Aussiest.

Basically IMO your not planning your trade properly. Part of that planning is planning how you are going to deal with the anxiety of holding out until your profit target is met. Where are you placing these targets? Are they on pre-determined support and resistance levels? Or are they just percentage gains or round numbers youve plucked out of the sky? You dont sound confident in enough in acheiving your targets.

Also this reaks of you "listening to the noise" of the market". Do you hover over the the market every chance you get watching every movement of your stock? If so, set an appropriate stop loss, place your sell order, and switch the computer off and go do something else. Check it on open, and check it on close....thats it. Lose the noise, and especially some share market forums can really sway your direction.

Trailing stop losses are a good idea, but they can fail in choppy markets as can normal stops below your entry point. Im not a big fan of either of them, but I have all day to watch my stocks. Sounds like a trailing stop might take some anxiety out for you.

Also and this is IMO the biggest thing. Markets spend only about 20% actually moving. The rest of the time your stock is consolidating - example - moving backwards or moving sideways before the next large move. Stocks contract and expand in price movement. If your stock moves, your in the 20% timeframe so your best staying with it until its complete. All your doing right now is taking a small profit, and then spending more time waiting for a new stock to finish consolidating and finally move (and thats if it doesnt fail on you). Which brings up another point. Your risking far more of your capital than you need to by constantly entering new trade set-ups. Your failure rate increases a lot when every time you enter an unknown trade.

My advice would be to pick a few stocks that you like and know and just trade the guts out of them to their full potential making sure your in the right sector at the right time. And stick with the trade!!!

 

[CanOz]

But we're all playing a different game. As a shorterm intra-day trader, I'm looking to take advantage of the smallest of moves and any inefficiency, and have the mobility to be able to get in and out quickly. Institutional traders are far larger and clumsy by comparison, and I feed off of their inefficiency. Every move they make is a potential opportunity for me. They're not my enemy, they're my prey. My enemy is the trader looking to make the same trades as me and trying to take the prices I want to take.

Well said mate, very well said.

Looking forward to learning more about your trading style.

CanOz

 

[Johno]

Also if your trading stocks that are too choppy, your in the wrong the stocks IMO. There are HEAPS of stocks out there that are trending up nicely. Use your MA's to indentify stocks that are actually in an extended trend and stick with them.

 

[Johno]

But we're all playing a different game. As a shorterm intra-day trader, I'm looking to take advantage of the smallest of moves and any inefficiency, and have the mobility to be able to get in and out quickly. Institutional traders are far larger and clumsy by comparison, and I feed off of their inefficiency. Every move they make is a potential opportunity for me. They're not my enemy, they're my prey. My enemy is the trader looking to make the same trades as me and trying to take the prices I want to take. Fortunately, there's enough inefficiency to go around .

At least that would be my perspective if I was a profitable trader (still an unknown).

Exactly right. Your goal should be to aggresively take as much money as you can from someone else's pocket because thats exactly what they are trying to do to you.

 

[disarray]

I adjust the stop manually, as I'm currently testing different stop placements.

aren't we all

 

[Mr J]

aren't we all

I'd prefer not to be, as it'd mean I have a stop strategy I'm 100% confident in. Right now I'm keeping track of different stop sizes, letting it run, trailing stops and how much confirmation to wait for. I'm not sure it's as significant as I thought it would be, just as long as the stop isn't too large and we let winners run.

Well said mate, very well said.

Looking forward to learning more about your trading style.

CanOz

It's pretty standard for trading, but it's based off my sportsbetting philosophy. It's simply based on getting a great price, and taking advantage of price movement. This isn't common among sportsbettors, who like many investors try to pick the winner.

My theory on the great price is that sports markets fluctuate around the true value, so taking a price at or near either extreme would be profitable in the longrun. I didn't care about the team, injuries etc, I just focused on getting a great price, or passing if I couldn't.

Now to price movement, there are moves just like in the financial markets. A strong move over a short period in sportsbetting is called "steam", and like in the financials, the sharp money gets in early while the herd gets in later. Like the financials, there's often a reversal as the sharp money buys back, or if they missed the original move, take the other side since it's often value.

Transfer that to financials and trends would be my "steam". I'm less interested in trying to identify reversals at this point.

 

[MRC & Co]

But we're all playing a different game. As a shorterm intra-day trader, I'm looking to take advantage of the smallest of moves and any inefficiency, and have the mobility to be able to get in and out quickly. Institutional traders are far larger and clumsy by comparison, and I feed off of their inefficiency. Every move they make is a potential opportunity for me. They're not my enemy, they're my prey. My enemy is the trader looking to make the same trades as me and trying to take the prices I want to take. Fortunately, there's enough inefficiency to go around .

Interesting, which platform do you use to execute quickly enough to take advantage of any inefficiency spotted and which instrument do you trade?

Cheers

 

[Mr J]

I'm sure there are many ways to define inefficiency when it comes to the financial markets, but my version would be the fact that the market rarely agrees on price, hence the fluctuations, and this is the inefficiency I'm mainly trying to take advantage of. I'm not trying to beat scalpers, black boxes, arbitrageurs etc. Again, this is just my opinion, and it's not built from experience.

 

[MRC & Co]

Ah k, so which platform do you use to execute?

 

[Mr J]

IB.

 

[Bobby]

I

But we're all playing a different game. As a shorterm intra-day trader, I'm looking to take advantage of the smallest of moves and any inefficiency, and have the mobility to be able to get in and out quickly. Institutional traders are far larger and clumsy by comparison, and I feed off of their inefficiency. Every move they make is a potential opportunity for me. They're not my enemy, they're my prey. My enemy is the trader looking to make the same trades as me and trying to take the prices I want to take. Fortunately, there's enough inefficiency to go around .

.

Hello Mr J ,
After reading the above I feel your forte could start with the SPI , do you need funding ?