Lost $1600 in one day trading OZL

[noident]

Two words will take you out the door of the casino into the world of a trader.........

POSITION SIZING.

The way the market has been of late - it (or at least its major sectors) is moving up and down at once - all stocks. It doesn't make much of a difference how many positions you have - they all seem to move together, some more some less. All we can hear of now is a sea of red/green.
Just an observation.

 

[Trembling Hand]

The way the market has been of late - it (or at least its major sectors) is moving up and down at once - all stocks. It doesn't make much of a difference how many positions you have - they all seem to move together, some more some less. All we can hear of now is a sea of red/green.
Just an observation.

I'm not sure what your point is here. But position sizing is what protects you from blowing out. It will protect you when markets get crazy. It will protect you from blaming the Market for your own silly mistakes IMHO.

 

[bunyip]

Hi,

Despite all the negatives about the $1.65 level portrayed, that could have been a good point to buy, with a stoploss.

Granted that if the stoploss went off, then there was too be a large slippage, 9-10% ,then if the trading plan was enacted it was the correct trade to take.

However if this was the trading plan, then only a small % of the capital base should be employed as the chance of a "high" slippage into stoploss is great.

If there was no overall plan other than to buy something that looks like it is meeting support, then err buyer beware.

brty

PS this almost set off a buy in my short term trade system yesterday, and if the stoploss had gone off, so be it.

And why exactly could $1.65 have been a good place to buy? The stock was in a clear downtrend.
Can you explain why it's a good idea to buy stocks that are in downtrends?
If you buy downtrending stocks they're going to lose you money.
Sure there's an odd exception, but if you want to learn six words that will save you a lot of heartache in the trading game, then you should memorise the following.....Buy a downtrending stock - lose money.

 

[fordxbt]

short a down trending stock - make money

 

[nioka]

short a down trending stock - make money

OZL up 6%+ today. Not a good result for that idea so far.

 

[brty]

Bunyip,

And why exactly could $1.65 have been a good place to buy?

Notice the word could?? It is not would.

At $1.65, OZL was at support from previous bottoms with large volume. If your system/methodology had shown such places to be a potential buy, then you would do it, with a stop.

If you buy downtrending stocks they're going to lose you money.

I agree, most of the time it is a losing strategy.

Sure there's an odd exception

So what is wrong with finding such a time to dip your toes in?? while waiting for the market to prove you correct for your main position?? (ie small close stop losses).

A bloke by the name of Jim Rogers uses such a strategy, so he must not be a very good trader.

You probably missed this bit...

If there was no overall plan other than to buy something that looks like it is meeting support, then err buyer beware.

As $1600 appears to be a large % of the account size, then it is a silly trade, however if it had been less than 1% (which includes the large slippage of a stop), then you could buy at a lot worse places.

brty

 

[bunyip]

Notice the word could?? It is not would.

At $1.65, OZL was at support from previous bottoms with large volume. If your system/methodology had shown such places to be a potential buy, then you would do it, with a stop.

Yes, I saw the support at previous bottoms, and also the volume, but I saw no sign of the down move running out of steam as it approached that support, no candle with a long lower tail that showed rejection of lower prices - nothing. Quite the contrary in fact. What I saw was a big ugly red candle that closed near its low and gave every indication that the stock was headed lower.



I agree, most of the time it is a losing strategy.

Then why in the name of creation would you trade a strategy that stacks the odds so heavily against you that most of the time it loses? Why not use a strategy that stacks the odds in your favour?



So what is wrong with finding such a time to dip your toes in?? while waiting for the market to prove you correct for your main position?? (ie small close stop losses).

What's wrong with it is that, by your own admission, it's a losing strategy most of the time. Far better to trade a strategy that wins more times than it loses, or at least gives you a fair chance of achieving a 50/50 win/loss rate. Yes, I know the winning percentage is far less important than the size of your wins versus the size of your losses. But to trade a strategy that loses most of the time is doing things the hard way.

A bloke by the name of Jim Rogers uses such a strategy, so he must not be a very good trader.

I've never heard of Jim Rogers, but since you've mentioned him I presume he must trade this strategy profitably. I'd suggest that he'd be even more profitable if he traded with the trend, rather than against it.

You probably missed this bit...
As $1600 appears to be a large % of the account size, then it is a silly trade, however if it had been less than 1% (which includes the large slippage of a stop), then you could buy at a lot worse places.

No actually, I didn't miss that bit. And it hasn't changed my opinion that there are far better strategies than trading a method that's a losing strategy most of the time.

But anyway, I can see you've put a fair bit of thought into this strategy and you're comfortable trading it. I wish you well with it.

 

[brty]

Hi Bunyip,

I've never heard of Jim Rogers,

Umm, your a trader??

A google search will help you find out about him. Nothing wrong with a little education.

Who said my strategy was not putting the percentages in my favour?? Enough research and you come up with strategies that don't seem to make sense to most, but have a positive expectation.

You will also notice that I stated it almost set off my buy, it didn't

brty

 

[bunyip]

Hi Bunyip,



Umm, your a trader??

A google search will help you find out about him. Nothing wrong with a little education.

Who said my strategy was not putting the percentages in my favour?? Enough research and you come up with strategies that don't seem to make sense to most, but have a positive expectation.

You will also notice that I stated it almost set off my buy, it didn't

brty

I'm sure you're not suggesting that someone is not a trader unless he's heard of Jim Rogers!

I don't think you're going to convince me of the merits of your style of trading. And I doubt if I'll convince you of the merits of mine. So on this one we might just have to agree to disagree.

But anyway, since I'm always willing to look into different trading ideas, and since you seem to rate this Jim Rogers bloke so highly, I'll check him out on Google and see what I think.

 

[korrupt_1]

The overall trend was down (strongly)... so it was a high risk trade... but given that it did bounce off $1.65, I can see where btry is coming from, it's very tempting to enter the trade as it did bounce off that level 3 times in the past 6 weeks... the following day after the support level was hit, OZL closed higher - 3 times... (hindsight is a wonderful thing)

To play this long setup, one wouldn't risk too much - maybe half what you would normally on this trade - as you're trading against the trend - and intial targets would have been around $1.80... To make this a worth while trade, stop loss would need to be set at no less than $1.50.

Unfortunately, the following day it gapped down and stops would have been taken out... I guess that's the way the cookie crumbles - and the reason why you have stop losses.

I'm with bunyip on this one... if it's trending down,.. look for short setups... more likely to succeed... Although going long off $1.65 had potential of being a winner, it feels like bottom picking... and you know what happens when you pick bottoms... smelly fingers...

 

[brty]

Bunyip,

You don't know what my style of trading is.

Perhaps the following will help you understand who Jim Rogers is..

http://www.bloomberg.com/apps/news?pid=20601087&sid=aFtZT.ckIIV8&refer=home

Rogers Bets Against U.S. Investment Banks, Housing (Update1)

By Saijel Kishan and David Clarke

Oct. 31 (Bloomberg) -- Jim Rogers, co-founder of the Quantum Hedge Fund with billionaire George Soros, boosted his bets against U.S. securities firms because of their salary ``excesses'' and money-losing investments.

Rogers said he increased his year-old short positions in the past six weeks in U.S. investment banks, using exchange-traded funds and bets against individual companies he declined to name. Stocks in the industry, which pays too much in bonuses, may fall as much as 70 percent in a bear market, he said.

``You see 29-year-olds on Wall Street making $10 million to $20 million a year, and they think it's normal,'' Rogers, 65, said in an interview in London today. ``There have been lots of excesses,'' said Rogers, chairman of Beeland Interests Inc.

I find it difficult to understand how someone who has been trading for years, read over 50 investment books, and often quotes different 'supertraders', does not know whom Jim Rogers is.

korrupt_1,

There are many good sayings and beliefs about the market, you just need to test them to see if they are true or not.

I have a rule in my trading that is completely against market axioms. "Take outsized gains". It works for me and it works far better than a trailing stop would in the same situation (from my experience).

brty

 

[jeflin]

Jim Rogers was confident of two approaches - investment in China and commodities.

With both markets' decline, Rogers must have been offloading some "merchandise" over the last few weeks.

 

[fordxbt]

anyone who says they are going long profitably on the asx with little or no leverage (i mean considerable gains; not equivalent to the interest of your dollarmite acount) at the moment is full of it.
dont worry your not the only one, just hang in there

 

[bunyip]

Bunyip,

You don't know what my style of trading is.

Perhaps the following will help you understand who Jim Rogers is..

http://www.bloomberg.com/apps/news?pid=20601087&sid=aFtZT.ckIIV8&refer=home


I find it difficult to understand how someone who has been trading for years, read over 50 investment books, and often quotes different 'supertraders', does not know whom Jim Rogers is.

korrupt_1,

There are many good sayings and beliefs about the market, you just need to test them to see if they are true or not.

I have a rule in my trading that is completely against market axioms. "Take outsized gains". It works for me and it works far better than a trailing stop would in the same situation (from my experience).

brty

'Take outsized gains' eh? And your system suggested that OZL could have been a buy at $1.65 ........ downtrending stock, downtrending sector, downtrending market. Hmmmm, OK - good luck with that strategy!

Seems like Jim Rogers has been making 'outsized gains' by shorting bearish stocks in the bearish financial sector in the bearish US market.

Fifty investment books? I didn't claim to have read even one investment book, let alone fifty. What I said is that I have fifty odd trading books in my library. That's trading books, not investment books. There's a substantial difference between the two. For example, 'Dave Landry On Swing Trading' and 'The Warren Buffet Way' are like chalk and cheese. None of the books I've read made mention of Jim Richards. Then again, none of them made mention of dozens of other gurus who no doubt exist in the financial world, many of whom neither I nor you are likely to have heard of.

 

[brty]

Bunyip,

None of the books I've read made mention of Jim Richards.

Neither have any of the books I've read.

However Jim Rogers is who you state you have never heard of. Perhaps you have heard of George Soros?? or the Quantum Fund??, then again maybe not.

You state one type of trading as if it is the holy grail. If trend following is the only methodology that is so sure fire can't lose, then can you explain why Richard Dennis closed down his second fund with large losses, 15 years after closing down his first fund with a similar performance.

You do know who Richard Dennis is, don't you??

brty

 

[bunyip]

Bunyip,



Neither have any of the books I've read.

However Jim Rogers is who you state you have never heard of. Perhaps you have heard of George Soros?? or the Quantum Fund??, then again maybe not.

You state one type of trading as if it is the holy grail. If trend following is the only methodology that is so sure fire can't lose, then can you explain why Richard Dennis closed down his second fund with large losses, 15 years after closing down his first fund with a similar performance.

You do know who Richard Dennis is, don't you??

brty

Jim Rogers is, of course, who I meant to say. None of my books mentioned him. Nevertheless, he's clearly an investor of repute and considerable ability, and his shorting exploits in those bearish US financial stocks would have made him a lot of money recently.

Indeed I have heard of George Soros and the Quantum Fund.
As for Richard Dennis - I remember reading somewhere that he's reputed to have made 200 million dollars with the trend following system he and Bill Eckhardt taught to a group of traders dubbed 'The Turtles'. But apart from that, I can't speak for him.....I suggest you direct your query to the man himself, or someone who's qualified to speak for him.

There are hundreds of gurus in the financial world, some of whom are known to me, others who are known to you. Neither I nor you nor anyone else can know of every one of them. That doesn't prove or disprove we are traders, nor does it prove or disprove how knowledgeable we are. Nor does it say anything about our trading abilities.
I'm not interested in who has heard of which guru. A discussion of gurus is off topic in this thread.....if it's gurus you want to discuss then you can always start another thread to that effect.
This thread was instigated by a newcomer who copped a mauling by trading against the trend of OZL. I don't have any holy grail to offer him. I don't believe in holy grails, but I do believe in trading a system that gives you an edge in every trade. My advice to Master82 is to stack the odds in his favour by trading with the trend, not against it. Doesn't work every time. But it works more often than not, and puts you into trades that sometimes turn out to be huge winners that reap hundreds of percent profit.
If you or anyone else wants to disagree with me on that, no problem.

 

[nunthewiser]

Paddle your own canoe ..... float your own boat...........tread your own path

all these highly paid mouthpieces and market opinions only as good as there next guess and will change that the moment they look like there wrong.

luv nunthewiser

 

[zetor]

I AM NOT NEW AT ALL THIS STAFF,OF BUYING AND SELLING SHARES. I AM A INVESTOR
HAVE BEEN OVER THE LAST 15 YEARS,SO I AM LONG TERM BLUE CHIP STOCKS AND A FEW SECOND STOCKS HOLDER OVER THE YEARS,BUT THE AMOUNT OF MONEY THAT I COULD HAVE MADE OVER THE YEARS BY SELLING STOCK THAT I PERSONALALLY THOUGHT THAT HAD A GOOD RUN,AND THAT I HAVE HELD TO FIND THAT MY PROFIT HAS HALFED OR MORE.EXAMLPES ARE :
OPTUS SHARES FREE BY MAYNE NICK WHENT TO $7.00+ DOLLARS
SOLD AT ABOUT $5.30,STILL A GREAT PROFIT, $7.00 DOLLARS WOULD HAVE BEEN BETTER.
TLS BOUGHT FIRST FLOAT WHENT $ 7.00+ DOLLARS
SOLD AT $5.00 ,STILL NICE PROFIT,$ 7.00 WOULD HAVE BEEN BETTER
NAB BOUGHT 12.30,WHENT TO $46.00 DOLLARS
SOLD AT 25.50 STILL A NICE PFROIT,BUT &46.00 WOULD HAVE BEEN BETTER
AND SO THE LIST GOES ON.
SO WHAT IAM I SAYING IS DON'T LISTERN TO YOUR BROKERS AND ALL OTHER PEOPLE THAT SAY HANG ON TO THE STOCK ITS GOING TO GO A LOT HIGHER YET.
THIS MAKES ME WOUNDER IF SOME OF THE BROKERS WHO SAY THIS AND OTHER PEOPLE IN THE SO CALL KNOW ,HAVE ACTUALLY GONE LONG IN THE STOCK,AND WHEN THEY DOWN GRADE A STOCK,THEY HAVE GONE SHORT ON THE STOCK.
I HAVE ALLWAYS BEEN WORRIED ABOUT THE CAPITAL GAINS TAX THAT I WOULD HAVE TO PAY.SO AFTER 15 YEARS INVESTING FROM NOW ON IAM NOT GOING TO WORRY ABOUT CAPITAL GAINS TAX.IF I THINK A STOCK HAS HAD A GOOD RUN,I FROM NOW ON WILL TAKE APART PROFIT OR A FULL PROFIT, AND IAM NOT LISTERNING TO ANYONE ELSE.SO THERE.
AS A SMALL INVESTOR, YOU ARE BEING CONED IN A BIG WAY BY ALL THESE SHARK'S OUT THERE.

 

[rub92me]

zetor, welcome to the forum, but FFS hit the 'Caps Lock' key before you post next. Thanks.

 

[zetor]

sorry,to many xxxx's,must go to bed.