Hi all, Thanks for comments, so helpful for a beginner (actually not even started) guy like me
Re: 2% ... this sounds ok to me coz that means you virtually have 50 positions, poz size 1.5K, $20 entry $20 exit, so 2.5% roughly goes to fees, so stock must go up by more than that atleast(this is very rough, I know 2% amount will decrease or increase )
Re: paper trading for 2 months
I'm developing a plan now, it involves using advice from professionals and not use chart analysis. "duplicate then innovate":
and instead of paper trading for 2 months from now... I will simulate trading for 2 months from 2 moths ago till now using archived reports/advice documents.
The reports come from "wise-owl", my judgement so far is that they are good at what they do, and that is all I need... "guidance by professionals" so that I can minimise mistakes made by me as a beginner until making some profits.
2nd stage... Use portion of profits with increased risk vs increased return trades.
Final goal is to be a daily options trader... I've realised this is harder than it looks. The swings are pretty high... too much for me right now
Mistakes
... mistakes were mentioned, I would like to see a forum thread that lists traders real life mistakes, and how they could have avoided or minimized them with sound planning.
Hi all, Thanks for comments, so helpful for a beginner (actually not even started) guy like me
Re: 2% ... this sounds ok to me coz that means you virtually have 50 positions, poz size 1.5K, $20 entry $20 exit, so 2.5% roughly goes to fees, so stock must go up by more than that atleast(this is very rough, I know 2% amount will decrease or increase )
Mistakes
... mistakes were mentioned, I would like to see a forum thread that lists traders real life mistakes, and how they could have avoided or minimized them with sound planning.
So from your thesis I take it you will make your own decisions when you are in profit and won't require the help of professionals?
Blindly following experts without evolving can only lead to one thing when ne goes out on their own. Following professionals with understanding may be different.
I think you've misunderstood this a bit. The 2% everyone is refering to is max risk not position size. So for $75k, 2% risk per trade would be $1500, what some posters are saying is that this is to big and should be more like 1% or $750.00
I'm pretty sure there is a thread on the mistakes everyones made,
Thanks for clearing that up, that makes more sense now... but don't agree with it heheh. (i can see "mistake" signs in my head ... potentially me making a mistake here)
I like to look at charts and set stop levels depending on the trend, volatility, and share price. Cheaper stocks may have more swings than more expensive ones.
What if I invest 1.5K of my 75K ... should I set the stop loss at 0.00 as that would be a 2% loss?
Thanks for clearing that up, that makes more sense now... but don't agree with it heheh. (i can see "mistake" signs in my head ... potentially me making a mistake here)
I like to look at charts and set stop levels depending on the trend, volatility, and share price. Cheaper stocks may have more swings than more expensive ones.
What if I invest 1.5K of my 75K ... should I set the stop loss at 0.00 as that would be a 2% loss?
What if I invest 1.5K of my 75K ... should I set the stop loss at 0.00 as that would be a 2% loss?
Ok, so heres my plan.
-Capital: 75,000 AUD (i would normally trade CFD's with approx. $30k)
What parcel size will you be trading?
Fixed?
Maximum?
-Universe: Will be my IG Market list that Lesm kindly gave me for the mech system testing. It can go both long and short (most of the time)
-I will attempt to take long and short positions in stocks that present low risk entries using typical chart pattern analysis, incorporating some VSA, and some really primitive EW.
OK
-I will only risk 2% of starting capital on any trade, using strong support/resistance and fixed fractional positioning to determine quantity purchased.
Fine again
But as you say your going to be leveraged
so you only have $600 to risk/trade.
This will then determine position size\ie wether you have to deminish the size of the parcel due to being able to purchase more than to have allocated /parcel size.
Lets say you have a $1 stock.
Risk is 3c
$600/.03 = $20000 worth you could buy.
If your Maximum single position size is $10,000 then you can only buy that amount of stock and your actual risk on THIS trade will only be 1%.
Simple really!
-I will move stops to B.Even ASAP.
I would only move to B/E when you have atleast a 2:1 R/R OR there is a technical higher low you can move the stop to.
-I will use a trailing stop (higher low)
Fine
-I will use a profit stop (50% increase in less than 2 bars) to be honest i have not really thought about this allot yet, i am interested in suggestions here.
This is a outlier move profit stop--thats fine as well just add it to your exit criteria as an OR option.
I presume the trailing stop OR the outlier move will take you out of a trade.
-Anything i'm missing here?
Probably.
Cheers,
Hi chrisdedavid,
Have a look at this post by Nizar, should clear things up for you
https://www.aussiestockforums.com/forums/showpost.php?p=161774&postcount=6
Hi Can
Didn’t see any mention of the time frame you had in mind. Choosing up front how many bars you are looking for can start to help maybe influence / determine your position sizing, risk, stop, trade frequency etc.
The best traders I have seen always have a very clear time frame in mind.
Have included a chart of AOE, which part of the move belongs to you?
This exercise will be huge for your own progress (and other forum members too) congratulations you just took the next step towards long term success
Focus
I would like to think we could have rode that whole trend Focus...i think my trailing stop would have held out, only just though.
Heres a little summary of the rules:
The open book system rules.
Universe: IG Markets Controlled Risk securities list
Starting Capital: $75000, unleveraged
Trade duration: Medium to long term
Trade direction: Long and short
Risk % per trade: 1% of available capital per trade
Position size: To be determined by fixed fractional positioning @ 1% capital risk:
Initial stop: Just below strong technical support
Breakeven Stop: 2 x initial stop
Trailing stop: just below new higher low
Profit stop: Yet to be determined - open to discussion.
Heres a few potentials for Monday.
Cheers,
Anything I'm missing here?
Probably
CanOz In all seriousness if the quality of setup you are looking at is like the one above,then your likelyhood of success is very remote.Your attempting to trade against the governing trend.
When taking a discretionary trade
I ALWAYS ask myself.
(1) Where is the trade relative to the governing trend.
(2) How long am I likely to be able to stay with the trend.
(3) Why should I NOT be in this trade?
Sure you can trade pullbacks.
But the above doesnt qualify as a pullback does it?
Frankly I wouldnt even be looking for a short setup in it either.
Remember stocks run in 4 cycles.
(1) Accumulation
(2) Uptrend
(3) Distribution
(4) Retracement.
You want to trade OUT OF (1)
or WITH (2)
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