My open book trading plan - Two month test

CanOz · 2 July 2007

nizar said:
Not sure if this is directed towards me.
But i never move stops down.

What is being discussed here it placement of the initial sotp.

Ok, and please keep the comments coming, it doesn't hurt to get a little off track either, as long as you bring the subject yourself too.

The stop level to me, and where i would always make mistakes, needs to be a proven strong technical support. Take MAH, the stronger support looks to me like the older support as Nizar pointed out, but then it takes the trad out for R/R reasons.

Looking at QBE, from a stop point of view ONLY, it has proven support at that lower level, more so than it would have had at the higher level in my view as it already failed that move....Not that we're considering it...but only from the view of the R/R.

So bearing this in mind everyone, the ideal trade is what?

-Strong close support
-very bullish trend
-confirming price action
-A short term target that you can estimate and that has a good reward for that risk taken

Cheers,

CanOz · 2 July 2007

Also for consideration and for those reading along that are wondering what a profit stop is, here is an example of a stock that may have hit some profit stops today. Most profit stops would be set much higher right, but this gives you a general idea of what the price action might look like on a profit stop...Whats the % increase that most of you use on your systems? 20, 30. 40% increase in so many bars?

Cheers,

CanOz · 2 July 2007

Well i bought MAH at 1.34 for my paper traded portfolio. Since were trading based on EOD Friday, i waited until we had a good strong close today then lets say i bought them at market and got them at 1.34.

When i did my FFP i used 1.33, so i ended up buying 7500 based on a 1.23 initial stop. So i actually went over my allowed risk, oops, is this a bad thing?

Comments on my purchase.....basically i just went and did it as we'd be forever talking about it...

Cheers,

Disclosure ( i don't actually own them, i just pretended to buy them)

Porper · 2 July 2007

CanOz said:
Well i bought MAH at 1.34 for my paper traded portfolio. Since were trading based on EOD Friday, i waited until we had a good strong close today then lets say i bought them at market and got them at 1.34.

When i did my FFP i used 1.33, so i ended up buying 7500 based on a 1.23 initial stop. So i actually went over my allowed risk, oops, is this a bad thing?

Comments on my purchase.....basically i just went and did it as we'd be forever talking about it...

Cheers,

Disclosure ( i don't actually own them, i just pretended to buy them)

Good on ya for pulling the trigger Can, we could have discussed the pros and cons of each stock forever and never got on with it.

I personally wouldn't have gone with MAh, but we are all different.

To me it looks like it is just dying to retrace having had a surge and a half all at once.

First support to me is around $1.10, then good support at under a dollar.It has type A bearish divergence and is way overbought.

Having said that I am wrong more often than I am right so it will probably do well

tcoates · 2 July 2007

Can - the ideal trade is one that works in your favor. Or...there is no such thing as the ideal trade. If you could define the ideal trade then... ???

what you do therefore is work the probabilities out in your favor so that you have a chance of "winning", using a combination of the indicators and/or oscillators. Or you might follow EW or be a fan of Gann. If we knew the ideal trade, we would take it every time

The point is the ideal trade will be different for different people. Though the end result (the goal) is the same... $$$

Tim

CanOz · 2 July 2007

tcoaates_au said:
Can - the ideal trade is one that works in your favor. Or...there is no such thing as the ideal trade. If you could define the ideal trade then... ???

what you do therefore is work the probabilities out in your favor so that you have a chance of "winning", using a combination of the indicators and/or oscillators. Or you might follow EW or be a fan of Gann. If we knew the ideal trade, we would take it every time

The point is the ideal trade will be different for different people. Though the end result (the goal) is the same... $$$

Tim

Yeah all true, but i guess maybe we need define what R/R we're looking for before we go looking...what is the acceptable R/R that most here like when trading descretionary system?

3:1, 4:1?

Porper, lol! Yes i thought bugger it, lets get into a trade. I'll have to update the spread sheet now, we have 750 less capital to risk and 7500 less capital to invest with now.

Go MAH!....ooops was that "hope" coming out.

Cheers,

questionall_42 · 2 July 2007

CanOz said:
Well i bought MAH at 1.34 for my paper traded portfolio. Since were trading based on EOD Friday, i waited until we had a good strong close today then lets say i bought them at market and got them at 1.34.

When i did my FFP i used 1.33, so i ended up buying 7500 based on a 1.23 initial stop. So i actually went over my allowed risk, oops, is this a bad thing?

Comments on my purchase.....basically i just went and did it as we'd be forever talking about it...

Cheers,

Disclosure ( i don't actually own them, i just pretended to buy them)

Can - going over your allocated risk is NOT a good thing. You create rules to follow, and although this just paper trading, this is an exercise in working out how to make profitable trades for you. Part of this exercise should be to find out what your risk/return should be.

Also, you did mention earlier in this thread that you are lacking patience (i couldn't find it just now). And if you are impatient for a paper trade, then this spells trouble for the real thing.

Picking stocks is one factor in a good return; your trading psychology is as important.

Btw, I commend you for taking public and good luck.

CanOz · 2 July 2007

questionall_42 said:
Can - going over your allocated risk is NOT a good thing. You create rules to follow, and although this just paper trading, this is an exercise in working out how to make profitable trades for you. Part of this exercise should be to find out what your risk/return should be. Bugger, sorry. Oh well, what should i have done, i tried to get them at 1.33?

Also, you did mention earlier in this thread that you are lacking patience (i couldn't find it just now). And if you are impatient for a paper trade, then this spells trouble for the real thing. As far as emotions go, its my biggest downfall, afraid to miss out, whats yours?

Picking stocks is one factor in a good return; your trading psychology is as important. Absolutley, i'm on the last chapter of "Trading in The Zone" now, great book, for life too, not just trading.

Btw, I commend you for taking public and good luck.

I hope you're learning as much as me, i just wish we could all do this in person, its much easier to understand the goodwill and intent.

ice · 2 July 2007

CanOz said:
When i did my FFP i used 1.33, so i ended up buying 7500 based on a 1.23 initial stop. So i actually went over my allowed risk, oops, is this a bad thing?

Yes; you either have rules or you don't. What you are in effect saying is that you don't.

Gutsy though to do all this in public. I hope it all comes together for you.

ice

tech/a · 2 July 2007

OK.
I bought this at $1.29 this morning.(So there is someone who is trading it--good bad and the ugly).
So lets think about what's happened CanOz.

The trade "had" a low risk entry with a much better R/R with a 7c stop that a stop at 17c risk.
So first thing Id pick up on is pulling the trigger when you are in the position to take advantage of an opportunity.By widening the risk (Stop) the trade becomes mediocre.

Firstly on the stop.

Highs/Lows which are 10 yrs old are not going to act as much resistance or support,whatever the case maybe.
Think about why support and resistance works.
Lets look at resistance. The closer a high is to a retest the more influence it will have.Particularly if you have very high volume on the old high with a long range bar,and price corrects with a "V" top. Many will have been caught in this type of move and will be happy to get their money back.Hence selling normally comes in and acts as resistance at these "Nearby" levels.

So it is unlikely that holders of stock at the 10 yr high are eager to sell out now.I mentioned the 10 yr high simply to point out that its been 10 yrs since MAH has been here.

So first chart the Reasoning behind my trade/stop and other reasons why I saw this as low risk.

OK
Now I'm in the trade I want an "Idea" where this could go.I dont know and my analysis will only give me a guide.The story is being painted bar by bar and the whole picture is being played out in the past price history. I want like everyone else to gain as much as I can from the move. (I actually wish to do this by Friday as I'm leaving for a few weeks to have some R&R on an Island )
I dont wish to leave a new trade open when away for a few weeks---Anyway.

From the wave count from GET this "Could" be near its Wave 3 completion.
So some here maybe correct in that this is screaming correction.I cant personally see any signs of this.The count may not be correct--GET does get it wrong and so do I.But I think this has atleast $1.44 possibly beyond particularly if we continue to see lack of selling and consistent buying.

Now while you dont have the software and it is handy but not a necessity,I include it in the hope that you may get an Idea of the way I'm thinking on this. Others will/may have different views.But analysis is there to be proven correct or to be proven incorrect (to borrow a Radgism).

So back to your buy.
My position is currently more profitable and will continue to be so.
As my stop is closer and I could purchase more with the SAME risk.
I took the opportunity based upon my analysis earlier.

CanOz · 2 July 2007

tech/a said:
OK.
I bought this at $1.29 this morning.(So there is someone who is trading it--good bad and the ugly).
So lets think about what's happened CanOz.

The trade "had" a low risk entry with a much better R/R with a 7c stop that a stop at 17c risk.
So first thing Id pick up on is pulling the trigger when you are in the position to take advantage of an opportunity.By widening the risk (Stop) the trade becomes mediocre.

Firstly on the stop.

Highs/Lows which are 10 yrs old are not going to act as much resistance or support,whatever the case maybe.
Think about why support and resistance works.
Lets look at resistance. The closer a high is to a retest the more influence it will have.Particularly if you have very high volume on the old high with a long range bar,and price corrects with a "V" top. Many will have been caught in this type of move and will be happy to get their money back.Hence selling normally comes in and acts as resistance at these "Nearby" levels.

So it is unlikely that holders of stock at the 10 yr high are eager to sell out now.I mentioned the 10 yr high simply to point out that its been 10 yrs since MAH has been here.

So first chart the Reasoning behind my trade/stop and other reasons why I saw this as low risk.

OK
Now I'm in the trade I want an "Idea" where this could go.I dont know and my analysis will only give me a guide.The story is being painted bar by bar and the whole picture is being played out in the past price history. I want like everyone else to gain as much as I can from the move. (I actually wish to do this by Friday as I'm leaving for a few weeks to have some R&R on an Island )
I dont wish to leave a new trade open when away for a few weeks---Anyway.

From the wave count from GET this "Could" be near its Wave 3 completion.
So some here maybe correct in that this is screaming correction.I cant personally see any signs of this.The count may not be correct--GET does get it wrong and so do I.But I think this has atleast $1.44 possibly beyond particularly if we continue to see lack of selling and consistent buying.

Now while you dont have the software and it is handy but not a necessity,I include it in the hope that you may get an Idea of the way I'm thinking on this. Others will/may have different views.But analysis is there to be proven correct or to be proven incorrect (to borrow a Radgism).

So back to your buy.
My position is currently more profitable and will continue to be so.
As my stop is closer and I could purchase more with the SAME risk.
I took the opportunity based upon my analysis earlier.

Good on ya!:

Pretty gutsy buy, see i chickened out and waited for confirmation...maybe i had no need to, but you didn't wait, so in your mind, as long as there was no great fall, that was enough to buy it?

Cheers,

PS, just give me your account codes and i'll manage your stop for you while your gone

>Apocalypto< · 2 July 2007

Can,

as i see tech sharing trades and you too.

this is my AUD trade that I made last Thursday.

Ok, i am more aggressive in FX due to the way the market moves.

The set up was watching a retrace happening as u see i have marked down 1 2 3 points of support made on my minor support line just before the green entry period. that showed a double bottom with the shadow of the last red period.

with the new green period showing aggressive buying with confirmed support in the 50% fibb range backing up my minor three touch support combined with the current trend line being un tested and resumed a long it, was the evidence to go long, as you can see it worked out.

my intial stop was at 83.28 under the 50% point and under the low point of the shadow. I do not like to place stops on solid numers support always like to move off them. but my stop is now at 84.90 tonight i will do a break down to start planing a retrace.

I do not use gann in any FX plays as fx does not seam to care about 45 degree harmony to much. And I was warned against it buy a privet fx trader as it can be unreliable. I use minor support with trend direction, FIBB.

hope that can give you new ideas to ponder.

All the best.

cheers
Joseph

nizar · 2 July 2007

tech/a said:
OK.
I bought this at $1.29 this morning.(So there is someone who is trading it--good bad and the ugly).
So lets think about what's happened CanOz.

The trade "had" a low risk entry with a much better R/R with a 7c stop that a stop at 17c risk.
So first thing Id pick up on is pulling the trigger when you are in the position to take advantage of an opportunity.By widening the risk (Stop) the trade becomes mediocre.

Firstly on the stop.

Highs/Lows which are 10 yrs old are not going to act as much resistance or support,whatever the case maybe.
Think about why support and resistance works.
Lets look at resistance. The closer a high is to a retest the more influence it will have.Particularly if you have very high volume on the old high with a long range bar,and price corrects with a "V" top. Many will have been caught in this type of move and will be happy to get their money back.Hence selling normally comes in and acts as resistance at these "Nearby" levels.

So it is unlikely that holders of stock at the 10 yr high are eager to sell out now.I mentioned the 10 yr high simply to point out that its been 10 yrs since MAH has been here.

So first chart the Reasoning behind my trade/stop and other reasons why I saw this as low risk.

OK
Now I'm in the trade I want an "Idea" where this could go.I dont know and my analysis will only give me a guide.The story is being painted bar by bar and the whole picture is being played out in the past price history. I want like everyone else to gain as much as I can from the move. (I actually wish to do this by Friday as I'm leaving for a few weeks to have some R&R on an Island )
I dont wish to leave a new trade open when away for a few weeks---Anyway.

From the wave count from GET this "Could" be near its Wave 3 completion.
So some here maybe correct in that this is screaming correction.I cant personally see any signs of this.The count may not be correct--GET does get it wrong and so do I.But I think this has atleast $1.44 possibly beyond particularly if we continue to see lack of selling and consistent buying.

Now while you dont have the software and it is handy but not a necessity,I include it in the hope that you may get an Idea of the way I'm thinking on this. Others will/may have different views.But analysis is there to be proven correct or to be proven incorrect (to borrow a Radgism).

So back to your buy.
My position is currently more profitable and will continue to be so.
As my stop is closer and I could purchase more with the SAME risk.
I took the opportunity based upon my analysis earlier.

Tech, thanks for taking the time.
Some great stuff here.

T.I.
To answer your question i use 1% of initial capital for stops and position sizing.

Can.
AED nice one, im still holding. The topic of estimated R/R and profit stops/targets is one of interest to me, because usually, since i buy stocks in as much blue sky as possible, i find it hard to calculate a point where the run may be exhausted. I just let them go for as long as possible, pyramiding into the winners on the pullbacks and raising the stops when a new support level is made. Exit is triggered when the trailing stop is hit.

CanOz · 2 July 2007

The topic of estimated R/R and profit stops/targets is one of interest to me, because usually, since i buy stocks in as much blue sky as possible, i find it hard to calculate a point where the run may be exhausted. I just let them go for as long as possible, pyramiding into the winners on the pullbacks and raising the stops when a new support level is made.

Yeah, me too, a great interest....and there are plenty of traders that do exactly that, set the inital stop, and just ride the trend.

From the quote i just posted on the 97% loser thread....gotta love it.

! However, it is always in your best interest (as a trader) to manage your exposure so that your profits are protected while at the same time you are positioned to benefit while the trend continues. This is maximizing your market exposure. This is why many professionals use trailing stops more often than targets. The trailing stop allows the professional to manage profitable positions with the trend so profits continue to grow for the full duration of the move.

CanOz · 2 July 2007

hope that can give you new ideas to ponder.

All the best.

cheers
Joseph

Thanks TI, what you have there is called confluence right? Several indicatos, S & R , Fibb, supporting the same concluesion making for a higher probability outcome...Applicable to any timeframe too?

Cheers,

tech/a · 3 July 2007

An example of a different type of trade with a low risk entry.

MAR

(Not advice simply an example,seek your own advice I'm a builder!).

happytrader · 3 July 2007

CanOz said:
Well i bought MAH at 1.34 for my paper traded portfolio. Since were trading based on EOD Friday, i waited until we had a good strong close today then lets say i bought them at market and got them at 1.34.

When i did my FFP i used 1.33, so i ended up buying 7500 based on a 1.23 initial stop. So i actually went over my allowed risk, oops, is this a bad thing?

Comments on my purchase.....basically i just went and did it as we'd be forever talking about it...

Cheers,

Disclosure ( i don't actually own them, i just pretended to buy them)

Well done for waiting for a strong close and (hypothetically) buying at EOD.

Cheers
Happytrader

CFD · 3 July 2007

happytrader said:
Well done for waiting for a strong close and (hypothetically) buying at EOD.

Cheers
Happytrader

I guess a question is, was the day before a strong close?
On tech/a's chart the high volume spike on 27/6 did not indicate sellers had been satisfied (ie overtaken by buyers), so I'm thinking Can did well to wait another day for confirmation.

IFocus · 3 July 2007

HI Can

MAH seems to short term for me for where it is in terms of probability more about this later

I though maybe some thing like SEK might be more your story, have a look at the weekly hope this helps

Focus

CanOz · 3 July 2007

IFocus said:
HI Can

MAH seems to short term for me for where it is in terms of probability more about this later

I though maybe some thing like SEK might be more your story, have a look at the weekly hope this helps

Focus

Yes i agree and i have had it on a watchlist for a while now. I love that consoladation on or near recent highs, seems to have the effect of gradually removing the weaker hands from the supply, IMO.

You want to suggest where a strong support might be? I'm thinking apex?

Excellent opportunity....not sure its the kind Tech prefers, but we need all sorts right?

Cheers,

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