My trading - how I trade for a living

[tech/a]

With not native I mean not a native speaker of English. That is the reason why it could happen that I do understand something wrong or that i do not get it.

DaveM that is totally ok. Like I said there will be a point when it makes sense just trading your money because it is more porfitabel than go to work. Furthermore my trading is not very stressfull compared to working.

So at sometime you must have been working.
How did you scrape up $1.5 million?

 

[howmanyru]

First of all you need quiet some money to do it. I think you should have at least 1000000 USD to do it.

Damn, I knew there was something i was doing wrong!

 

[cynic]

Damn, I knew there was something i was doing wrong!

+1

And here was I thinking that I needed to sharpen my analytical and business skills!

 

[cynic]

I also, think you should report the results of your trades. I suggest reporting them as % / account. You are recording your initial trade risk so we see how much you are risking each trade. Reporting your results will help others see how you are going and it will keep you more accountable.

Using the O2 (OJ?) trade as an example. Your buy price was 135.00 (SL 120.00) and you risked 0.25%. This trade was closed at 138.20 with a profit of 3.20. However this result was 3.20/15.00 * 0.25 = 0.05%. This is a very small win and only slightly better than break-even.

You should risk more each trade if your initial SL is a disaster exit and you are trailing your exit stop closely after entry. This is a good reason for keeping detailed records. You would be able to look back at your past results and know the size of your average loss (AL) in relation to the size of your initial SL (Van Tharp's R multiple). If the AL is less than half your initial risk then you should use more risk. I would suggest a minimum 0.5% if your account size is big enough so that you can earn and withdraw your living expenses.

You can see in this snapshot of my xls. My AL = 0.4% with an average trade risk of 0.6%. This shows that I can keep my losses low and I should risk a little more, especially when the index (XAO) is up.

View attachment 50078

Thanks for sharing this Peter. When reading your posts I get the impression that you relish the opportunity to display your trading nous.

Perhaps a thread dedicated to discussion of your own trades and trading style might be worth pursuing.

Such an exercise may provide the added bonus of attracting other traders' input and you'll have the delightful experience of defending your method from those whom attempt to superimpose preferred ideologies on top of your own.

@RMT, like others I get a bit skeptical regarding motivation and sincerity when someone declares themselves as an accomplished trader, but you're to be commended for the courage in choosing to continue with this thread, and the diplomacy you've shown in the face of criticism.

 

[rmt]

@ cynic

Of course your analytical skills etc are very important but without the right amount of capital you will have little chance to make a living out of it. Imagine founding a company. Most companies need more than 50000 USD when you want to found them. You have to spend money on equipment etc.

I was an investment Banker during the good years and made enough money so I quitted in 2001 because it was way to stressfull and the good times were over. I was an M&A Banker and during the tech bubble you could earn quiet some money.

I am thinking if it would help if I would send the excel sheet directly via email? Any comments on that Yes or No just want to hear your opinion.

 

[cynic]

@ cynic

Of course your analytical skills etc are very important but without the right amount of capital you will have little chance to make a living out of it. Imagine founding a company. Most companies need more than 50000 USD when you want to found them. You have to spend money on equipment etc.

I was an investment Banker during the good years and made enough money so I quitted in 2001 because it was way to stressfull and the good times were over. I was an M&A Banker and during the tech bubble you could earn quiet some money.

I am thinking if it would help if I would send the excel sheet directly via email? Any comments on that Yes or No just want to hear your opinion.

Thanks for your reply. No need to email things to me directly, I am happy to just read whatever you post to this thread.

As for my opinion on anyone's trading strategy, it is simply this:
If you are consistently achieving superior returns (i.e. amply beating the best bank interest rates available) via your trading activities, then the last thing you need is the opinion of others - just keep doing what you're doing whilst it continues working for you!

 

[tech/a]

@ cynic

Of course your analytical skills etc are very important but without the right amount of capital you will have little chance to make a living out of it. Imagine founding a company. Most companies need more than 50000 USD when you want to found them. You have to spend money on equipment etc.

I was an investment Banker during the good years and made enough money so I quitted in 2001 because it was way to stressfull and the good times were over. I was an M&A Banker and during the tech bubble you could earn quiet some money.

I am thinking if it would help if I would send the excel sheet directly via email? Any comments on that Yes or No just want to hear your opinion.

Any comments?

Sounds like you want email addresses.
Sounds " Scam" like.
I think if anyone wanted to give you private access they would
Offer it up. You've asked at least twice to turn this into email
Based communication.

 

[rmt]

@ tech/a

You are really afraid of people and always think the worst. It is just an offer I just asked for opinions? I thought it would be easier, but there is no need for it.

But serious who would put out his personal email address. We are living in the freemail time. You just open an account at gmail or whatever for stuff like this. Then there is no danger.

I have two opinions so far and they both do not want emails. I am totally fine with it.

 

[Joules MM1]

pin

the excel sheet directly ...

to the forum/thread via the attatchment (see the paper-clip icon above)

i've attatched one, works fine.....

Tarantino says two ......really, he does......

 

[rmt]

update for 27.12.2012

 

[peter2]

@rmt: I hope these charts of your results (my calculations) will encourage you to keep posting and perhaps make you think about the placement of your initial SL and subsequent trade management.

It appears that you have been affected by the recent increase in volatility caused by the fiscal cliff issue. You won't be the only one. However your trading style won't cope with it very well as you prefer to use tight stops after the entry.

Not enough trades yet, but so far all your profit is due to the few futures trades.

[ ZC trade: I've used 740 as your initial SL not 770 as it's miles away from the break-down ? ]

 

[CanOz]

This is quite an interesting thread thanks to Peter and rmt...

Please keep it clean as this could be a great learning experience for many new traders...

Thanks again to rmt for being tolerant and Peter for being so generous with his time as well.

CanOz

 

[tech/a]

ZC trade: I've used 740 as your initial SL not 770 as it's miles away from the break-down ?

But Peter this effects his R/R? if he s quoting an amount of Risk. Eg .5---blah blah.

 

[rmt]

Very nice Peter

I hope there will be a time when my stock trades work out better. It is normal that there are phases where they are not working out so good. And there will be a time when the market will not raise all the time.


I think we can see more in a couple of month with more trades

 

[rmt]

update 28.12.2012

 

[peter2]

@tech/a: Yes, you're right. I'm hoping it's a mistake, although I don't know yet. An initial SL at 740 is half the size of the SL at 770 and this would allow twice as many contracts to be traded. This in turn allows a bigger reward if the trade works out well. The 770SL would allow a much larger trade risk (1% not 0.25%) as this price level is very unlikely to be hit after a successful break-down trade entry.

@rmt: The 770 SL is more suited to a longer term trader, trading monthly charts and this trader would not use tight exit stops. IMO the 740 SL is more suitable for the break out trader. Since this trade started well, removing the risk as you did to 709 is a sensible decision.

You had an earlier trade in this corn market selling the break-down through 740 (SL 760). This trade also started well but was closed by a one bar correction (very tight TS). One could have expected the price to have met some resistance at this 720 level as price has bounced off this level twice before. IMO the two logical trade management options were to use the R level (720) as an exit target. This would have earned a 20:20 RR. My second option would have been to anticipate the resistance and move the TS to BE and no closer allowing price to react at the 720 level and hope that it didn't bounce higher and close the trade at BE. The second option would have allowed the trade to remain open earning a much better RR.



Yes I know it's easy in hindsight, but I hope you understand that I am offering suggestions on general trade management using ZC as an example. Trading plans are made to help us manage each trade in a similar and consistent manner.

I don't see the benefit of the combination of large initial SL size with variable trade risk and tight trailing exit stops after entry.

I know I haven't seen much from you yet rmt, but I'm getting an early impression that your trading with "scared money". The large SL's make it unlikely to lose soon after entry, variable trade risk allows you use less risk when you don't feel comfortable, tight exit stops to protect the profits. If you think I'm right then you can improve your trading much more. If I'm wrong then I'll close the trade with a small loss.

 

[rmt]

Hello Peter many thanks for your posts.

My initial stop is my catastrophic stop when the worst possible outcome happens. Something that is really really unlikly and hard to imagine that it will happen. It just protects me if it runs up or down immediatley without any stopping.

I will adjust the stop pretty fast after I entered the market most of the time the next day. Like I said I trade for a living and I try to keep the risk pretty low. In the future there will be a time where I will catch the really good trade. Of course that doesnt happen all the time that is the reason I have to be patient. But when I catch the trade you will see how I will add up the positions and that is where i make my money

Still I am always interested in other opinions and I am really thankful for sharing them with me

 

[rmt]

happy new year to all

 

[peter2]

I thought you might have a lot more break-outs lined up after the FC vote. The great thing about stop orders is that you can place a few and wait for the market to get you in.

I'm interested in how you decide which stocks to trade. You have mentioned multiple timeframes (monthly, weekly, daily). Do you have a set process to help you find them?

 

[rmt]

update for today