My trading strategy blows goats... should I change?

[Family_Guy]

My strategy is pretty simple. My goal is/was to feed the family. With no debts i worked that out to about $150/day (5 day week).
So i thought, throw 10 or 20k at something, pull it out as quick as possible for a quick small profit, get up and go do some housework (or whateva)

It's worked a treat so far. Lost some dollars along the way, but done pretty well since going head first in April 08.

But just lately it's gone pear shaped. Not as in lost money. You see, i bought a couple of what i thought were well oversold stocks, in particular AIO and MRE and in Jan it was ESG, BRM etc. Sold out as quick as i could and was very happy at the outcome. But less than a week after selling all, all doubled in price and i wasnt there.

So OK, i turn 20 into 26, but it could have been 20 into 40.......see my problem?

Someone told me once before i started trading to set goals and to stick to them. Should i be changing goals or just be happy i ain't sitting here in socks only??

 

[Garpal Gumnut]

Re: My trading strategy blows goats...should i change?

My strategy is pretty simple. My goal is/was to feed the family. With no debts i worked that out to about $150/day (5 day week).
So i thought, throw 10 or 20k at something, pull it out as quick as possible for a quick small profit, get up and go do some housework (or whateva)

It's worked a treat so far. Lost some dollars along the way, but done pretty well since going head first in April 08.

But just lately it's gone pear shaped. Not as in lost money. You see, i bought a couple of what i thought were well oversold stocks, in particular AIO and MRE and in Jan it was ESG, BRM etc. Sold out as quick as i could and was very happy at the outcome. But less than a week after selling all, all doubled in price and i wasnt there.

So OK, i turn 20 into 26, but it could have been 20 into 40.......see my problem?

Someone told me once before i started trading to set goals and to stick to them. Should i be changing goals or just be happy i ain't sitting here in socks only??

Its not a problem mate.

Its called greed.

Nothing wrong with that.

Keep posting especially when 40k goes to 5k.

You don't seem to have a plan .

gg

 

[Family_Guy]

Re: My trading strategy blows goats...should i change?

Keep posting especially when 40k goes to 5k.

RIO, BNB, OZL.......they were my big ones

 

[So_Cynical]

Re: My trading strategy blows goats...should i change?

Family_Guy as u should of learned by now...u just cant get it right all the time.

Having a exit only on a trailing stop loss policy seems to be the go.

 

[Timmy]

Re: My trading strategy blows goats... should I change?

Stop for a moment and think of the goats, I am sure they are quite happy with your current strategy.

 

[tech/a]

Simple solution.

Let a % of the profit ride.

I know of a trader who 's strategy was to keep kis winners until they reached 100% or were stopped out.
Those that reached 100% he would sell the initial capital value and hold the rest as a free trade with a wider fixed stop.

Over 6 yrs he had 30 in his stable and if he needed cash would just sell a handfull of the worst performing stock.

 

[Sean K]

Simple solution.

Let a % of the profit ride.

I know of a trader who 's strategy was to keep kis winners until they reached 100% or were stopped out.
Those that reached 100% he would sell the initial capital value and hold the rest as a free trade with a wider fixed stop.

Over 6 yrs he had 30 in his stable and if he needed cash would just sell a handfull of the worst performing stock.

Hm, I like that idea. Might give it a run. Cheers tech.

 

[Megabuzz]

Ya cant go broke taking a profit! Dont beat yaself up.

Megabuzz

 

[Trembling Hand]

Ya cant go broke taking a profit! Dont beat yaself up.

Megabuzz

Of course you can. If you take your profits at $500 but you lose $1000 on a bad one you will go broke very quickly.

Even worse is I think family guy has said that he wants to pay daily living expensive from a very small capital base. Working out what you need per day is crazy. Because in reality you really need to make 4 times that each day.

 

[beamstas]

Of course you can. If you take your profits at $500 but you lose $1000 on a bad one you will go broke very quickly.

Even worse is I think family guy has said that he wants to pay daily living expensive from a very small capital base. Working out what you need per day is crazy. Because in reality you really need to make 4 times that each day.

Yeah
And he wants to make $150 a day ~250 days a year
Thats $37,500 a year

IMO you'd either need to be really good to make $37,500 EVERY YEAR if you trade off only having $20,000.

Also because that $37,500 a year is on expenses, you are effectively having a $0 capital growth. So you need to produce amazing results year in year out just to keep food on the table.

 

[Trembling Hand]

Also because that $37,500 a year is on expenses, you are effectively having a $0 capital growth. So you need to produce amazing results year in year out just to keep food on the table.

And there is the problem with working to a minimum daily figure. You get there on a good day/trade and stop. But stopping out a winner is toxic to long term profitability. You end up looking back after 6 months and doing the what if game. You soon realise having a daily target, especially a low one, just sets you up for failure.

Better to have a system/target that has a chance of making $10,000 per day rather than $150. What happens if you only get half way there. With the $150 system you will be bankrupt, with the $10,000 getting only half way to your goal will mean a few less options on your 50' boat.

 

[beamstas]

And there is the problem with working to a minimum daily figure. You get there on a good day/trade and stop. But stopping out a winner is toxic to long term profitability. You end up looking back after 6 months and doing the what if game. You soon realise having a daily target, especially a low one, just sets you up for failure.

Better to have a system/target that has a chance of making $10,000 per day rather than $150. What happens if you only get half way there. With the $150 system you will be bankrupt, with the $10,000 getting only half way to your goal will mean a few less options on your 50' boat.

Another problem too. It gets to 2 oclock and you still havn't made any money. The family will be hungry.... Most likely what will happen is you'll start to gamble rather than trade to try and get the bread on the table

Brad

 

[Wysiwyg]

My strategy is pretty simple. My goal is/was to feed the family. With no debts i worked that out to about $150/day (5 day week).
So i thought, throw 10 or 20k at something, pull it out as quick as possible for a quick small profit, get up and go do some housework (or whateva)

Two full long ASX200 contracts at 3200 points would have pulled 25k in less than a month at 3700 points.Hindsight, but the bounce was not.

Anything is possible.

Stop for a moment and think of the goats, I am sure they are quite happy with your current strategy.

Nice to see a moderator with a GSOH.

 

[voyz]

lucky goats...

 

[ivant]

Simple solution.

Let a % of the profit ride.

I know of a trader who 's strategy was to keep kis winners until they reached 100% or were stopped out.
Those that reached 100% he would sell the initial capital value and hold the rest as a free trade with a wider fixed stop.

Over 6 yrs he had 30 in his stable and if he needed cash would just sell a handfull of the worst performing stock.

hahaha he obviously invested at the start of a bull market. In that case, if he didnt sell at the right time, im supposing his net worth would be ... the same as it was 6 years ago less inflation.. good idea on paper though

Of course you can. If you take your profits at $500 but you lose $1000 on a bad one you will go broke very quickly.

Even worse is I think family guy has said that he wants to pay daily living expensive from a very small capital base. Working out what you need per day is crazy. Because in reality you really need to make 4 times that each day.

haha i tried doing that at the start, i.e. aiming for a daily target. i learnt my lesson when i was holding onto a short term winner that was short a few dollars. i knew it was going to turn. I held on. i lost about 3 months in one go.

you are very accurate about expectancy of the trades, you can go broke taking profits. ive experienced it first hand when i was starting out in futures.

 

[tech/a]

hahaha he obviously invested at the start of a bull market. In that case, if he didnt sell at the right time, im supposing his net worth would be ... the same as it was 6 years ago less inflation.. good idea on paper though

1991
Was the first to introduce me to the Stock Market.
Was a pretty wealthy guy---I just liked the idea but have never done it.
Lost track of him in 1996


If you think about it a bit you'd realise that to lose the stock he had at free trade would have to be delisted.

 

[ivant]

1991
Was the first to introduce me to the Stock Market.
Was a pretty wealthy guy---I just liked the idea but have never done it.
Lost track of him in 1996


If you think about it a bit you'd realise that to lose the stock he had at free trade would have to be delisted.

Haha I do realise that it would need to be delisted. However, you have to remember that he would get stopped out at losses too. And after the effect of inflation, he would most likely end up close to break-even.

Let me explain, you hold 10 stocks (evenly spread capital) that you bought at $5 each. Over the course of the next 5 years you only have 5 left (due to those being stopped out) and they are worth $10. Five years later, you get out the capital you invested (on which you lost 5 years worth of inflation). If the stocks decline 80-90% over the next 2 years (like many did in the US), your are in a bit of trouble, because once again, after the effect of inflation, you are somewhere close to ground zero. Of course there are many variables that would need to be known to argue either successfully, but my point is that for this strategy to succeed and be effective, you need to rely on knowing when bull markets start, and bear markets end. In that case, it works very well because you make a lot of money.

 

[nunthewiser]

Simple solution.

Let a % of the profit ride.

I know of a trader who 's strategy was to keep kis winners until they reached 100% or were stopped out.
Those that reached 100% he would sell the initial capital value and hold the rest as a free trade with a wider fixed stop.

Over 6 yrs he had 30 in his stable and if he needed cash would just sell a handfull of the worst performing stock.

has used this as one strategy succesfully for years , in fact i still do . currently sitting on SBM free ride after removing capital and held EXT free ride until finally selling last of my holdings at 4.29 ..... i have no complaints with it and find it a nice risk free strategy to riding ones winners whilst providing a liquid capital base for the next prospective mover and shaker .

each to there own

 

[tech/a]

Haha I do realise that it would need to be delisted. However, you have to remember that he would get stopped out at losses too. And after the effect of inflation, he would most likely end up close to break-even.

Let me explain, you hold 10 stocks (evenly spread capital) that you bought at $5 each. Over the course of the next 5 years you only have 5 left (due to those being stopped out) and they are worth $10. Five years later, you get out the capital you invested (on which you lost 5 years worth of inflation). If the stocks decline 80-90% over the next 2 years (like many did in the US), your are in a bit of trouble, because once again, after the effect of inflation, you are somewhere close to ground zero. Of course there are many variables that would need to be known to argue either successfully, but my point is that for this strategy to succeed and be effective, you need to rely on knowing when bull markets start, and bear markets end. In that case, it works very well because you make a lot of money.

Anyone can put up an argument for a scenario of failure.

As I said he widened his stop and if I remember rightly he used 25% of the last high.
So he would only be risking 25% of his free trade.
I'm sure you or I could come up with an even better management method if we worked on it.

 

[beerwm]

I dont really get the whole "position trade" argument,
-ie. sell initial capital and have a free ride.

sure you can tell yourself that it is 'won' money, but it is still YOUR money. and if you lose it.. you still lose it.

there is an expectancy when you decide to sell off the initial stake, and by keeping the stake/or selling off some, you're hurting you're overall gain in the longrun.

you're just selling/not selling yourself out of $$$.