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

[beamstas]

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 $$$.

Not really

You buy 100 $5 shares ($500)
They go to $10 each ($1000)

You sell off 50 shares @ $10 each and get your $500 back
You now have 50 shares and your initial capital back to trade aonther lot of shares

You are not understanding that you are lowering your risk. Even though the potential profit is smaller, your risk is 0. If the shares fall back to $5 you get 10*50 + 5*50 = $750. If you are holding the whole lot and they fall back to $5 you get 100*50 = $500. (of course they would't go all the way back because you'd be using a stop... but you are still in front if you sell half your position).

Think about it like this. Would you argue pyramiding positions is bad? By your argument you'd say it's not good because the potential profit is larger if you don't pyramid and instead you just buy the whole position in one lot. But with pyramiding the risk is alot lower.

Ideally, you want to be trading with the lowest risk for the highest reward. If you sell half your position, you achive that.

Brad

 

[nomore4s]

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 $$$.

What Beamstas said but I'd also add it becomes easier to hold the stock for longer.
Look at stocks like PDN in the last bullmarket - if you brought in at 15c sold half at 30c it would have be easier to hold the shares to $9 as you are not so worried about the swings in price because in theory you have a risk free trade. That's how my little mind works anyway

 

[tech/a]

Thats the whole point.
holding a trade for as long as it keeps 75% of its latest high.
If another trade becomes aparent then trade it.
If you add another 100% position then do so.

You could do it with 25% increase in equity---hell there are 1000s of variations.

I didnt present the idea as the "Ducks guts" just something different.

 

[jonnycage]

more power to you mate for doing the trading as your income stream, im just starting to put that dream of mine together. letting go of that 8 to 6
life couldnt come sooner!
jc

 

[ivant]

Thats the whole point.
holding a trade for as long as it keeps 75% of its latest high.
If another trade becomes aparent then trade it.
If you add another 100% position then do so.

You could do it with 25% increase in equity---hell there are 1000s of variations.

I didnt present the idea as the "Ducks guts" just something different.

that one point changes a very large part of this strategy. i refer to the "keeping 75% of its latest high".

That turns into into a very decent strategy. It is simple, and effective. I still argue that timing is important, but you are essentially getting a lot of meat out of a trade. There are definitely no arguments about risk, as long as you get to the 100% return and dont get stopped out. For example, an entry somewhere around now, ie this year, after the lows get retested, or maybe after at least some pullback, the strategy could very well prove to make a lot of money. Although, if I was trading this I'd probably not even sell the initial stake, and just hold on until the stock starts trending downwards. You are not risking initial capital anyway, provided you do sell when it starts falling from its lows. Ie, if you bought Macquarie at 15 you would get 100% today, asit hit 30. if it falls from here 25%, you will sell it off at 22 1/2, still closing out at a profit and not risking your initial capital. Too bad I sold my MQG last week, otherwise I would have tried this strategy.

 

[carmen]

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??

I did literally the same thing with BHP, RIo, Pac Brands, Goodman in the recent bounce. Overall made 20% in a month but killing myself over Alesco. Bought in around $1. price didnt do much for a while so I sold out for immaterial profit/loss (cant remember). Literally next day they soared now up around 200%. I am putting it to lack of experience since this was my first 'dip in the water' so to speak.

 

[Family_Guy]

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.

I agree on that part. But I'm doing up to $20k trades. I have 15times that in my trading account made up of cash/stocks. GG mentioned the greed word and thats it, it's a greed thing, that human nature in all of us. I'm a simple man, i don't do this to become as rich as possible or whateva, i do it so i dont have to work. If i can pay my household bills then that makes me happy. But the whole point is i have been selling recently, and they all run. It was giving me the you know what's last week until the greed word was used. I think my system is safe because as a novice, if i got greedy i'd probably lose the lot.

I do like the idea of keeping a few of each trade as a little side earner and i'll work on that and see if i can include with what i am already doing.

Cheers for all your replies.

 

[ivant]

im still young and aggressive so i trade big. i can afford being wiped out a few more times. meanwhile im up 250 fold for the year. but as i said i risk a lot!

 

[beamstas]

im still young and aggressive so i trade big. i can afford being wiped out a few more times. meanwhile im up 250 fold for the year. but as i said i risk a lot!

250 fold for the year

So lets say you started with $10,000
Your account would now be $2,500,000

Bull

 

[beerwm]

im still young and aggressive so i trade big. i can afford being wiped out a few more times. meanwhile im up 250 fold for the year. but as i said i risk a lot!

250 fold in 4 months, haha

thats a trading claim i'd like substantiated

https://www.aussiestockforums.com/forums/showthread.php?t=15129

 

[nunthewiser]

im still young and aggressive so i trade big. i can afford being wiped out a few more times. meanwhile im up 250 fold for the year. but as i said i risk a lot!

mmmmmmm can this post be moved to the "TRADING CLAIMS "thread please



but hey man im impressed , where do i sign ?

 

[Timmy]

im still young and aggressive so i trade big. i can afford being wiped out a few more times. meanwhile im up 250 fold for the year. but as i said i risk a lot!

Keep going!

 

[Trembling Hand]

im still young and aggressive so i trade big. i can afford being wiped out a few more times. meanwhile im up 250 fold for the year. but as i said i risk a lot!

HOW???????????????????????????????????????????

I think you said your a futs trader that means in 4 months you have taken 50,000 odd ticks per contract?

 

[ivant]

Lol i meant for the financial year. 1500 in july, over 550k at this rate...

futures trading spi 200 and crude. i trade in 20-40 lots depending on how confident i am on the SPI, and usually about 5-10 barrels in crude, depending on how confident i am. i trade different strategies though.

i take usually around about 200-250 per trade, but that all depends on the trade. eg i started going long lightly in the 3500 a few months ago, and had most of my positions enter at 3200. i sold out at 3750. so most of my contracts made around about 400-500 points.

most of my money came in october and november last year and made close to nothing between december and feb.

 

[cutz]

Wow that sounds pretty impressive ivant, do you trade on your own account or do you work for a firm? How many years have you been in the game?

Sorry if you have already mentioned this, I’ve haven’t been through this thread.

 

[beamstas]

So you started with $1500 in july and now have $550,000

Give me your phone number and i'll give you my password to every trading account i have opened and you can trade them for me

If you keep at this pace your 550k will be $201,300,000 in 9 months time, and in 18 months time you should have $73,675,800,000 ie: the richest man in the world

Brad

 

[cutz]

Ease up you guys, he must have the vibe.

 

[ivant]

Oh my friend I wish that I have been trading 250 fold every year!! love to see myself wipeout next year haha. Unfortunately as size increases risk decreases. Then you have issues with liquidity. Then you volatility will ease off. Its been a great year for a short seller.

I have started paper trading when i was 13. traded my parents SMSF, didnt do too badly opened an account on my 18th bday. then went to futures 07 and tried everything under the planet. metastock was working overtime at that point when i tried to get a strategy. it was in late 07 i found something that worked ok, in terms of oversold/overbought indicators (that are about to die off, as soon as we hit a bull).

guys, dont get me wrong, i dont mean to brag and tell you how great i am. i do what i do because i love it. i told you that to underscore the point that increased risk can lead to increased results. and that sometimes it pays off to be risking more than 50% of your account size. i was trading over 100% of what i had on some trades. at the start of the year i also had a loan that i was paying off so technically i was going for broke at some points.

 

[nunthewiser]

personally think ya pulling yaself

no offense intended

gotta love simulators

 

[ivant]

personally think ya pulling yaself

no offense intended

gotta love simulators

i havent simulated since i turned 17.

you dont have to believe me man. really.. you dont. and im not going to go through the effort of proving myself. this isnt the point of a) this post b) this forum.

as i understand it, its a point of gathering where beginners seek help, and the more experienced get it. i think that people should concentrate on their trading first.

for your information ill be happy with 5-6 fold for next year.