Position trading stocks on the ASX

[Cam019]

Hey guys,

I have been doing some research on T/A and have come across position trading. I had a search through the forum and there wasn't much on position trading so I was hoping to get some input/discussion in this thread in case there were others like myself out there interested in learning it from other like minded individuals.

1. I currently use CommSec as my broker and am wondering if it would be perfectly adequate to use their research platform to screen for stocks, review charts only after trading has ceased for the day and base my T/A off that?

2. How important are stop loss orders for position traders? They are obviously a fundamental part of shorter term trading, but how important is it for traders with longer time frames? Do stop loss and trailing stop orders really work as effectively for position traders due to price volatility over a longer term?

3. In regards to screening for stocks for position trading, is the use of moving averages beneficial? Such as looking for moving average crossovers or whether a price is currently trading above a certain period moving average?

4. Is weekly OHLC price frequency going to be better than daily OHLC for position traders to stay objective towards short term price fluctuations in the market?

Any helpful input would be greatly appreciated.

Thanks in advance,
Cam

 

[Trembling Hand]

What do you mean about ' position trading'? longer than weeks?

 

[Cam019]

Yeah, longer than weeks. Months, possibly years.

 

[Trembling Hand]

1. I currently use CommSec as my broker and am wondering if it would be perfectly adequate to use their research platform to screen for stocks, review charts only after trading has ceased for the day and base my T/A off that?

I would be surprised if CommSux had any tools worth using for T/A screening. Especially if you are going about it in a systematic way? How are you going to develop a plan or system to act on? I would be even more surprised if you could just read a few books or websites and then just start successfully trading a discretionary approach.

 

[Cam019]

I would be surprised if CommSux had any tools worth using for T/A screening. Especially if you are going about it in a systematic way? How are you going to develop a plan or system to act on? I would be even more surprised if you could just read a few books or websites and then just start successfully trading a discretionary approach.

Interesting. I don't know how I would develop a plan just yet. I would be just as surprised if I could read a few books and websites and start trading successfully, but we both know that's not going to happen. I'm not planning to jump straight it and start trading without a lot more knowledge. At the moment this thread is for questions that come to mind whilst I am doing a bunch of reading about T/A.

 

[traderxxx]

hi Cam019

take a hint from T/Hands post,
it is not a spelling error.

 

[tech/a]

There are a heap of ideas in Radge's
"Un Holy Grails"

 

[Cam019]

hi Cam019

take a hint from T/Hands post,
it is not a spelling error.

Hint taken.

There are a heap of ideas in Radge's
"Un Holy Grails"

Thanks tech/a. I will check it out.

 

[tech/a]

Had some experience here as I traded 7 yrs Tech trader as a system method. I put up $30K on margin with BT and pulled the pin 7 yrs later and pocketed $364K. The whole method is disclosed in Radges book along with about 5 others. I traded it live on Rages site "The Chartist" Its no longer there.(8 yrs ago!) Just wanted to prove to my self that a dumb Duck could do something in the trading field.
Much like many are doing here.

But I learnt a few things on the journey.(Others maybe different)

(1) Diversification limits profit (as well as risk).
(2) Best stop wriggle room I found was 8-15% for initial stop
Closer stops cause premature exits in many cases and wider see you stuck often in no mans land between your loss and your initial buy price.
(3) Wide exit rules (I used a 200EMA) will give back a lot of open profit but is necessary if you want to grab those huge moves.
(4) A good system will test at about 20-35% with less than 20% drawdown.
(5) Any investment system with a long time frame (My average hold was 320 days) will take
quite a while to show profit as you will exit many failures while a few hold up the ship.
(6) Incorporating a time stop is handy.
(7) Never deviate from the statistics you know from your testing.
If it trades out side of your blueprint chances are there is something not tested for going on.
(8) A Market filter maybe handy but have not fully tested it.
(9) Pyramiding definitely helps.
(10) Compounding profits and growing position sizing turbo charges everything.
(11) I hate tax!!

Although I had removed all capital before the Crash the system exited 90% positions with its stop a good
6 weeks before the crash ---even so I would have been about $100k worse off.
Including the crash 2 yrs later the system showed a 10 yr average profit of 9.5%. I haven't done it for some time but I'm sure its better than that now.

 

[stevo2]

Hi tech/a, could you please elaborate on "diversification limits profits"
cheers ian