Why didn't you re enter
You had plenty of opportunities
Being stopped to minimise potential losses shouldn't mean the stock should be forgotten
Often my best trades are 2/3/4 th attempts
No point beating yourself up
Not sure what that chart is but I don't think its A2M , have you considered using a binary algo stop although that will present problems applying it . Skillset , software and applications needed . But the harder , smarter you work the easier it will become . helps if you quantify your stops and do a statistical analysis to determine how tight/loose to obtain the optimum outcome . If you measure it , it becomes easier to improve it . Systematic approaches take a lot of the emotion out of it with defined probabilities ...
View attachment 71092
FWIW this is a very simple atr based stoploss code and is full adjustable the 5 is the period of Average and the '3' represents multiple of ATR to determine stop , once you have the basic code its easily adjusted to the various periods & multiples required . If you are interested in the code PM meI thought about algo/system trading before but I have no idea where to start. I do want to look into it eventually after I get my basics down.
Tying in with the previous discussion, I'm assuming you are going to treat your capital position as mark to market.
If so and you happen to have a runaway winner in your portfolio – that will skew your position risk calculations as heat and volatility on that large position impacts all the other decisions.
Try your numbers with a stock you brought at 13% of your portfolio and has become a ten bagger whilst the rest have in aggregate basically marked time. funding new positions at the calculated size may not be possible if you don't sell down the large position, so your intended diversification can be compromised as will the risk you apply to the new positions because relatively small swing in the oversized positions have disproportionate swings in the new position risk calculation.
"Fundamentals support medium to long term SP Appreciation/Depreciation, Technicals support short to medium term SP Appreciation/Depreciation, a combination of the two allows you to support short to long term SP Appreciation/Depreciation."
Sorry Ryan but I see these as insipid.
This is like saying
I'm going to the Stock shop with a generalized idea of long and shorter term
price movement both positive and negative.
AND----------------
Crank it down
Be specific. What are you going to do when your at the shop.
What if you make a right decision
What if you make a wrong decision
How will you know if your wrong or right decision is altering
How long will you stay wrong OR right?
Finally
HOW DO YOU KNOW THAT THE ABOVE WILL BE LONG TERM PROFITABLE?
Essentially, I choose stocks that have a fundamental growth quality that I seek (med to long term) and then apply my technicals on them (short to medium term) for managing the trade.
A wrong decision will be action upon immediately through various means - I could be thinking that I am right about the fundamentals backing the stock but if a stock hits a criteria that calls for an exit, I exit knowing that either my analysis was incorrect or my timing was off and I move onto the next opportunity--and keep an eye on the stocks in my watchlist which I add to and cull if the following happens..
I don't know if my strategy will be profitable tbh but I'm okay with that. I run the portfolio with proper stock selection, diversification and risk management and I shall see how it travels over time.
Hate to admit it but you're right on procrastination, I shall work on defining my TP down to the tee so as to avoid stumbling on either end of the trade.Ryan Trying to help you here.
You need to specifically define in words in a trading plan those things marked on BOLD.
That in BLUE needs to be in a play book.
You really need to be very specific and decisions need to be black and white and instant---no hesitation/indecision or procrastination.
I see Procrastination/indecision as one of your (and other Newbs ) stumbling blocks at both ends of a trade.
To answer your question Triathlete – and some waffle to boot.If he is using 13% to start with for position sizing then his portfolio size is 8 stocks to start with.
I can understand what you are saying about heat and volatility, but if you are on a multi bagger there is no need to sell it down until his stops have taken him out IMO......
He has already used his total capital for the 8 stocks based on the original position size and selection process.
The only reason I can see for selling out a good position is if he wants to increase the amount of stocks in his portfolio.
Brief look.
Considering the negativity in the last 2 days its done well to hold up there.
Id like to see a clear break of todays high
OR a pullback to the centre of the gap.
To be honest if this is set to go then resistance should be negligible.
Hey readers, wondering if I could get your guidance on APX?
I am a bit unsure on how to handle a stock that has a massive gap up in price after an earnings upgrade. From what I can tell the price action prior to the gap was trading in a minor tight consolidation pattern for about a month. And prior to the tight consolidation pattern, it was in a range between $2.40 to $3.
On a gap play like this, I would enter the stock on the day that it gapped(yesterday), set my iSL under the low of the day (i.e under $3.00 so I would set it at $2.90). Gap supported with strong volume (yesterday and today) + brokers raising their price targets.
The only issue I have with APX is that the previous resistance range of $3.40-60 would attract supply(sellers) into the market to B/E.
What would you guys do in this instance? Wait for the gap to fill (possibility of that not happening due to strong volume/interest), wait for the B/O above prev high or move on from the stock?
The stock fits my criteria on the macro front and fundamental side of things, just unsure on how to handle it on the technical side of things. May seem to be deviating from my strategy of B/O transforming into trend at this stage but I believe there is more upside for the stock and a upward trend to begin.
Thanks!
To answer your question Triathlete – and some waffle to boot.
Modelling around having a runaway winner and the question of what is the right capital figure to use in the calculations suggested in this thread.
Positon size 7 -13%
Initial risk 1%
Assumptions:
Initial account 50K
Trailing stop to ride medium term trends 20%
First question to answer: what do you regard as your capital?
1)Mark to market.
2)Initial Capital + closed trades
3)Mark to market less heat
Scenario: you brought an initial 8 positions for $6,250 each with an ISL at $5750.
3 stopped out at ISL so you have $17,250 back in the bank.
4 have moved up a bit to $7,500 each and you have moved your trailing stop to -20% = $6000
1 has blown the lights out and is a 10 bagger @ $62,500 trailing stop -20% at $50,000
So with 1) mark to market your capital is $109,750
Your position sizing calc is between $7,680 and 14,265. Even at 7% you cannot bring your portfolio back up to 8 positions with the capital you have available, unless you buy below your minimum parcel rule.
Your 1% risk is $1,097.
With 2) Initial Capital + closed trades, your capital is $48,500 and your calcs effected accordingly.
This definition of capital is good for a short-term trader but it can be slow to respond for a trend trader.
With 3) Mark to market less heat, your capital would be $91,250 and your calcs effected accordingly.
Whilst 3) overcomes the slowness of 2) it suffers the same problem as mark to market for basing the calculations.
Imagine your $62,500 position is SRX on the 13 March 2015. Your first chance to exit on breaching your stop, your 1) mark to market capital would be $71,288, 3) M2M – heat would be $65,288 and 2) Initial + closed capital would be $66,288
All your calculations on new position size/risk are being massively influenced by what happens to the one oversized position – is that logical?
While I'm waffling is risking 1% on 7% of your portfolio equivalent to risking 1% on 13% if not why have the same initial risk calc for both sizes. If you can't guarantee your stops against gap how much faith in the precision of the calculation should you have.
Maybe a standard position size (ratcheted over time) is worth considering.
Here is where a little diversity in trading methodology is important.
You have capital available, but your single strategy, viz trend following, is marginal currently as there is possibly some uncertainty around the strength of the overall market trend.
Market neutral strategies are one way of diversifying the portfolio.
Long term holds and working the position are a third way. There are of course a number of other strategies, all have their own risk/reward profiles and do not depend on a unilateral trend direction.
Don't think 'stock diversification' is the only type of diversification that you ought to think about.
jog on
duc
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