Stop loss/profit?

[nioka]

I think what you have, is an inability to consider methods outside of your own experience/expertise.
.

Maybe you are right there but my experience has told me that you need an edge and that edge needs to be a better than a 50/50 chance. I will admit that a trader that has absolutely no emotion and has a foolproof planwill be able to make a profit with a 50/50 chance. That is not the position with most ASF members and I think it is necessary for someone to post a point of view that is contrary to the facts often presented here. If new traders are led into believing that it is as easy as some suggest then they will be in for a shock and maybe a disaster. The same disaster that many margin borrowers recently experienced. Another aspect of trading promoted by a lot of forum posters that I disagree with.

As for race horses; I had an uncle that made a fortune as a bookmaker and owner. He had a son, my cousin who tried to follow in his footsteps, lost the lot and more. Our family had a lot to do with horses. My grandfather owned and operated Cobb & Co change stations and was renouned for the quality of his horses, he also bred trotters and thoroughbreds. I've bred a few myself and until recently had 12 brood mares.They were more a hobby and an interest than an investment. Horses are great but they have let a lot of people down. I guess that is how you can compare horses to the stock market.

 

[nioka]

I think what you have, is an inability to consider methods outside of your own experience/expertise.
.

Maybe you are right there but my experience has told me that you need an edge and that edge needs to be a better than a 50/50 chance. I will admit that a trader that has absolutely no emotion and has a foolproof planwill be able to make a profit with a 50/50 chance. That is not the position with most ASF members and I think it is necessary for someone to post a point of view that is contrary to the facts often presented here. If new traders are led into believing that it is as easy as some suggest then they will be in for a shock and maybe a disaster. The same disaster that many margin borrowers recently experienced. Another aspect of trading promoted by a lot of forum posters that I disagree with.

As for race horses; I had an uncle that made a fortune as a bookmaker and owner. He had a son, my cousin who tried to follow in his footsteps, lost the lot and more. Our family had a lot to do with horses. My grandfather owned and operated Cobb & Co change stations and was renouned for the quality of his horses, he also bred trotters and thoroughbreds. I've bred a few myself and until recently had 12 brood mares.They were more a hobby and an interest than an investment. Horses are great but they have let a lot of people down.
I guess that is how you can compare horses to the stock market.

 

[Nick Radge]

The issue of an edge is that is multi dimensional. You are simply looking at one side of it.
A forum member will not come unstuck if they understand all the dimensions. As I stated earlier, I think there are 3 core area's required.

Start Jan 1, 2008 to todays close....

Maybe I need more of that bling...Wayne?



This post may contain advice that has been prepared by Reef Capital Coaching ABN 24 092 309 978 (“RCC”) and is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision.

 

[Wysiwyg]

100% What the !!! remember these guys Citrofresh (CTF) they opened at 22.5c and hit 70c (i know there are better examples for johnny on the spot)
on this announcement ...

27 September 2005
The Manager
Company Announcements Office
Australian Stock Exchange Ltd
4th Floor, 20 Bridge Street
SYDNEY NSW 2000.
ASX RELEASE
Test Results Confirm Citrofresh is Effective Against
Four Major Virus Types Including HIV & Avian

I learned to buy `at market` after that day.In a bull rush ANYTHING is possible percentage wise.FDL example.

Bring back the bull

 

[wayneL]

Maybe you are right there but my experience has told me that you need an edge and that edge needs to be a better than a 50/50 chance. I will admit that a trader that has absolutely no emotion and has a foolproof planwill be able to make a profit with a 50/50 chance. That is not the position with most ASF members and I think it is necessary for someone to post a point of view that is contrary to the facts often presented here. If new traders are led into believing that it is as easy as some suggest then they will be in for a shock and maybe a disaster. The same disaster that many margin borrowers recently experienced. Another aspect of trading promoted by a lot of forum posters that I disagree with.

To make that suggestion, one must discern the trader's modus operandi.

An edge doesn't necessary exist in a superior win rate at all. There are plenty of covered call/credit spread traders with 80% win rates, but who are overall losers.

Likewise, plenty of 35% win rate systems that are overall winners.

A fundamental trader/investor may well have an 80% win rate, and an edge may exist in research, but in such a method there are also contemporaneous factors that will temper that win rate when overall profit is considered.

Seeing as you've been around horses a bit, consider the professional punter. His/her win rate will be substantially less than 50%, yet to be a pro, he/she will have a definite edge... the edge is not in the win rate, it is in the mathematical expectancy which considers at least one other vector, namely risk/reward and sometimes frequency.

 

[tech/a]

Maybe you are right there but my experience has told me that you need an edge and that edge needs to be a better than a 50/50 chance. I will admit that a trader that has absolutely no emotion and has a foolproof planwill be able to make a profit with a 50/50 chance. That is not the position with most ASF members and I think it is necessary for someone to post a point of view that is contrary to the facts often presented here. If new traders are led into believing that it is as easy as some suggest then they will be in for a shock and maybe a disaster. The same disaster that many margin borrowers recently experienced. Another aspect of trading promoted by a lot of forum posters that I disagree with.

You are not considering that an "edge" can be gained with less than a 50% win rate.Radge demonstrates that below.
T/Trader has demonstrated it for 6 yrs.(35% ish win rate.)

Is it possible that both you and those who blow Margin accounts dont understand their correct use?

A further question.
Do you believe that you can have a win rate of 80% and still go broke?
I do.

 

[MRC & Co]

The issue of an edge is that is multi dimensional. You are simply looking at one side of it.

Absolutely.

I have a win % of 70%. I have no stop and my timeframe is generally around 5 years. Market moves up the majority of the time, no? Especially over a 5 year period recently.

Multi dimensional right there. Win % means close to nothing IMHO.

Oh, looks like Wayne already beat me too it, in a few more words!

 

[wayneL]

The issue of an edge is that is multi dimensional. You are simply looking at one side of it.
A forum member will not come unstuck if they understand all the dimensions. As I stated earlier, I think there are 3 core area's required.

Start Jan 1, 2008 to todays close....

Maybe I need more of that bling...Wayne?

There you go Nokia, that expectancy {((1 + reward/risk ratio) * win/loss ratio)-1} comes out to 0.71.

There is the edge.

 

[chrissyoscar]

I'm not new to the market but have been one of these investors who bought shares and then put them away.
I have been lucky and haven't lost money doing this.
With the share market so low I recently got finance and decided to buy more. I've been learning by reading and watching the finance/share market channels on Foxtel etc.
The thing that keeps coming up is all the experts say if the price of a stock drops significantly and for a reason then don't get attached to it and sell.
Don't hold onto it and hope it bounces back.
sell the stock and buy elsewhere, if it starts to come good and you still like it then get back into it.
I had caltex shares and about 1 week ago it took a dive and dropped about $1 in a day.
I got out the next day and on Thursday last week I bought Atlas iron.
Now by doing this I have made about $1000 on Atlas but if I still had Caltex I'll still be at a loss.
So I believe with the other's that it's not about making money on every stock you own it's about making the most of the ones that go up and limiting the loss on the ones that go down.
Although I have had shares for years i have never been an active investor and consider myself a newbie as far as knowledge in shares is concerned. I will make mistakes but hopefully learn from them.
This is an informative site and a great find.

 

[nioka]

There you go Nokia, that expectancy {((1 + reward/risk ratio) * win/loss ratio)-1} comes out to 0.71.

There is the edge.

I admit it. you have me convinced. Well 50% convinced.

 

[tech/a]

Absolutely.

I have a win % of 70%. I have no stop and my timeframe is generally around 5 years. Market moves up the majority of the time, no? Especially over a 5 year period recently.

Multi dimensional right there. Win % means close to nothing IMHO.

Oh, looks like Wayne already beat me too it, in a few more words!

Your not trading.
Pretty close to buy and hold.

 

[nizar]

Absolutely.

I have a win % of 70%. I have no stop and my timeframe is generally around 5 years. Market moves up the majority of the time, no? Especially over a 5 year period recently.

Multi dimensional right there. Win % means close to nothing IMHO.

Oh, looks like Wayne already beat me too it, in a few more words!

Great thread guys, looks like all the questions have been covered.

MRC & Co.

No stop eh?
I'd be very cautious in thinking you have a profitable method as I suspect the only time you are going to be make money is in bullmarkets.

I haven't read or heard of a trader who was successful in the markets and didn't use a stop of some sort.

 

[MRC & Co]

lol, note the

I am stating the typical "investor" methods. Showing how a high win % does not mean a thing.

I definately do not trade like that, as shown by numerous real time examples I have stated in the forums.

 

[nizar]

lol, note the

I am stating the typical "investor" methods. Showing how a high win % does not mean a thing.

I definately do not trade like that, as shown by numerous real time examples I have stated in the forums.

LOL yeh sorry i thought it was a bit out of character.

But looking above, it seems i wasnt the only one that was fooled :