Trading the SPI

[wayneL]

They didn't work very well last time we tried them, on this thread earlier in the year. We will see what happens today.

I wouldn't have said that.

There are days when nothing works, not even hindsite

BTW, Pivots have been around longer than Gann

 

[Bronte]

Action....4904 Low
A move to the downside lads

 

[Bronte]

Where are your stops neo / Realist ?

 

[neo]

Yeah, bugger!!..... just gave back half my mornings' profit!!!!!!!
Done for the day, definately now!!!!!
Should remember not to overtrade!!!!!!

 

[Realist]

Where are your stops neo / Realist ?

No stops!!!

What was my buy price at 12:50pm?

If I go long and it goes down a bit I hold. And hold.

(I can see the traders either fainting or laughing as I speak)

When's the last day you can sell? - 3rd week of September I think....


Hey has anyone thought of buying the SPI and holding for 3 months? Good investment?

 

[Bronte]

12.50pm
I will post a chart for us all to see

 

[Ageo]

Hey has anyone thought of buying the SPI and holding for 3 months? Good investment?

Usually when you are day trading its with some form of leverage.

Holding for 3 months would mean your stops at least 100 points or so away to allow for movement.

100 points to some people is a big risk factor

The reason why i daytrade is because i can place my stops at a risk level of no more than 1% of my capital which is usually 10 points away.

100 points away means a 10% risk on my capital

Plus there is other issues like financing costs etc..

I only hold shares/commodoties and currencies over night (if i have to). Indicies are always traded intraday and never held overnight.

Thats how i do it anyway

 

[Bronte]

My guess for what it is worth is buy long about 12:50pm and hold till 3:20pm.
We'll see how I do...

Ok

 

[Realist]

Ageo, most traders do what you do. Of course, it is what all the books and "experts" say. That does not mean it is right though.

I would never short without stop losses, but going long on an index which over time increases about 10% per year and is not tremendously "overvalued" at the moment it would not be too unwise to leave stop losses off and just wait for losses to recover.

Stop losses often lose more money than they save. I know most will disagree but it is how I feel.

Anyway - I'll see what my 12:50pm buy was and I tell you when I'll sell. It could be a month from now.

 

[Realist]

Thanks Bronte so I bought about 4912, and it went down to 4905.

Down $175 - no stop loss. I'll wait (and hope).

 

[Bronte]

4914 +2

 

[Bronte]

How is the book going Realist?
It has made you $50 !!!!!!

 

[Ageo]

I would never short without stop losses, but going long on an index which over time increases about 10% per year and is not tremendously "overvalued" at the moment it would not be too unwise to leave stop losses off and just wait for losses to recover.

Stop losses often lose more money than they save. I know most will disagree but it is how I feel.

lol realist are you on speed atm?

lets take your example of not having a stop loss.

I go long @ 4941 20 contracts ($20 per point move +/-)

lets say it then drops to 4841 but you decide to stay on hoping it goes up.

Let say it then moves over time to 4500.

That means you have a 491 point loss which = -$9821.

What happens if it moves down more? that is why i think you dont use leveraged products realist because in that post above it clearly shows you have no idea on "how to use them"

Sorry mate but im just being "realistic"

 

[Realist]

lol realist are you on speed atm?

lets take your example of not having a stop loss.

I go long @ 4941 20 contracts ($20 per point move +/-)

lets say it then drops to 4841 but you decide to stay on hoping it goes up.

Let say it then moves over time to 4500.

That means you have a 491 point loss which = -$9821.

What happens if it moves down more? that is why i think you dont use leveraged products realist because in that post above it clearly shows you have no idea on "how to use them"

Sorry mate but im just being "realistic"

Exactly, that is how all traders think. "What if the sky falls?"

They all use stop losses, and yet every trading book I read they tell me 90% of traders lose money. Hahaha..

Show me where your example has happened in the past few years though?

And for every one example you show me I can show you 10 where you'd make money to cover that large loss doing it my way.

In a market which goes up 10% year on year it is clear that holding longer and not just jumping when the indexs turns down a little will work. Unless some Fundamental reason like September 11 or a Hurricane destroying oil rigs or something happens.

The opposite when you are shorting though, if you are wrong jump cause the market will probably keep going up. I wouldn't short though - it is too dangerous, the odds are against you!

 

[Realist]

How is the book going Realist?
It has made you $50 !!!!!!

YUP!!!

Others would have jumped.

What is it now?

 

[wayneL]

Exactly, that is how all traders think. "What if the sky falls?"

They all use stop losses, and yet every trading book I read they tell me 90% of traders lose money. Hahaha..

Realist

90% of traders lose because of psychological reasons... lack of disipline, lack of capital, lack of knowledge, lack of a plan.

They take wins too quickly ands let losses blow out.

The simple expectancy equation shows how profit is obtained.

Actually, it is your thinking which is the classic losing traders psychology... no stops, it won't go down and if it does it will come back.

A disiplined, well capitalized trader almost cannot help being successful.

Cheers

 

[Ageo]

realist say your right for 5 yrs.

You make millions because the market over time grew.

But remember all it takes is for 1 crash (major crash) and your history.

anywayz realist, i reckon you should do the opposite and go for it! Put everything on the line.

I mean hey, like you said the market can only go up over the long term ay?

 

[Realist]

Trading with stop losses is done by Roulette punters.

They plan to leave with small losses and try and make large gains when their luck is in.

It works their losses are small and gains large.

BUT.. The problem is the number of small losses outweigh the large gains.

Most traders do not make money because of the many small losses and tax and fees and brokerage killing them.

It is only the one-off gains that keep them interested, much like gambling or lotto - people like to ignore the small losses and enjoy the large gains.


Wayne, your portrayl of trading being so easy to profit defies reality. Most traders lose, most experienced traders realise this and admit this, Guppy, Leon Whatshisname, Richard Fairleigh, Ben Graham, Warren Buffet and Brett Penfold acknowledge this.

So me where any credible person says "most traders make money"

There are only 2 types of people who consistently make money from Wall St. Brokers (who get money from brokerage), and Long Term well diversified value investors.

Traders, Punters, and specualtors overall lose money.

 

[Realist]

realist say your right for 5 yrs.

You make millions because the market over time grew.

But remember all it takes is for 1 crash (major crash) and your history.

anywayz realist, i reckon you should do the opposite and go for it! Put everything on the line.

I mean hey, like you said the market can only go up over the long term ay?

When in the past 50 years has the market ever lost 50% or more??

When has it even lost 20% or more??

You are telling me "the sky might fall"

When has it fallen????????????????????

The ASX doubled the past 3 years - and you are worried about some magical crash of 50% hahaha.

I'm telling you yes you are right it might fall, but the odds are it will rise and continue to rise.

I am right, so are you, just my probablity is way way higher than yours. The past 50 years is my reference.

What is your reference?

 

[swingstar]

Oh no, not in this thread too!