A 70k bet that I can't make a 50% gain in 2009

Mr. Geez,

Was tooling around ET this A.M. and looked into your thread for the first time seeing it was authored by none less then Mr Geez himself. This seems precisely what I would expect from you somehow.............very funny.

Anyhow, sorting through your trades makes me want to pick your brain a bit live during the day if that is acceptable.

Keep kicking A$$.
 
5/01/09:

ET was down for me friday afternoon. Here are the last 2 trades of friday:

2:10 1500 ANR SHORT 23.86
STOP 24.00
TGT 23.58
EXIT 23.56 P/L +437.33


3:31 2000 XLNX SHORT 20.35
STOP 20.45
TGT 20.15
EXIT 20.43 P/L -174.28

*Mr Weinstein gave me a heads up to ANR being extended, so I shorted the lower high on the 5 min chart.

*XLNX short: The only reason I shorted this was to get positive for the day (if it went to tgt), so I wouldn't have a losing day all week. Lesson here: Don't let emotions get in the way of trading (ONCE AGAIN)
 
Week Ending 5/01/09:

Total P/L +1,319.30
21 trades
8 wins
11 losses
2 b/e

YTD P/L +16,152.79
110 wins
131 losses
14 b/e

AVG. 45.6 %
RATIO 1.91
 
Quote from sudhaker:

Geez,

How do you scan the stock for strength or weakness? Any tool (RadarScreen) or visual scan? I'm specially interested in logic and parameters used.

Thanks,
More...

Sudhaker,

I only do a visual scan to find strength and weakness. I keep a list up of the top 50 Nasdaq stocks and ETFS. I scan the gap list in the morning to find stocks moving away from the indexes, either strong or weak.
Here is an example of what I look for: 5/01/09 10:10 1000 QCOM SHORT
As the indexes moved up from 9:50 to 10:05 QCOM based at the lows (sign of weakness). As soon as the indexes start to reverse at the double top, QCOM breaks below the base(41.60), so I short "the weakest of the herd" looking for it to continue its weakness as the indexes move lower.
I actually had my eye on AMZN for the same reason, but the QCOM base looked "cleaner", so I went w/ this one instead.
This is one of the 4 patterns I look for: Stocks that have Rel. strength or Rel. weakness to the opening move of the market.
I look for this pattern alot on days when I have no bias going into the open (basically, when I have no clue whatsoever which way the markets will go).
Hope that helps.... -G
 
Quote from Jegnyr:

Mr. Geez,

Was tooling around ET this A.M. and looked into your thread for the first time seeing it was authored by none less then Mr Geez himself. This seems precisely what I would expect from you somehow.............very funny.

Anyhow, sorting through your trades makes me want to pick your brain a bit live during the day if that is acceptable.

Keep kicking A$$.
More...

You can pick your friends....
You can pick your nose....
But you can't pick your frien, oh nevermind....PICK AWAY Jegnyr
 
Hello Geez,

I live in Greece,trading mostly the Greek market,stocks and futures.Our market is not suitable for intraday trading (high commissions,low volatility,not very liquid),so I prefer swing trading,as they call it,through EOD charts.

Based on your approach to the market,I have thought of a plan that resembles yours,except it works with EOD charts.I'll post the details,if I don't bother you...

Since then,I must tell that this is by far the most interesting,inspiring and educational thread that I've found in this forum.Congratulations!

I believe that the key to your success is the money management part of your system.I've read most of the work done by Van Tharp and he taeches exactly this concept: trading is a game on probabilities and the good money management is the key first to survival and then to success.

A small question for now: many people have proposed to you to increase your bet size,by increasing your dollar risk,now that your account has grown up.You don't seem to be very comfortable with that...ok.My suggestion is: why don't you split your position ,say in 2 parts,take the 2:1 reward for the first part,and then go for a highest reward,say 3:1 for the rest? have you tested that idea? is this kind of strategy maybe reduces your 50/50 ratio of winning/losing trades?

Keep up...I'll post my strategy if you want to read it....
 
Quote from AA48:

Hello Geez,

I live in Greece,trading mostly the Greek market,stocks and futures.Our market is not suitable for intraday trading (high commissions,low volatility,not very liquid),so I prefer swing trading,as they call it,through EOD charts.

Based on your approach to the market,I have thought of a plan that resembles yours,except it works with EOD charts.I'll post the details,if I don't bother you...

Since then,I must tell that this is by far the most interesting,inspiring and educational thread that I've found in this forum.Congratulations!

I believe that the key to your success is the money management part of your system.I've read most of the work done by Van Tharp and he taeches exactly this concept: trading is a game on probabilities and the good money management is the key first to survival and then to success.

A small question for now: many people have proposed to you to increase your bet size,by increasing your dollar risk,now that your account has grown up.You don't seem to be very comfortable with that...ok.My suggestion is: why don't you split your position ,say in 2 parts,take the 2:1 reward for the first part,and then go for a highest reward,say 3:1 for the rest? have you tested that idea? is this kind of strategy maybe reduces your 50/50 ratio of winning/losing trades?

Keep up...I'll post my strategy if you want to read it....
More...

Thanks AA48,
First off, this is an open forum as far as I'm concerned, so feel free to post any ideas, suggestions, or criticisms.
Second, yes I have looked into splitting trades and I do split trades when we are in a nice trending market like we had from the middle of 2007 until 2009.
Here is why I do not split now:
Let's take the example that you posted. Taking 1/2 my position at 2 to1 and leaving the Back Half go for 3 to1.
I risk $200 per trade, and let's say I take a trade for 1000 shares w/ a stop .20 from entry and first tgt at .40 gain.
I exit 500 shares at +.40 (+$200) and let 500 go for 3 to1 (.60 gain).
If it gets to the 3 to1 tgt I exit 500 shares at +.60 (+300).
So for the whole trade I profit +500 -commission for three transactions (-21) = +479 net
My goal is a 50% trading avg.
Of the trades that do make it to the 1st tgt, let's say only 1/2 of those go to the 3 to 1 tgt (back half tgt) and I'll put the stop on that back half at +.20(lock in a $100 gain)...so let's do the numbers on 4 trades...2 that lose, 1 trade that goes to 3 to1, and 1 trade goes to 2 to 1, but the back half stops out at +.20 (+100):
2 losses -$428 (w/ commission)
1st win: +200 500 shares , +300 Back half -3 commissions ($21)= +479
2nd win: +200 500 shares, +100 back half - 3 commissions = +279.
Total for 4 trades =+330

Now, let's say I just take the wins at 2 to 1:
2 losses = -428
2 wins = $400 each - $14 commission = +386 net. 386 times 2 = $772
Total for 4 trades= +344
So I actually make more in this equation by taking the whole trade at 2 to 1 than trying to split.

Also, for me, the more I think...the dumber I get. I like knowing when a trade is going to begin and end. I don't like having to deal with trying to adjust a back half of a trade. Do I use trailing stops? Prior pivots? Breakeven? Trading like this sets up more uncertainty(for me) and it starts to make me 2nd guess what I should or could have done.
As most have seen..with me it's pretty much stop or target. Once I get into a trade I leave it to do what it's going to do. Either stop me out or make me money. I try to limit as many variables as I can.
Is this the perfect way to trade? Is there a perfect way to trade?? Of course not, but for me it's what works best.
When I do split trades.. I really like the trend in the market and the daily chart of the stock I enter, I look for at least 5 to1 on the Back Half of the trade. As for now, I am not confident (read:clueless) which way the market is going from here, so I'm taking all my trades at the 1st tgt. Hope that makes sense and helps as well. -G
 
Hello Geez,

thanks for your reply.I see,with great satisfaction,that we share the same perspective for trading....Just a probabilities game....

Van Tharp says that you can win 70% of the time and lose money and you can win 40% of the time and still make money....The key is the definition of a "winning trade".Many traders can't answer this simple question...."winning trade" is the trade that goes to your profit target,whatever that maybe.If your target is 3:1 and you have 40% winning trades,you are on top.

Traders should spend more time with these issues,and much more less with technical systems,indicators,etc.No system can be profitable if the ratio "average win/average loss" is less than 1.

Now for my system.

I pick up a stock and I watch the weekly chart.I want the stock to trend and I want to know clearly the direction of the trend.So,I am using ADX(14) and DI= and DI- for this.Of course,there are many ways to determine the direction of the trend,but this method identifies also if the stock trends or it consolidates.

Say we have an uptrend.I then examine the daily chart.I want to see "divergence" in price direction,that is at least 3 consecutive bars with lower lows.Then,I put a buy on stop order to buy 1 tick above the bar with the newest lower low.I have a restriction here...if the low of the setup bar is lower than the most recent low swing point,then I cancel the trade,because I am in doubt if this is just a correction of the trend in the weekly time frame,or it's the beginning of a trend change to the opposite direction.

If the setup triggers,I risk the setup bar,that is I put my stop-loss 2 ticks below the low of the setup bar,and I set a target for 2x(my technical risk).That is,reward:risk=2:1.If the setup bar doesn't trigger,the next bar becomes the setup bar.Inside bars don't count.I also ignore gaps (I don't take the trade).

I am waiting for your comments on this strategy.In the meantime,I have a question for you: while you are waiting for your profit target to get reached,and the price is going in your favor (say you have a 1.5:1 reward),do you consider of moving yourstop,say to breakeven? I've tried this technique,and sometimes works,sometimes doesn't.Price can go to breakeven,or 1-2 ticks more,and then rockets to your target.....

Sorry,if I confuse you with all these....But,I really like your approach and I think that this is the only way to be profitable....
 
Quote from AA48:

Hello Geez,

thanks for your reply.I see,with great satisfaction,that we share the same perspective for trading....Just a probabilities game....

Van Tharp says that you can win 70% of the time and lose money and you can win 40% of the time and still make money....The key is the definition of a "winning trade".Many traders can't answer this simple question...."winning trade" is the trade that goes to your profit target,whatever that maybe.If your target is 3:1 and you have 40% winning trades,you are on top.

Traders should spend more time with these issues,and much more less with technical systems,indicators,etc.No system can be profitable if the ratio "average win/average loss" is less than 1.

Now for my system.

I pick up a stock and I watch the weekly chart.I want the stock to trend and I want to know clearly the direction of the trend.So,I am using ADX(14) and DI= and DI- for this.Of course,there are many ways to determine the direction of the trend,but this method identifies also if the stock trends or it consolidates.

Say we have an uptrend.I then examine the daily chart.I want to see "divergence" in price direction,that is at least 3 consecutive bars with lower lows.Then,I put a buy on stop order to buy 1 tick above the bar with the newest lower low.I have a restriction here...if the low of the setup bar is lower than the most recent low swing point,then I cancel the trade,because I am in doubt if this is just a correction of the trend in the weekly time frame,or it's the beginning of a trend change to the opposite direction.

If the setup triggers,I risk the setup bar,that is I put my stop-loss 2 ticks below the low of the setup bar,and I set a target for 2x(my technical risk).That is,reward:risk=2:1.If the setup bar doesn't trigger,the next bar becomes the setup bar.Inside bars don't count.I also ignore gaps (I don't take the trade).

I am waiting for your comments on this strategy.In the meantime,I have a question for you: while you are waiting for your profit target to get reached,and the price is going in your favor (say you have a 1.5:1 reward),do you consider of moving yourstop,say to breakeven? I've tried this technique,and sometimes works,sometimes doesn't.Price can go to breakeven,or 1-2 ticks more,and then rockets to your target.....

Sorry,if I confuse you with all these....But,I really like your approach and I think that this is the only way to be profitable....
More...

Ahhhh Mr AA48...You have touched upon one of the greatest debates about my trading,

First, let me say this: I basically look for the same setup you are looking for but on a smaller time frame. I look for the trend on a daily chart (you, weekly) and then I turn to the intraday chart (you daily) to find entries to trade. My criteria to enter is similar as well, waiting for pullbacks, but not a break of a prior low..etc.

Now, for the debate.........MOVING the STOP.
Using your own quote "sometimes it works, sometimes doesn't"
When is the best time to move a stop?
When you are 1/2 way to tgt?
Over 1.5-1?
When you are within .10 of tgt?
I can see you have been in the same situation as I have been in. You move a stop to b/e...it stops you out, then turns right back up to the tgt.
Here is the ONLY rule I have in writing about moving stops:
If I am +1.00 from my entry point I move my stop to b/e.
Remember, this is for intraday trading, so being up over one dollar from an entry point SHOULD give enough room for the stock to get to tgt or stop out b/e.
As for my other trades.....If I'm going for a .30-.50 gain, once the stock is within .05 of tgt I move my stop to b/e.
.60-1.00 gain, once the stock is within .09 of tgt I move to b/e.
If you look at my results so far, I only have 14 trades stop out b/e. This should give a good idea how often I move my stops.
Once again, is this the perfect way to manage? Is there a perfect way to manage? Of course not, but it's what works for me and that'smy main concern.
This is a HUGE reason why I trade with only a $200 max loss per trade. If I trade with a bigger max loss I would be much more inclined to move my stops too quickly. The mind is a terrible thing
to use during trading....
Please feel free to continue on this subject -G
 
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