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

colinpip


Registered: Mar 2009
Posts: 4


05-08-09 04:13 AM



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.Do you wait for the "higher low" bar to complete and then you buy the violation of its high,or you buy the violation of next's bar high when it is also completed?

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Quote from geez:

You nailed it....exactly.
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Wait, which one?
......................................................................................................

Sorry if there was confusion....
Ok here is what I was looking for on the DXD trade:
The DIA finally had an open that looked like we might get a decent selloff. We are somewhat extended on the daily charts and anytime I see a gap up after a multiday run up I am looking to get short....take advantage of other people's profit taking. The DIA makes a strong move down right out of the gate. I'm looking to short ANY rally on the 5 min chart of DIA as long as that rally doesn't go past (higher) than any prior pivot highs(showing strength again). So, as soon as DIA sets up ANY lower high I am looking to short. Since DXD is the INVERSE of DIA I am looking to buy ANY higher low it makes.
The 9:50 5 min bar slows DXD down. I watch for ANY pullback to buy this. The 9:55 bar has just a small amount of selling, I start to recognize one of the patterns I look for..........
I look to get into DXD long as soon as it crosses the high of the 9:55 bar(48.86) and IF IT DOES I will set the stop below the pivot low it has just made (48.64). As soon as I see a 48.87 on the Bid I put my order in. I put a .03 limit spread on my entries so I don't get filled too far away from my ideal entry price. I only use this for high volume stocks and ETF's (like DXD). Sometimes you get filled at 48.88, sometimes you get filled lower (like I did at 48.86). The pivot low is 48.64 and I want to put my stop BELOW that , so my stop will be 48.61. I look at this FIRST before putting the buy in. If I got filled at 48.87, my stop would have been 48.62 to keep the stop .25 from my entry, as long as the stop is below the 48.64 pivot. My target of 49.36 looks very attainable because there is a pivot low from the prior day at 49.35 (at 12:20).
One caveat about this trade: Because of the indexes being extended AND the gap up I was looking to get into shorts aggressively. I would not take this trade if it was the 4th day of selling on the indexes. You need to have a plan of when to be aggressive and when to be patient.
Hope this helps explain the DXD trade. -G
 
Quote from AA48:

Hello geez,

let me ask you something on the money management issue.You've had an initial capital of 70k and you want to achieve a 50% profit,that is 35k with a minimum drawdown.You also bet 200$ on each trade,with a profit target of 400.Excellent...

Do you believe that it would be possible to achieve the same results with less capital? I mean,following the same strategy,if you've had 10k could you produce 5k profit? what would your bet on each trade be then?

Thank you...I'll watch your trades closely today.Good luck!
More...
 
Quote from AA48:

Hello geez,

let me ask you something on the money management issue.You've had an initial capital of 70k and you want to achieve a 50% profit,that is 35k with a minimum drawdown.You also bet 200$ on each trade,with a profit target of 400.Excellent...

Do you believe that it would be possible to achieve the same results with less capital? I mean,following the same strategy,if you've had 10k could you produce 5k profit? what would your bet on each trade be then?

Thank you...I'll watch your trades closely today.Good luck!
More...

I think it is possible , yes.......
My main thing is keeping drawdowns to a very low minimum. If I lose 5 trades in a row, that is only 1,000 taken from an account that is over 85,000.
If I were trading a 10k account and lost 1k from it on 5 trades that may affect me emotionally. The main thing for me is keeping emotion out of my trading. If I traded a 10k account I would put my max loss per trade at $40...maybe $50, looking for $80 or $100 reward each trade.
 
Quote from geez:

I think it is possible , yes.......
My main thing is keeping drawdowns to a very low minimum. If I lose 5 trades in a row, that is only 1,000 taken from an account that is over 85,000.
If I were trading a 10k account and lost 1k from it on 5 trades that may affect me emotionally. The main thing for me is keeping emotion out of my trading. If I traded a 10k account I would put my max loss per trade at $40...maybe $50, looking for $80 or $100 reward each trade.
More...


Hello geez

thank you very much for detailed explanations. one doubt in my mind is commissions. when you are risking $40 or $50 you also have to include commissions to this loss. and when target is $80 or $100 commissions comes into action again. do you risk $50 including commissions and set target of $100 after paying commissions?


Mephistophilis
 
Quote from sudhaker:

In my opinion, the real strength of Geez's system is the superior entry. And I want to learn it all ;-)

- Su
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My opinion is absolute opposite. His exit strategy (stop/target) is the core of his success. Nobody makes or loses money at entry.
 
Quote from Mephistophilis:

Hello geez

thank you very much for detailed explanations. one doubt in my mind is commissions. when you are risking $40 or $50 you also have to include commissions to this loss. and when target is $80 or $100 commissions comes into action again. do you risk $50 including commissions and set target of $100 after paying commissions?


Mephistophilis
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Each person's commission rate is different. But, I was talking about BEFORE commission, yes.
 
5/8/09:

I would like to see some more selling in the indexes, but I have alot of stocks that are setting up for longs off the daily chart. May make it an interesting day today.
Long watch: AAPL STX AKAM CMCSA CTSH HANS WYNN

Short watch: PDCO PRU UNH

With the gap up, I will probably key on the short list early on.
 
Quote from geez:

Of course sudhaker,
Just give me a little more detail what you are looking for. Do you mean why I pick a certain price? Or why I am actually picking the certain stock? Or why long or short?.......Just let me know.
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Would be great if you can touch everything i.e. time, price, stop limit and direction (long/short).
 
Quote from geez:

I think it is possible , yes.......
My main thing is keeping drawdowns to a very low minimum. If I lose 5 trades in a row, that is only 1,000 taken from an account that is over 85,000.
If I were trading a 10k account and lost 1k from it on 5 trades that may affect me emotionally. The main thing for me is keeping emotion out of my trading. If I traded a 10k account I would put my max loss per trade at $40...maybe $50, looking for $80 or $100 reward each trade.
More...

If you are in USA, you need a minimum of 30K capital for this strategy. This is to avoid the stupid PDT restriction (patter day trader).

My current setup is 30K with IB where my round trip commission is as low as $2. My account got activated early this week and short term plan is to stick for max draw down of $40-50 :-)

So far I had 6 trades, 5 loss, 1 win, total loss $220, total win $120, net -$100 ; At least 3 out of those 5 losses were plain stupid mistake (i.e. entry based on 1 min chart only). Anyway, everyday is a learning :-)

Thanks,
 
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