Andy's Day and Position Trading Journal
- Thread starter Jordan_Andy
- Start date
Wow, for a second there, I thought you had serious issues and were talking/addressing yourself in your posts...then realized you were answering previously posted questions 
Even if trading can drive you insane, I am just answering questions I get asked via email. This way I avoid to get asked over and over again the same stuff.
Happy trading,
Andy
Happy trading,
Andy
Question: "Andy, I have done some day trading and want to start with spread trading now. Can I use my online broker, or would you recommend my moving my account to another broker?"
Answer: While day trading depends mostly on speed and low commissions, spread or position trading has other needs. For spread or position trading, you want to be flexible. If possible, you want to be able to trade all kinds of markets with only one account, electronic and open outcry markets. Most online brokers allow only electronic markets.
Having a good broker can also help to save you a lot of money. You will enter into markets you probably have never before traded. He can get you the information you need before you place your first order. He can also support you whenever it comes to extreme market conditions like the one we had recently in the wheat. Can you imagine what would happen if you tried to enter or exit a wheat spread using two separate market orders in a limit up market? Well, I can tell you that could get very expensive. A good broker can even give you full assistance with your trades. This means that you advise him what to do before the market opens, and he will execute your orders and watch the market for you. Of course he will charge more commission for this extra service, but trading this way is emotionally much more comfortable, and you can save money by not needing real time or even delayed data.
All in all it depends on your situation. Do you want to execute all the trades on your own, or would you like your broker to take care of your entries and exits? Even if you continue placing your own trades, do you want to be able to call on a live human being when market conditions become extreme, or if there has been some error in your trade? My advice is to consider more than the commission. Only one tick difference in your fills and the âgood commissionâ is gone. Think about your needs, and then make your choice.
Answer: While day trading depends mostly on speed and low commissions, spread or position trading has other needs. For spread or position trading, you want to be flexible. If possible, you want to be able to trade all kinds of markets with only one account, electronic and open outcry markets. Most online brokers allow only electronic markets.
Having a good broker can also help to save you a lot of money. You will enter into markets you probably have never before traded. He can get you the information you need before you place your first order. He can also support you whenever it comes to extreme market conditions like the one we had recently in the wheat. Can you imagine what would happen if you tried to enter or exit a wheat spread using two separate market orders in a limit up market? Well, I can tell you that could get very expensive. A good broker can even give you full assistance with your trades. This means that you advise him what to do before the market opens, and he will execute your orders and watch the market for you. Of course he will charge more commission for this extra service, but trading this way is emotionally much more comfortable, and you can save money by not needing real time or even delayed data.
All in all it depends on your situation. Do you want to execute all the trades on your own, or would you like your broker to take care of your entries and exits? Even if you continue placing your own trades, do you want to be able to call on a live human being when market conditions become extreme, or if there has been some error in your trade? My advice is to consider more than the commission. Only one tick difference in your fills and the âgood commissionâ is gone. Think about your needs, and then make your choice.
Trade Management Matters
In spread or position trading, I am convinced that trading success comes from how you manage the trade rather then your entry strategy. This is the nature of long-term trading. As the time frame of our trades becomes longer, the importance of the entry becomes less.
Just look at the spread trades from Traders Notebook. Did the entry matter? In most cases it wouldnât have been important for the success of the trade if you had taken the entry on the breakout of the hook, at a low of a hook, at the breakout of last weekâs high, or any other entry strategy. Most trades have worked out just because of one simple fact: the spreads were moving in the right direction, and your initial stop didnât get hit! 
Look again at the successful spread trades of August. What else do you think was important? The only important thing was that you stayed in the successful spreads long enough! Please check â are you still in one of the trades? Did you get out of those spreads because you âthoughtâ it would be time to exit?
Of course, entry does also matter, but mainly in a different way. We need an entry strategy to control ourselves, to tell us when we should get into a trade without entering just by gut feelings (gut feelings may work for some, but for most traders they donât). The entry itself is mainly random in the sense that we just donât know what will happen the next few days.
Sometimes we are lucky to get in at the right moment, but most of the time we will do fine if we can catch a large part of the move independent of the precise entry or exit value.
My suggestion: Whenever you are having problems with your trading, check on your trade management. Check if you have precise entry and exit rules, and if your exit rules ensure that you get the most out of your winning trades!
In spread or position trading, I am convinced that trading success comes from how you manage the trade rather then your entry strategy. This is the nature of long-term trading. As the time frame of our trades becomes longer, the importance of the entry becomes less.
Just look at the spread trades from Traders Notebook. Did the entry matter? In most cases it wouldnât have been important for the success of the trade if you had taken the entry on the breakout of the hook, at a low of a hook, at the breakout of last weekâs high, or any other entry strategy. Most trades have worked out just because of one simple fact: the spreads were moving in the right direction, and your initial stop didnât get hit! 
Look again at the successful spread trades of August. What else do you think was important? The only important thing was that you stayed in the successful spreads long enough! Please check â are you still in one of the trades? Did you get out of those spreads because you âthoughtâ it would be time to exit?
Of course, entry does also matter, but mainly in a different way. We need an entry strategy to control ourselves, to tell us when we should get into a trade without entering just by gut feelings (gut feelings may work for some, but for most traders they donât). The entry itself is mainly random in the sense that we just donât know what will happen the next few days.
Sometimes we are lucky to get in at the right moment, but most of the time we will do fine if we can catch a large part of the move independent of the precise entry or exit value.
My suggestion: Whenever you are having problems with your trading, check on your trade management. Check if you have precise entry and exit rules, and if your exit rules ensure that you get the most out of your winning trades!
There wasn't much going on in this tread. I will try to get more active with some trade recommendations or other interesting stuff.
Happy trading,
Andy
Happy trading,
Andy
such as...
Sorry, too much to do. I don't find the time for any posts.
Andy
Andy