Day trading basics

[rajesheck]

I've been doing this for a long time. So my imagination is to be as conservative as possible, preserve capital and profit along the way. What is conservative to me maybe too risky for others.
As you should know, the depth of your pockets changes the game. For example, a trader with 50k account will trade different than trader with 500k account vs 5 million account. Apply the percentage, you may understand. Then again you may not due to your age and position in life. Think about risk management. Obvious this maybe outside of your sand box.

Your consistency of 1% to 5% ROI is your real asset, not your pocket depth. Seeing your consistency people will gradually invest with you. So pocket depth doesn't matter in any business. Many big companies today started small and attracted huge investment later stages.

You can surely reduce your risks and increase your profits by working on your strategy a bit differently, a little away from your regular thinking.

There are many styles of risk management. I am very comfortable with one built in inside my strategy itself. In my experience a well designed strategy needs minimal risk management.

In my strategy I have something called virtual stoploss. My entry price transforms into stoploss. I don't take any leverage and always trade with full size of my capital. These are characteristics of my principle based strategy.

 

[viruscore1]

Your consistency of 1% to 5% ROI is your real asset, not your pocket depth. Seeing your consistency people will gradually invest with you. So pocket depth doesn't matter in any business. Many big companies today started small and attracted huge investment later stages.
You can surely reduce your risks and increase your profits by working on your strategy a bit differently, a little away from your regular thinking.
There are many styles of risk management. I am very comfortable with one built in inside my strategy itself. In my experience a well designed strategy needs minimal risk management.
In my strategy I have something called virtual stoploss. My entry price transforms into stoploss. I don't take any leverage and always trade with full size of my capital. These are characteristics of my principle based strategy.

We trade our own capital. My strategy is self mitigating to a certain extent (impossible to catch all scenarios without affecting ROI, ah risk management), in play for many years, fully scalable, and transferable. In the process of usecase documentation and algo's for automation.
We're a bunch of semi-retired IT workers, looking for something to do. Among us, we have 100's of years of experience working at exchanges, clearing house, brokers, programming, systems design and analysis experience. Each of us with 500k at 2% per month ROI. Plus we have other sources of income, provides a comfortable retirement.

 

[rajesheck]

We trade our own capital. My strategy is self mitigating to a certain extent (impossible to catch all scenarios without affecting ROI, ah risk management), in play for many years, fully scalable, and transferable. In the process of usecase documentation and algo's for automation.
We're a bunch of semi-retired IT workers, looking for something to do. Among us, we have 100's of years of experience working at exchanges, clearing house, brokers, programming, systems design and analysis experience. Each of us with 500k at 2% per month ROI. Plus we have other sources of income, provides a comfortable retirement.

I started my career as a programmer, now a full time day trader after researching for 3 years.

Automation process needs lot of patience i guess. Best wishes.

 

[rajesheck]

https://www.elitetrader.com/et/thre...fundamental-analysis-for-your-trading.305423/

This poll result says that Elitetrader community depends more on technical analysis for trading than functional analysis.

From psychological perspective, fundamental analysis may have 50% influence on traders and other 50% of influence from market sentiments.

There is no tool to analyze market sentiments. Only the chart reflects the market sentiments precisely.

FA is investor's tool. TA is trader's tool. A trader using FA is like a person trying to learn swimming using his car driving skill.

 

[viruscore1]

https://www.elitetrader.com/et/thre...fundamental-analysis-for-your-trading.305423/

This poll result says that Elitetrader community depends more on technical analysis for trading than functional analysis.

From psychological perspective, fundamental analysis may have 50% influence on traders and other 50% of influence from market sentiments.

There is no tool to analyze market sentiments. Only the chart reflects the market sentiments precisely.

FA is investor's tool. TA is trader's tool. A trader using FA is like a person trying to learn swimming using his car driving skill.

i did that long ago. 1 loss and you give back a lot profit.

 

[DurElite]

I prefer to trade the other way round. Tight stop loss and big take profit. Then 1 win and I get loads of profit back!

 

[viruscore1]

I prefer to trade the other way round. Tight stop loss and big take profit. Then 1 win and I get loads of profit back!

loads ...

 

[rajesheck]

IMO, trading with FA as main tool may not give more than 10% RIO per month consistently.

Trading with TA is best combo. 10% is not a big deal at all hear.

However, consistency depends on the proper blending of strategy with risk management. If we can't make money using TA, we cannot blame TA.

 

[rajesheck]

I prefer to trade the other way round. Tight stop loss and big take profit. Then 1 win and I get loads of profit back!

For this kind of approach you must be having a unique style of strategy. I call it momentum trading strategy.

My principle based strategy is basically a momentum trading strategy. This strategy has a unique feature which i call virtual stop loss. Here the entry price behaves like stop loss because most of the times the price move forward after entry giving a breathing space or in other words converting entry price into stop loss.

I am really proud to post this strategy here in ET as a case study of a strategy developed based on business approach/principle.

 

[rajesheck]

Success Formula

We all know that the success formula is 1% inspiration and 99% perspiration.

95% of traders fail because they don't set the inspiration part properly.

And inspiration becomes active only when it transforms into an attitude.

Because quality of life is all about the quality of attitude.

Simple and straight forward !

Now how to properly set the inspiration and then transform it into attitude ?

Answer is simple : Affirmations.

Based on my own trading experience and as a practicing ontologist I suggest the following affirmations for traders to a successful endeavor.

1. I am a trading businessman.
2. Protecting and multiplying my capital is my business principle.
3. My strategy is strictly based on my business principle.
4. As a trading businessman I find abundance of trading opportunities.
5. I cannot control results.
6. I can only control my attitude.
7. My attitude defines my success.

Traders have to write this set of affirmations 10 to 20 times every day until they become successful traders.

Why write them until becoming successful traders ?

Simply because the proof of right attitude is RESULT !

This is my New Year gift to ET community. Wishing you all a successful New Year.