ES Journal Archive (2006 - 2008)
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Quote from romik:
I don't want to take this discussion elsewhere, but I believe this has to be mentioned. When you consider to open a business which would involve obtaining a long lease, asset purchasing, taking on board all sorts of liabilities, etc would you risk a substantial part of your capital not knowing eventual outcome? I just want a Yes or No answer
I had a business before, so I understand risks involved in running a staffed business from leased commercial premises. One that thinks that risks can be controlled in a regular business is mistaken. The hardest part is getting out of a lease. One can get stuck with spending lots of $ on assets (both tangible and intangible) and not recover the expense ever and God knows when lease will be re-assigned, if you are forced to close shop. So I know the risks involved in a conventional business, same risks are present in trading. Overall overheads are less though and it is possible to just stop at any moment, which is not so possible when running a business from leased premises. There are quite a few similarities as far as risk management is concerned. Another thing to add here is that people that would almost always end up bankrupt are the under capitalised ones, as they have no margin for error and can not withstand cyclical losses that are present throughout a lifespan of most businesses.
Well you know assumption is "Mother of most f.. ups", so if I was to take on board your principles of evaluating a person that you have never met in your life, then I would say that m4a1 is a castrated middle aged old git with no teeth & no hair. How is that? And I will be defensive, as you are not providing any hard core fact based info, you sole purpose seems to be to wind up people by misquoting them. And Even if you are not Porgie, then you must be his relative.
i see your point, but agree with other posters that to do it this way requires guts and capital, plus a strong belief in the method. i usually start small and add on, as long as i believe i'm on the right side of the trade. but if i have bet wrong, i cut my losses and don't enter again b/c at that point i don't trust my judgement. if after this i get a clearer picture, i re-enter. your way may work, but again seems pretty gutsy. i guess i'm just not that brave or experienced yet.
Romik and B1,
What are your positions on the ES right now? And what is your outlook on the S&P?
The reason I am asking is that I was going through my charts today and see a potential breakout that could be about to happen. On the ES a breakout of 45 I believe will resume the uptrend with quite a nice run ahead of it.
Gary
What are your positions on the ES right now? And what is your outlook on the S&P?
The reason I am asking is that I was going through my charts today and see a potential breakout that could be about to happen. On the ES a breakout of 45 I believe will resume the uptrend with quite a nice run ahead of it.
Gary
amen!
anyone who says running a business is less risky than stocks has to be well-backed AND a whole lot better at business risk assessment than at stock risk assessment. bottom line: risk is present in any business (including trading). the best business choice is one where you have an edge and can minimize risk while maximizing gain.
Hi Gary, I suppose going "by the book" you would be buying into strength upon break of weekly resistance. I would trade it either way now on tight stops by way of increasing position after every failure breakout or breakdown. I think B1S2 has seen this many more times than I have, so his opinion will be of more value than mine, though I think I already know his answer to this one (buying upon break of recent reaction high). One thing I understand now, even though I could afford to trade multiple lots at a time I would start with one now (or equivalent), have some whipsaws & still end up on the right side & with size.
I am certain that you require more guts when dedicating 2% of your TC to any 1 decision, all I am doing is spreading this 2% into multiple entries, in a way not keeping all eggs in one basket.
You stop, as you "don't trust your judgement" is exactly why system's stats fail. If you are using a method that after back-testing has provided you with positive expectancy, then you should never interfere with it. Next failure to take a trade may very well be an error of judgement as that 4th trade could in fact be the winning trade. When I had a restaurant I could have 3 consecutive weeks of break-even operation, but I knew that it was temporary and that I will make up for a temporary loss when business picks up & I knew that it would based on previous years performance. So I believe it is you P, that needs to be more gutsy.
Don't get me wrong, by no means this is a great method for 5 digit account daytraders, of course it is not, that would make it unsustainable due to lack of capital. But just consider this, IF you had $1m to manage (and that is not a huge amount, I was making almost that much on average every year when I had a restaurant) how unsafe would you say it would be starting with 1 contract & adding upon every losing trade?
EDIT: Why do you think casinos have 'ceiling' bets?
i'm gonna break this response down into the various paragraphs written, by paragraph:
1. no, like you said, and like i said, i start small and add on, as long as i am on the right side of the trade (or believe i am). i usually add on in equal amounts, though, instead of adding on in ever increasing amounts, as you do.
2. okay, there's two things wrong with your statement. one, i am not a believer in the whipsaw method, so believing in it won't help me, because i don't. two, there's a difference between gutsy and just plain stupid. like you said, it depends on the account size and, i would add, it also depends on the level of experience of the player. for me, trying to do something above my level of experience would not be gutsy, that would just be plain stupid.
a self-proclaimed newbie such as myself should risk little, play by the rules, and only use a system she believes in. someone more experienced, which i believe you are, and perhaps with more capital to risk, which i have no idea if you have, may be well-advised to use your whipsaw system. moreover, ALL traders are wrong sometimes. so it's not imprudent to recognize that when you lose, your judgement has been wrong, at least for that trade. step back, regroup, and decide rationally what to do next.
3. i agree. since i am newbie and therefore not willing to risk much, this method would most likely not work for me. i also believe that when you have more, it's easier to be gutsy. moreover, when you have more experience, more options are realistically and reasonably open to you. agree that this method would not be advisable for my capitalization and level of experience. this was my point in the first post.
Yes, it would be buying into strength but this time I am seeing a little more.
The trading channel that the market had been in before Christmas that started around 1330. I had it drawn a while back. Price has dropped out of that channel for several weeks now. It has tried to break back into the channel 2 times now. I have noticed that a lot of times that 3rd try seems to be a lot stronger than the previous times and usually works out. Now this is on a bigger picture (daily chart) than I used to do when I was scalping. 1444 would break resistance but 1445 would break back into the channel.
Just something to watch, good trading to you
Gary
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