Grinding it out, day after day

Hey Lescor,

Do you think that over the long haul RTM works better with highly liquid large cap stocks? You mentioned that you tend to trade low liquidity stocks, as they have inefficiencies to exploit. Although low liquidity small/mid cap stocks may have inefficiencies, I cannot help but to be reminded of John Keynes' quote: "The market can remain irrational longer than one can remain solvent". Oftentimes I would expect the market to revert after a big breakout or breakdown (i.e. 2 or 3 std dev); however, when that fails to occur is when I suffer my most painful losses. Logically, I'm thinking that the continuous run of a large cap stock is less likely than with a small cap stock. Although a small cap stock would probably give a better profit, as it would experience a more extreme reversal than a large cap, it seems that a large cap is a safer bet... And as experience has taught, capital preservation is CRITICAL!!

Any thoughts...

Walt
 
I think it can work equally well with all types of stocks. You might apply different parameters to different stocks, but the premise remains the same.

Oftentimes I would expect the market to revert after a big breakout or breakdown (i.e. 2 or 3 std dev); however, when that fails to occur is when I suffer my most painful losses.
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Welcome to the world of rtm trading.
 
Lescor, could you give some insight into your scaling in/out technique using as an example OSTK today (I presume, you was in the trade)?

What rule do you use to determine entry/exit points, do you scale in gradually, or in a progression, i.e. every entry point is twice as further than the previous one, etc?

When would you exit OSTK with a loss (if ever)?

Do you unload your position to the original intended size once stock reverts to the break even point? Thanks.
 
I have a chart with a bunch of lines. When the price hits a line, I buy or sell, when it hits another line, I add. When it comes back and starts hitting more lines, I cover. If it hits the wrong lines I say "oh crap" and take a loss. The lines are just numbers I pull out of my ass that historically seem like decent enough levels to place a bet.

Seriously, it isn't any more complicated than that. Sometimes people way overthink things.

Yes I was in OSTK today, but I was lucky. I was at the gym and when I got back and sat down it was just running up to the $17 level. I said "well look at that, it's at the 'oh crap' line and I haven't even taken any pain". So I shorted 1400 at about 17 and covered as it retraced. Made 700 bucks. Probably would have lost money if I'd come home half an hour earlier.
 
Quote from lescor:

I have a chart with a bunch of lines. When the price hits a line, I buy or sell, when it hits another line, I add. When it comes back and starts hitting more lines, I cover. If it hits the wrong lines I say "oh crap" and take a loss. The lines are just numbers I pull out of my ass that historically seem like decent enough levels to place a bet.

Seriously, it isn't any more complicated than that. Sometimes people way overthink things.

Yes I was in OSTK today, but I was lucky. I was at the gym and when I got back and sat down it was just running up to the $17 level. I said "well look at that, it's at the 'oh crap' line and I haven't even taken any pain". So I shorted 1400 at about 17 and covered as it retraced. Made 700 bucks. Probably would have lost money if I'd come home half an hour earlier.
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There you go folks, the secret to trading.

Lines that you pull out your butt. lol :p
 
Lescor

Trading from has the challenge of being alone. What have you found handy in setting up a trading environment to keep stimulated, in touch with other ideas, trader interaction...
 
+2,000 for the 4 day week, 246,000 shrs traded. Daily p/l was -1, -6, +9, 0

I'll try to give an update for the month and quarter, but I'm heading out of town during the long weekend.
 
March ended at +62k gross. 2M shares traded.
YTD is 215k gross, 6.7M shares
Net on the year is right about 200k.

The year has started out better than I'd hoped for. I'm most pleased about the consistency I've had thus far. No real bad hits, daily win rate in line with my historical average, but weekly win streak is the best I've ever had.

I'm guessing the declining vix and steady market has helped as there hasn't really been any big shocks to the system. I usually have my worst periods when there are big shifts in market sentiment due to some economic or political surprise. But I'm actually pretty surprised with how things have gone so far, not really sure why consistency has been so good. I'm sure there's a grenade out there somewhere that will land in my lap some day.

Here's a couple charts of the quarter. Again these are gross numbers.

<img src=http://www.elitetrader.com/vb/attachment.php?s=&postid=2790734>
 

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Quote from lescor:

I'm sure there's a grenade out there somewhere that will land in my lap some day.
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Or more likely, your consistency will just get better and better, and you'll continue to grow your returns without any grenades.

:cool:
 
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