I believe the form of an intraday trend on equities is not dissimilar in shape to that of daily, weekly or monthly trends.
That is, if you had a price chart and one didn't know the time scale, it would be difficult or maybe impossible to know what the time scale was.
I also believe that in order to make money in the market, one must (a) be in as much as possible as often as possible (b) have substantial money committed in the positions.
I also believe that there is quite a high degree of short term randomness, ie from one moment to the next we can not guarantee what will happen.
I also believe that in order to make money, it's not about predicting what will happen to direction, but about probabilities on direction.
I trade equities, long only, and at the moment hold 20 positions. My goal is 40 positions held simultaneously.
Each position I put on is about $2500, when I get to 40 positions and wish to continue to grow my account, then I'll increase my entry $ amount.
Forty positions mean that each position will be a position risk of about 2.5% of trading capital.
I take a long term view and eliminate any stocks which I could trade which don't meet certain criteria, that is I whittle the universe of stocks down to those which have the highest probabilities of performing, past performance becomes a probability for future performance.
This is not an exact science, there will be some which have not performed in the past which will perform in the future, however I discount those as it's like looking for a needle in a haystack imo.
Each entry position is carefully scrutinized to meet certain conditions prior, and exit is when the stock appears to be running on high volume.
I also use a trailing stop loss but it is based on monthly time frame.
When looking for contenders, I use T/A first and then use F/A for confirmation, ie possibly the P/E ratio and read the annual report for certain info.
Not all my positions are producers, I will buy into new growth stocks and explorers etc.
I don't trade gold stocks as I deem gold too much a speculative commodity.
If a certain sector has been running hard for some while, then I'll look to buy positions in an alternative sector.
Of all my positions held simultaneously some will and some won't perform.
The ones not performing I'm not too fussed about as all stocks take breathers and my performers should compensate.
Some may say "Hey, this guy's an investor, not a trader", well that's open to interpretation, the tax man views my business as trading and I don't care about dividends, I just care about not sitting in a chair day in day out watching a screen, read my first two lines.
I've been trading about 20 years and this is where I've evolved to, I use Amibroker and have designed numerous formulas.
Actually 55 stages so far, each stage is a different theme, each theme may have several different formula files.
Most have been relegated to the dustbin, but my latest and greatest is an exploration which finds high probability positions.
This took some months to formulate as designing something has a lot of trial and error going into it.
The bottom line is this, I'm attempting to explain holding long term is another way of doing things, it eliminates using excessive energy and paying for numerous brokerage and slippage.
Whether one trades short term or long term, it's all the same in terms of what a chart is, the percentage gain or loss is possibly similar, but this way it's easier to commit more money to the market (have it working)at any one time than short term trading in my opinion.
That is, if you had a price chart and one didn't know the time scale, it would be difficult or maybe impossible to know what the time scale was.
I also believe that in order to make money in the market, one must (a) be in as much as possible as often as possible (b) have substantial money committed in the positions.
I also believe that there is quite a high degree of short term randomness, ie from one moment to the next we can not guarantee what will happen.
I also believe that in order to make money, it's not about predicting what will happen to direction, but about probabilities on direction.
I trade equities, long only, and at the moment hold 20 positions. My goal is 40 positions held simultaneously.
Each position I put on is about $2500, when I get to 40 positions and wish to continue to grow my account, then I'll increase my entry $ amount.
Forty positions mean that each position will be a position risk of about 2.5% of trading capital.
I take a long term view and eliminate any stocks which I could trade which don't meet certain criteria, that is I whittle the universe of stocks down to those which have the highest probabilities of performing, past performance becomes a probability for future performance.
This is not an exact science, there will be some which have not performed in the past which will perform in the future, however I discount those as it's like looking for a needle in a haystack imo.
Each entry position is carefully scrutinized to meet certain conditions prior, and exit is when the stock appears to be running on high volume.
I also use a trailing stop loss but it is based on monthly time frame.
When looking for contenders, I use T/A first and then use F/A for confirmation, ie possibly the P/E ratio and read the annual report for certain info.
Not all my positions are producers, I will buy into new growth stocks and explorers etc.
I don't trade gold stocks as I deem gold too much a speculative commodity.
If a certain sector has been running hard for some while, then I'll look to buy positions in an alternative sector.
Of all my positions held simultaneously some will and some won't perform.
The ones not performing I'm not too fussed about as all stocks take breathers and my performers should compensate.
Some may say "Hey, this guy's an investor, not a trader", well that's open to interpretation, the tax man views my business as trading and I don't care about dividends, I just care about not sitting in a chair day in day out watching a screen, read my first two lines.
I've been trading about 20 years and this is where I've evolved to, I use Amibroker and have designed numerous formulas.
Actually 55 stages so far, each stage is a different theme, each theme may have several different formula files.
Most have been relegated to the dustbin, but my latest and greatest is an exploration which finds high probability positions.
This took some months to formulate as designing something has a lot of trial and error going into it.
The bottom line is this, I'm attempting to explain holding long term is another way of doing things, it eliminates using excessive energy and paying for numerous brokerage and slippage.
Whether one trades short term or long term, it's all the same in terms of what a chart is, the percentage gain or loss is possibly similar, but this way it's easier to commit more money to the market (have it working)at any one time than short term trading in my opinion.
