"Low maintenance" position trading

[Hook N. Sinker]

I trade long term. I might check prices once a day. Usually I check prices when the market is closed.

It is possible to enter orders as stop or limit orders. Trading is automatic with stop or limit orders. I can go walk the beach instead of watching prices. I remember Nicholas Darvas wrote a book based on trading outside market hours using stop orders. I recall the name of the book as "How I Made 2 Million Dollars In The Stock Market".

 

[damianoakley]

Now that I am clear on the rules, this will not happen again.

Getting back to the tread, I am personally a big fan of "low maintenance trading". I think that many people get into day-trading because of their desire for action, when in fact it is perfectly possible to make a good income by checking the markets once or twice a day.


Thanks

Damian
U.S. Share Trader

 

[candletrader]

I make a good living, working 5-10 hours a week... I used to be an all-day screen trader, but I grew out of it...

I only trade for an hour or two a day, putting on, taking off and maintaining positions in the last couple of hours each day... I hold for up to a few weeks...

 

[aus_SPIder]

Quote from damianoakley:

Hi,

Wider stops don't have to mean more risk if you position-size correctly.

If you sized your positions right, then 4 or 5 bad trades shouldn't mean any bigger drawdown than someone trading on a smaller timescale.

Position sizing has to be one of the most mis-understood aspects of trading in my opinion. So many of my clients are able to completely turn their trading around by just understanding this area of trading and little else.


Thanks

Damian
U.S. Share Trader

effective position sizing depends very much on initial account size. Bigger size, more ways to reduce ddown. common method is to take ATR/equity. but if equity is small then really the benefits of position sizing arnt that great.

My account is relatively small so position sizing plays second fiddle to trading uncorrelated markets. at my account size trading 3-4 markets that have mid-low correlations smoothes out the equity curve much mroe than using a position sizing algorithm. As the account gets bigger then it is something that will need to be taken into account.

Because my system requires me to be in the market for a period of time usually exceeding 3 weeks my stops are very far away. For SP500 they are in the vicinity of 30-40pts.

I therefore do not use stops adn simply buy deep OTM options to cover the ass if it gets flogged. I find this an much more effective method, due to teh fact that i can sleep tight in australia knowing full well that if SP crashes, put options will offset any major loss in my long positions.

It also means that i can "hold onto a loser" as long as the option has TV making it easier psychologically for me to stay in teh market during period of high volatility.

 

[agpilot]

Quote from Hook N. Sinker:

---> I remember Nicholas Darvas wrote a book based on trading outside market hours using stop orders. I recall the name of the book as "How I Made 2 Million Dollars In The Stock Market".

---------------

To a529612:
I read that Darvas book years ago and if I remember correctly, Darvas had his broker wire him only basic info about certain stocks rather then general market info. He did well while on World tours and away from general market news. Later, when he went to Wall street and got caught up in daily news and general market hype, he lost big time. Well worth considering for sure and I've tried to use this method. ( I don't post often either)
... agpilot

 

[CPTrader]

Quote from aus_SPIder:

i used to and still do trade weekly and fortnightly charts.

How do you get access to forthnightly charts. I've always had an interest in this but have not found a quote/chart provider that generates fortnightly charts.

 

[ACM Trader]

Quote from damianoakley:

Now that I am clear on the rules, this will not happen again.

Getting back to the tread, I am personally a big fan of "low maintenance trading". I think that many people get into day-trading because of their desire for action, when in fact it is perfectly possible to make a good income by checking the markets once or twice a day.


Thanks

Damian
U.S. Share Trader

Yes I do think that many traders have the psychology of the gambler at the casino. They like the excitement of day trades. This is in this area that I think there are a lot of failures. Day-trading GOOG must be fun, not sure profitable for many.

 

[princessa]

Quote from damianoakley:

I am personally a big fan of "low maintenance trading". I think that many people get into day-trading because of their desire for action, when in fact it is perfectly possible to make a good income by checking the markets once or twice a day.

other than trading futures, which imho are best traded intraday, i agree with damian.

and, for those times when you do crave the action, futures can be fun and profitable.

this basically defines my style: some investing, more swing trading, and a dabble of futures for fun, profit, and learning.

overall, i would agree with others who do homework and set ups after hours. my twist is that i add a dash of futures and/or scalping for fun and profit IF i have the time and inclination to do it during the day.

 

[aus_SPIder]

Quote from CPTrader:

How do you get access to forthnightly charts. I've always had an interest in this but have not found a quote/chart provider that generates fortnightly charts.

i combine 2 weekly charts

 

[CPTrader]

Quote from aus_SPIder:

i combine 2 weekly charts

Thanks. Interesting approach. I thought of that, but rejected it because it wasn't too "clean".

I'm curious - who's your quote/data provider?

Thanks again!