"Low maintenance" position trading
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I believe it was Ed Seykota, a trend follower who was also a systems trader. Depending on your system, you can be in trade for n period of time. This is likely more profitable as commissions are lower and there is less coin flipping. I guess buy and hold is a system where you have no defined exit points, which makes it painful to be extremely wrong as you have no uncle point. Mom and Pop are position traders by default. I would imagine the best traders lose small and win big. I think buy and hold can be an ok strategy if you have a good product, but I have learned the hard way not to trade without stops as my capital is finite.
Quite a few CTA's agree with and follow procedure (B). However, today, in 2006, very few follow procedure (A) since it rules out trading global markets. N.America futures markets begin to open at 0700 Chicago time; Asian futures markets begin to open at 1630; and Western European markets begin to open at 0130.
Today's globally diversified CTA probably "looks at the markets" (i.e. downloads the price data electronically) at least two times a day: at 0945 Chicago time (after Asia closes), and again at 1845 Chicago time (after Europe and North America close). If the CTA also trades spot Forex in addition to futures, probably a third time, to capture the NYC 4PM close.
Do some internet searching for "Barclays Systematic Trader Index" to get a feeling for the magnitude of 100% systems driven CTAs out there in the real world. It's significantly greater than zero.
I am no "market wizard" by any stretch of the imagination, but it is possible to make money with systems which buy/sell at the open. My trades last 2 to 5 days and I prepare and place my trades in the evening for the day after (Good till cancaelled). I trade 2 systems like this, with a total capital of $230,000. System 1 is up 38% YTD. System 2 is up 21%.
I leave those systems alone the all day. When I do not, I have a tendency to take my profits too early. I left about 6% of profit on system 1 because of this.
So it is definitely possible and probably better not to look at the screen for this type of systems. And they are not buy and hold trades, only 2 to 5 days.
I leave those systems alone the all day. When I do not, I have a tendency to take my profits too early. I left about 6% of profit on system 1 because of this.
So it is definitely possible and probably better not to look at the screen for this type of systems. And they are not buy and hold trades, only 2 to 5 days.
i used to and still do trade weekly and fortnightly charts.
I personally take this approach also.
I spend 1 hour each morning monitoring my positions and setting up my trades for the day.
If you know what you're doing, you can make good regular returns without staring at a screen all day long.
Thanks
Damian
yup. weekly charts are the most beautiful way to trade, 2hrs on the weekends in peace setting up next week's positions and then finished.
btw it takes balls to trade weeklies, stops need to be furthur away, streaks of 4-5 bad trades result in large ddowns.
like everything in the market, advantages come at a price.
btw it takes balls to trade weeklies, stops need to be furthur away, streaks of 4-5 bad trades result in large ddowns.
like everything in the market, advantages come at a price.
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.
Thanks
Damian
U.S. Share Trader