Newbie getting killed

J

JimBob56

For you guys who actually make a living in the markets you have my total respect. Started trading in January and lost 28% of my stake. Manage to eake out a 2.5 % profit for March.

New strategy is smaller positions and keep my day job.

I'm not selling any stocks until they reach at least a 4% return or it blows through my 6.5% stops. I've been staying away from margin.

Do any of you pros have an opinion on MTG it's got a 6.7 multiple it going to show $1.71 earnings on next thursday. The CEO and some of the directors bought the stock at $61 it is currently $57

It looks to me (Home Building Contractor) that the stock could be selling at $67 with a stop set at $51.
 
JimBob, you may want to consider staying away from ANY financial stocks right now, regardless of the furious pumping about how 'cheap' it is.

It IS possible that some will make some money... but the flip side is the risk, and given how many incredible buy opportunities out there now, there's no reason to choose the 50/50's.

I think that housing and mortgages are not going to be healthy for years. The market is scary enough for someone starting out, don't pick among the lame horses to win a race with.

One thing about writers and articles... they don't make money by making you money. They make money by getting you to buy their books and read their articles. Once you've read it, you already paid for it.

Stick with HEALTHY businesses that show growth and an increasing bottom line (or bottom lines that will increase due to popular new products/drugs/concepts out or coming out), leave the dog picking and bottom fishing to the pro's and you can win more often they they do.

Good luck.
 
My account equity is less now than about two months ago. I am still very profitable compared to equity 12 months ago. I just keep following my method. Stop losses. Follow trends. I notice about once or twice a year stock prices decrease. I think it helps to trade long term.

I might strike out a few times <img src=http://images.tsn.ca/images/stories/20060415/pujols_60267.jpg \img> then hit a home run.
 
Quote from JimBob56:

Do any of you pros have an opinion on MTG it's got a 6.7 multiple it going to show $1.71 earnings on next thursday. The CEO and some of the directors bought the stock at $61 it is currently $57

It looks to me (Home Building Contractor) that the stock could be selling at $67 with a stop set at $51.
More...

I ran a trading simulation using a buy low sell high method. The method buys when MTG stock price is 15 % less than the highest price of the prior 200 trading days. Stock is sold if price rallys 15 %. Purchases are only made when price is greater than the value of the 200 day moving average (moving average acting as an upward trend filter). Risking $ 3000 per trade and assuming initial account equity of $ 100,000.

Results are profitable but a money market account might show greater returns:

Number of trades 14
Total profit $ 19852
Profit after subtracting $ 100 commission & slippage per trade: $ 18452
Cumulative Annual Growth Rate (CAGR) is 1.18 per cent.
Risk is $ 3000 per trade
Heat is 20 per cent
Retracement value is 15.00 per cent
Greatest drawdown is 0.0349

The greatest drawdown represents the greatest losing streak of 3.49 %.
 

Attachments

Trading MTG stock using a shorter term buy low sell high system shows increased slippage costs. Below are the results for a buy low sell high system that buys when price decreases 5 % less than the high price of the prior 20 daily sessions. System sells if price rallys 5 %.

Number of trades 66
Total profit $ 17422
Profit after subtracting $ 100 commission & slippage per trade: $ 10822
Risk is $ 3000 per trade
Heat is 20 per cent
Retracement value is 5.00 per cent
Drawdown is 0.0662

Profit is less than the longer term system and slippage cost is much greater due to the larger number of trades.
 

Attachments

Quote from Hook N. Sinker:

I ran a trading simulation using a buy low sell high method. The method buys when MTG stock price is 15 % less than the highest price of the prior 200 trading days. Stock is sold if price rallys 15 %. Purchases are only made when price is greater than the value of the 200 day moving average (moving average acting as an upward trend filter). Risking $ 3000 per trade and assuming initial account equity of $ 100,000.

Results are profitable but a money market account might show greater returns:

Number of trades 14
Total profit $ 19852
Profit after subtracting $ 100 commission & slippage per trade: $ 18452
Cumulative Annual Growth Rate (CAGR) is 1.18 per cent.
Risk is $ 3000 per trade
Heat is 20 per cent
Retracement value is 15.00 per cent
Greatest drawdown is 0.0349

The greatest drawdown represents the greatest losing streak of 3.49 %.
More...

Great work.

I was just hanging out, bored, getting ready to go get some breakfast, and I find this post.

Now that's the true strength of a site like Elite Trader.

Good trading,

Jimmy Jam

P.S. What happens when you run the test against a universe of stocks which have a positive relative strength vs. the S&P500 or (my personal favorite) the Dow?

That's a rhetorical question H N S.
 
Once again, the response from the memebers of this site is incredible. Thanks for the advice. This is why I keep coming back.
 
you are risking 6.5% to make 4% ? thats part of the reson you are getting hit. as a trader,there is no reson to let a loss get to 6.5% in the first place.my rule is simple,if a stock does'nt do what i think,i sell..no questions asked. don't get me wrong,i'll jump back in at the first sign of strength but jump out on the first sign of weakness. to be a good trader requires discipline and risk management is of the utmost importance. the 6.5% loss stradegy may work in a bull market but we are in a very choppy environment where stops get taken out very quickly so why risk 6.5%! that is swing trading and that can be very dangerous in this environment. work on a scalping method and perhaps have a separate account for swings or options.
 
Quote from JimBob56:


I'm not selling any stocks until they reach at least a 4% return or it blows through my 6.5% stops. I've been staying away from margin.
More...

Just want to clarify here, you aim for 4% upside but you have stops at 6.5%? What's your win %? I sure hope it's over 75%, otherwise you're losing money...unless I'm misintepreting it.
 
Quote from JimBob56:

For you guys who actually make a living in the markets you have my total respect. Started trading in January and lost 28% of my stake. Manage to eake out a 2.5 % profit for March.

New strategy is smaller positions and keep my day job.

I'm not selling any stocks until they reach at least a 4% return or it blows through my 6.5% stops. I've been staying away from margin.

Do any of you pros have an opinion on MTG it's got a 6.7 multiple it going to show $1.71 earnings on next thursday. The CEO and some of the directors bought the stock at $61 it is currently $57

It looks to me (Home Building Contractor) that the stock could be selling at $67 with a stop set at $51.
More...

Welcome to the jungle junior. Your lucky you made it this far.
 
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