Riding your winners and number of positions
- Thread starter LelandC
- Start date
No books...you can see articles in Stocks and Commodities (not really about techniques). We have a 5 day course for traders in Las Vegas where we cover current strategies.
Well worth it, especially if you have not seen these sorts of things before. They are constantly adapting to the market, and their creativity in adapting their core strategies is very refreshing. In spite of what people say here, the Bright brothers don't "think they know everything." When I was at their class, they openly admitted to learning from traders that traded with them. They then added their 30+ of experience and made that strategy even better.
nitro
Leland,
Your questions are not unusual. Deciding on the optimum time to sell off your 'good trades' can make the difference between mediocre profits and truly successful trading. I commend you for getting half-way there by knowing when to cut your losers quickly... something that many traders are still trying to master. The only way to really know whether you would have made greater profits had you stayed in the market till the end of the day, is to test your theory. With TradeStation 6 you could basically do this by applying the strategy you are currently using, but changing your exit point to the end of the day. In a matter of seconds you will know if you would have been more profitable by holding out till the end of the day, or if the $.50 or $1.00 target point you are currently using was your best bet. You can also have TradeStation 6 look for the optimal point to get you out of those trades with the 'optimization' feature. (You could scan for example for all exit points between the $.50 profit range and the close of the day). One of my favorite phrases is: 'The only way to legitimately judge anything is by results'. Being able to test what type of results you would have had, had you done it differently, is an extremely powerful tool!
In reference to following multiple positions, having the right tools will let your computer monitor your positions for you. TradeStation6 truly excels in this area. You can basically have it monitor your charts for you, and alert you when the conditions you are looking for to get in our out of a trade occur. This way, while you are busy 'focusing on one position', when one of your other positions hit an entry or exit point, you will be audibly alerted and a 'pop-up' window will designate which position has met your criteria. You can either select for TradeStation 6 to automatically place your trades when your conditions are hit, or, (if you would rather have the final say-so), you can choose to be alerted and hit the 'execute trade' button on the alert box to execute the trade. Of course, the benefit to this would be that you wouldn't have to limit yourself to one position on days that are actively trading, and you would therefore be able to take advantage of those other trading opportunities.
Your questions are not unusual. Deciding on the optimum time to sell off your 'good trades' can make the difference between mediocre profits and truly successful trading. I commend you for getting half-way there by knowing when to cut your losers quickly... something that many traders are still trying to master. The only way to really know whether you would have made greater profits had you stayed in the market till the end of the day, is to test your theory. With TradeStation 6 you could basically do this by applying the strategy you are currently using, but changing your exit point to the end of the day. In a matter of seconds you will know if you would have been more profitable by holding out till the end of the day, or if the $.50 or $1.00 target point you are currently using was your best bet. You can also have TradeStation 6 look for the optimal point to get you out of those trades with the 'optimization' feature. (You could scan for example for all exit points between the $.50 profit range and the close of the day). One of my favorite phrases is: 'The only way to legitimately judge anything is by results'. Being able to test what type of results you would have had, had you done it differently, is an extremely powerful tool!
In reference to following multiple positions, having the right tools will let your computer monitor your positions for you. TradeStation6 truly excels in this area. You can basically have it monitor your charts for you, and alert you when the conditions you are looking for to get in our out of a trade occur. This way, while you are busy 'focusing on one position', when one of your other positions hit an entry or exit point, you will be audibly alerted and a 'pop-up' window will designate which position has met your criteria. You can either select for TradeStation 6 to automatically place your trades when your conditions are hit, or, (if you would rather have the final say-so), you can choose to be alerted and hit the 'execute trade' button on the alert box to execute the trade. Of course, the benefit to this would be that you wouldn't have to limit yourself to one position on days that are actively trading, and you would therefore be able to take advantage of those other trading opportunities.
Rafycur,
In reference to 'fake bids and asks', Market -makers and Institutions have had 'Advanced Orders' available to them for years to 'fake' the market. In reference to thinly traded stocks, a 'Show Only' is frequently used. Say a stock normally trades 30,000 shares a day, and a market-maker or Institution decides, (for whatever reason), that they want to buy or sell 10,000 shares of said stock. Putting that bid or ask out there for the world to see is going to raise a few eyebrows...not to mention, it would probably make that market pull away from them. Using the 'Show Only' allows them to put in their 10,000 share bid or ask, but 'show only' 100 shares. (Or any number of shares they choose to show). As far as the rest of the trading world is concerned, they only see a bid/ask for 100 shares. If someone on the opposite side of the that trade decided to throw out a bid/ask for 1,000 shares at the correct price, he would get filled for all thousand shares, even though all he saw was a bid/ask for 100 shares. Of course the benefit to you would be, you could quietly or inconspicuously buy or sell a thinly traded stock and hide your true intentions as to how many shares you truly want to buy or sell. (This is a pretty powerful tool if you trade thinly-traded stocks!) This type of advanced order is available to TradeStation Securities brokerage customers through the TradeStation6 platform. We also have Discretionary and Peg Advanced Orders available, which are constantly used by Institutions and market-makers. You know the old phrase: 'A carpenter is only as good as his tools'. Having some of the same tools used by the pro's can really give you that edge you're looking for. (If anyone would like to know how the Discretionary and Peg orders work, and how market-makers and Institutions are using these, feel free to ask!)
In reference to 'fake bids and asks', Market -makers and Institutions have had 'Advanced Orders' available to them for years to 'fake' the market. In reference to thinly traded stocks, a 'Show Only' is frequently used. Say a stock normally trades 30,000 shares a day, and a market-maker or Institution decides, (for whatever reason), that they want to buy or sell 10,000 shares of said stock. Putting that bid or ask out there for the world to see is going to raise a few eyebrows...not to mention, it would probably make that market pull away from them. Using the 'Show Only' allows them to put in their 10,000 share bid or ask, but 'show only' 100 shares. (Or any number of shares they choose to show). As far as the rest of the trading world is concerned, they only see a bid/ask for 100 shares. If someone on the opposite side of the that trade decided to throw out a bid/ask for 1,000 shares at the correct price, he would get filled for all thousand shares, even though all he saw was a bid/ask for 100 shares. Of course the benefit to you would be, you could quietly or inconspicuously buy or sell a thinly traded stock and hide your true intentions as to how many shares you truly want to buy or sell. (This is a pretty powerful tool if you trade thinly-traded stocks!) This type of advanced order is available to TradeStation Securities brokerage customers through the TradeStation6 platform. We also have Discretionary and Peg Advanced Orders available, which are constantly used by Institutions and market-makers. You know the old phrase: 'A carpenter is only as good as his tools'. Having some of the same tools used by the pro's can really give you that edge you're looking for. (If anyone would like to know how the Discretionary and Peg orders work, and how market-makers and Institutions are using these, feel free to ask!)
Doreen,
The capabilities you mentioned, monitoring positions and alerting you at the right time - and conditional/hidden orders, are also available from Realtick and related brokers and their execution addendums.
TS6 is a good product but not unique in this respect. Of course you can build your own trading strategies with it, and/or buy a gazillion of them out there, but that's a different matter.
No doubt TS6 is a powerful platform, but with the organization going back and forth between product development and brokerage, and with all the confusion that this duality entails, I decided to stick with Realtick and IB until things get a bit clearer. Perhaps I'm still smarting from the fact that my band new TS 2000i was pushed to artificial obsolecence prematurely.
Oh well...
The capabilities you mentioned, monitoring positions and alerting you at the right time - and conditional/hidden orders, are also available from Realtick and related brokers and their execution addendums.
TS6 is a good product but not unique in this respect. Of course you can build your own trading strategies with it, and/or buy a gazillion of them out there, but that's a different matter.
No doubt TS6 is a powerful platform, but with the organization going back and forth between product development and brokerage, and with all the confusion that this duality entails, I decided to stick with Realtick and IB until things get a bit clearer. Perhaps I'm still smarting from the fact that my band new TS 2000i was pushed to artificial obsolecence prematurely.
Oh well...