Scalping and Analysing your trades
- Thread starter douwe
- Start date
Hi H2O... I got your PM. Will respond shortly.
As far as your questions here:
1. Trader's Edge is
((Avg Winner * % Win) - (Avg Loser * % Loss)). It gives a clearer picture of the magnitude of the trader's performance. For example, you might have 82% winning percentage. But if you are taking 1 tick on 82% but losing 10 ticks on losers, then you don't have an edge.
2. Reward/Risk is calculated using the Avg Winner/Avg Loser.
Accumulative winner is the sum of all winning trades in pts as you said.
10 longest/shortest held wins tell me the number of trades with the 10 top longest holding times are winners versus losers and 10 top shortest holding times were winners vs. losers. So I take the top 10 longest held trades and I want to see that they are all winners. The 10 shortest held trades should show 0 winners (in other words, all losers). I don't have it for the losers because I can assume that if the five longest held trades are winners then 5 were losers or scratches.
I'm not sure i know exactly what you mean, but when i look for trades that i can get a lot of shares into, i first look to see where my failure exit is if it were to go wrong - that exit is usually the cent below (i.e. get in in front of a wall).
As for time in trades, it's not a serious concern of mine. If i lose two cents - it's a bad trade, i've learned quite well i'd say to cut my losses and get on with it. I'd rather make a number of good trades instead of wasting that time waiting on my failure to come back for me.
Do you have a daily down limit? If so, do you trade as you were until that limit is hit or do you modify the way you trade to distance yourself from it? That's really where the concern lies since your analysis is providing the details you need for your own style.
You would benefit from a written plan of handling losses. This is where most people who have made the turn and who understand their performance will fall short. Figure out what you will do to be able to continue trading without having to hit that daily limit. Just remember that a trader's worst enemy is time and longevity. If you can temper your trading when you are red, then you can survive long enough for conditions to change or to finally catch an even flow with the market without actually ceasing to trade. Good luck.
What would be entailed in a written plan for handling losses. I don't write it down, but my plan is not not loose more than 0.02 on any trade, and i'm pretty good with sticking to it.
One thing i do wrestle with is that i should cut back my shares per trade when i'm down, but find i can't fight back, so what i usually do is up my average shares and make fewer trades.
What am i missing?
One thing i do wrestle with is that i should cut back my shares per trade when i'm down, but find i can't fight back, so what i usually do is up my average shares and make fewer trades.
What am i missing?
I don't get shaken out a lot, and 0.02 i consider a big loser. I'm really only picking pennies 7/10 times so it only makes sense that with a planned trade with only a 0.01 - 0.02 return the stop loss should be equally small (ideally smaller). In the topic of shaken out, the loss isn't a hard and fast rule, but if i get in front of a wall (long) and the wall gets hit and breaks then it makes sense that i get out if the impetus behind entering the trade was that i had the wall to back me up. I'd hate to say that the 0.02 is hard and fast because reading the prints, the lvl 2 and looking at chart support/resistence will give me a better indication of how wrong i was.
I think it's a pretty safe proposition. I can make about 100 round trips a day, focussed on each trade at time, quick easy cents.
As for what stocks - GLW, MOT, TWX, EMC, AMAT, AMD, TXN - those i will only really tolerate a 0.01 loser, on PFE, HPQ i'll let it go for 0.02 since there is greater opportunity for larger gross.
I think it's a pretty safe proposition. I can make about 100 round trips a day, focussed on each trade at time, quick easy cents.
As for what stocks - GLW, MOT, TWX, EMC, AMAT, AMD, TXN - those i will only really tolerate a 0.01 loser, on PFE, HPQ i'll let it go for 0.02 since there is greater opportunity for larger gross.
omniscient
Guest
remember, this thread is dedicated to scalping. two to five cents in either direction can be very hefty, especially as the day moves along.
if you are trading 50,000 shares that $.02 stop equates to a $1,000 loss. have ten of those in a day and you will be down $10k.
of course, i don't know what kind of volume asinine trades, so i will let him elaborate if he wishes.
hth
take care -
omni