Spydertrader's Jack Hershey Equities Journal II
- Thread starter Spydertrader
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Lucky you spyder... lost over $ 2000 today, way more than 1% of my total equity ... I have difficulties keeping tight stops... have to work on that.Quote from Price+Volume:
Everyone experiences losses while trading. Warren Buffet, George Soros and a host of other great traders experienced countless losses over the course of their careers. Everyone should consider taking a loss as part of the cost of doing business. Just as McDonalds Buys potatoes to make their french fries, so too must a trader spend money on losses now and then.
In order to insure against significant risk of ruin, make sure your total loss for all trades never exceeds a significant portion of your overall trading capital. By using position sizing and scaling into a trade (up to your maximum trade size based on risk comfort) a trader can avoid the temptation to 'hope' price returns to a more favorable trend. By planing for all contingencies before one enters a trade, one simple needs to execute the plan irrespective of price direction.
By example, I expected a price pullback with ASPV this morning and planned to add on shares at specific price levels in order to lower my overall trade basis. However, when price continued to head lower and approached my stop level, I stopped adding shares and proceeded to exit with small lot sizes in an effort to avoid 'moving the market' further against me. Prior to the morning open, I had drawn up my plan.
Had ASPV headed higher from the open, I had another plan for adding on shares (again at specific price points). Unfortunately, I never had an opportunity to execute this plan today.
What often separates the losing trader from the profitable one is the ability to execute their trading plan. Focus on sticking to your stops, and managing the losing trades by keeping those losses small. Once you accomplish that goal, you have half the battle already won.
Good Trading to you all.
- Spydertrader
Quote from Spydertrader:
Everyone experiences losses while trading. Warren Buffet, George Soros and a host of other great traders experienced countless losses over the course of their careers. Everyone should consider taking a loss as part of the cost of doing business. Just as McDonalds Buys potatoes to make their french fries, so too must a trader spend money on losses now and then.
In order to insure against significant risk of ruin, make sure your total loss for all trades never exceeds a significant portion of your overall trading capital. By using position sizing and scaling into a trade (up to your maximum trade size based on risk comfort) a trader can avoid the temptation to 'hope' price returns to a more favorable trend. By planing for all contingencies before one enters a trade, one simple needs to execute the plan irrespective of price direction.
By example, I expected a price pullback with ASPV this morning and planned to add on shares at specific price levels in order to lower my overall trade basis. However, when price continued to head lower and approached my stop level, I stopped adding shares and proceeded to exit with small lot sizes in an effort to avoid 'moving the market' further against me. Prior to the morning open, I had drawn up my plan.
Had ASPV headed higher from the open, I had another plan for adding on shares (again at specific price points). Unfortunately, I never had an opportunity to execute this plan today.
What often separates the losing trader from the profitable one is the ability to execute their trading plan. Focus on sticking to your stops, and managing the losing trades by keeping those losses small. Once you accomplish that goal, you have half the battle already won.
Good Trading to you all.
- Spydertrader
Thanks Spyder... very valuable advice. I have to work on keeping my stops... I'm limiting myself to a maximum risk of $ 200/trade from today until the month end. I'll re-evaluate at that time.
Excellent. Now adjust your position size accordingly, so you don't find yourself shaken out too early when setting your stops too tight. I attached a Risk Calculator in Journal One to assist in the position sizing process. Follow Jack's Stop Offset Method (as described in the video series) and then use the appropriate share size for the trade to limit your total loss to $200.00 USD should price hit the 'Stop Offset Line.'
I hope you found the above information helpful.
- Spydertrader
I am a neophyte trader that has been really impressed with all of this material.
1000 thanks to Spytrader and others who have really taken the time to genuinly help others. Reminds why the web is so cool.
As for Hershey methods...
I am quite impressed so far. I am up simulated trading about 8% in 7 trading days (13 trades, only one 2% loss). Haven't even had a real winner yet.
Admittedly, i am trading it a little more qualitatively and most positions have turned into day trades. I am very exact about stops and position sizes, but allow discretion on entry and exits.
If there is a better equities system out there (both logically and practically)... i haven't seen it.
Right on! Thanks to everyone...
john
1000 thanks to Spytrader and others who have really taken the time to genuinly help others. Reminds why the web is so cool.
As for Hershey methods...
I am quite impressed so far. I am up simulated trading about 8% in 7 trading days (13 trades, only one 2% loss). Haven't even had a real winner yet.
Admittedly, i am trading it a little more qualitatively and most positions have turned into day trades. I am very exact about stops and position sizes, but allow discretion on entry and exits.
If there is a better equities system out there (both logically and practically)... i haven't seen it.
Right on! Thanks to everyone...
john
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