Spydertrader's Jack Hershey Equities Trading Journal III

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Quote from chiefraven:

Hey spyder, i understand you try not to risk more than 2% of your total account size in any single trade....
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In the beginning, you are bound to make errors in judgement. Not following the instructions, allowing fear or greed to influence your decisions or simply flat out forgetting to take an action are but several examples of what every trader experiences during the initial learning curve - irrespective of method used. As a result, I recommend limiting your losses by only using a small percentage of risk. As you improve with the methods, you will no longer worry about risk / reward ratios. These are only my recommendations in an effort to keep people from risking too much too soon. Remember, you have more buying power on margin, but the actual losses come from your real cash. When you feel its time to scale up, you will know. Just make sure it isn't influenced by greed.

- Spydertrader
 
oh i totally understand about the risk and i am planning to tread with caution... risking only 2% of my total 40,000 capital is ok to me, since it's only 800 bucks of my total capital. and i will make this 800 bucks as the max of what i lose in a single trade.

but my question is, if i was to use this 2% risk for every trade.... given the fact that with margin, i'm able to buy at about 4 stocks at one time.... mbtrading will not allow this simply because eventhough i have a certain amount of margin power, i am still only able to have $98,000 invested in stocks at a single time since that is roughly my overnight buying power.

which is what brought up this question since i would very much like to use this 2% risk as my stop, and would like to divide up my capital into 4 streams, where i can have about 4 stocks at any given time, it seems with the overnight buying power limit, i'm still very much limited
 
Quote from chiefraven:

which is what brought up this question since i would very much like to use this 2% risk as my stop, and would like to divide up my capital into 4 streams, where i can have about 4 stocks at any given time, it seems with the overnight buying power limit, i'm still very much limited
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Divide your capital into four streams. Use one stream for each stock you want to purchase. Still use the 2% stop if you desire, but set risk to one half percent (.005). In this fashion, if all four stocks tank, your account will still only be down 2%.

Hope that helped clarify.

- Spydertrader
 
yeah i've definetly thought about that too... i guess i was just greedy 'cuz i wanted to maximize profits and thought by allocating shares into 4 streams where each only has a 0.5% risk of total capital is too conservative.... hehe i'm too greedy..

i might set each one to 1 percent..

anyway, thanks spyder.
 
this is what i've decided to go with:

Initial Capital: $40,000

Money Streams: 4

each stream: $20,000 or $15,000 min:$60,000 to max: $80,000 total in equity

(20,000 - 40,000 margin debt) well within overnight power

for each stream, only risk 2% of each stream money

if all 4 reached 2% loss, then the account only suffers $1,200 = 3% of total equity (min)
$1,600 = 4% of total equity (max)
initial stop loss set at 2%, then trailing stops at 5%
 
Ok, so I'm going to start following this thread a little more closely after today's disaster. I've checked in infrequently and can see the lesson being taught here by Jack through Spyder - teach a man to fish.

I've been doing kind of the same thing, but on a longer time frame, (weekly) so my filter settings were a little different.

I currently use TC 2007 rather than stocktables as my filter, and have reset them to fit the daily time frame as follows:

Price - 10-50
RS rank (vs SP-500) 80+
EPS rank (%change last quarter) 80+
Volume - 200,000 avg +
Earnings - positive
Float - 5-60 million
Insider owned - 25%+
Inst owned - 25% +

to get this list : CNS CRVL DRQ HITT TTEC TZOO VDSI VOL

Sound about right?

Qcharts for my daily charts, etc. IB is my broker.

My other motivation is that I found out recently that my workplace may soon be sold, so I may need to have an "alternete source of income".

Let the games begin. We'll see what I can contribute..
 
Quote from Haroki:

...
My other motivation is that I found out recently that my workplace may soon be sold, so I may need to have an "alternete source of income".

Let the games begin. We'll see what I can contribute..
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I don't know your details, but please be cautious. The above sounds like a recipe for disaster.
 
One good thing about today, 27 February 2007, with the DOW down 416.02, we get to see for real what our stocks do under these conditions.

I don't know about anyone else, but after watching the bonds, and seeing what the S&P futures were doing pre-market, I elected to go to sleep rather than buy (or sell) stocks.
 
I had my system running all night and as you would expect, no trades were entered....

Shorts would've done very well I imagine.

The single trade I placed today emphasises the importance of sticking to a system

I had a single and entered a trade in DTLK on Monday. The stock 'just' failed to reach FRV, so I debated leaving the trade on, or closing it out on the next open (as my rules required).

I stuck to my guns and entered an 'OPG' market sell order. I was filled at 9.15, which was the opening price. After that, DTLK dropped like an absolute stone.

Two lessons:

i) Stick to the rules
ii) OPG trades work..
 
Quote from johnpinochet:

I don't know about anyone else, but after watching the bonds, and seeing what the S&P futures were doing pre-market, I elected to go to sleep rather than buy (or sell) stocks.
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LOL - you're a class act Mr Pinochet, sir!

Yes, you saw very clearly why these stocks are 2+ Beta.
 
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