Started the Trades
- Thread starter sfbayarea
- Start date
There has been a lot of good advice given out over the course of this journal but one also has to realize that good advice doesn't necessarily fit every situation or every individual. Some people trade options, while others prefer stocks or futures and there is nothing wrong with that. The advice that does fit all situations is position sizing and risk management. Those will keep you in the game long enough to figure out if you can make it as a trader or not. As far as strategy advice goes, I not sure who originally wrote it but i have seen it told numerous times on ET and i find it to be the best, and that is that struggling traders will only become profitable once they get tired of losing money and accept the realization that what they are doing isn't working. Personally I went through the same process, and had to realize after a few blown out accounts that taking tiny profitable trades would never offset the losers I held on to too long. Even if i was near perfect the strategy would at best break even and eventually lose in the long run. A trader has to hit this point before they can progress in the right direction.
Enough with the black swan talk. By definition a black swan event is something that goes beyond the realm of normal expectations, so you would never be able to predict it or adjust to the situation by looking at a chart. If something like that were to occur your stops would save you but not protect you from huge losses. The price movement would be so sudden that there is a chance you could get filled full points lower than your stop on a stock like GS. If you are a trader and your biggest worries are these type of crazy events then you should probably just put your money in a CD down at the bank b/c then it will be safe, that is unless a true black swan event happens that brings down the entire financial system then your money might just be gone no matter where it is being kept. But if you do want to be a trader, just keep your risk management system in place and if something crazy happens and you take a big hit on some news event then that's part of the game and take your lumps with pride. You will now have a war story and can post on the worst loss thread as a hardened veteran.
Enough with the black swan talk. By definition a black swan event is something that goes beyond the realm of normal expectations, so you would never be able to predict it or adjust to the situation by looking at a chart. If something like that were to occur your stops would save you but not protect you from huge losses. The price movement would be so sudden that there is a chance you could get filled full points lower than your stop on a stock like GS. If you are a trader and your biggest worries are these type of crazy events then you should probably just put your money in a CD down at the bank b/c then it will be safe, that is unless a true black swan event happens that brings down the entire financial system then your money might just be gone no matter where it is being kept. But if you do want to be a trader, just keep your risk management system in place and if something crazy happens and you take a big hit on some news event then that's part of the game and take your lumps with pride. You will now have a war story and can post on the worst loss thread as a hardened veteran.
Well said.
Of course the obvious irony here is that SB is so concerned about his account teetering on the brink of sub $25k... yet he is not concerned in the least with having over 90% of his capital in a single stock. Unreal.
+24
Sold Short 115.00 Sold Short 115.53
Bought Cover 114.98 Bought Cover 115.47
Sold Short 115.865* Sold Short 115.35
Bought Cover 115.79 Bought Cover 115.33
*Would've held on longer but the abrupt spike down happened. That made me get out. Couldn't take advantage of it as much as I wanted to. Happened too fast. It corrected itself and resumed its trend.
Sold Short 115.00 Sold Short 115.53
Bought Cover 114.98 Bought Cover 115.47
Sold Short 115.865* Sold Short 115.35
Bought Cover 115.79 Bought Cover 115.33
*Would've held on longer but the abrupt spike down happened. That made me get out. Couldn't take advantage of it as much as I wanted to. Happened too fast. It corrected itself and resumed its trend.
Doesn't matter about the black swan.. Everything corrects itself when trading resumes anyhow and the trend resumes. Google the chart I mentioned. Until you can show me otherwise on a chart, I just don't believe you. I'm tired of listening to options stuff. Most traders don't do options anyhow. You're attitude is the worst of anyone here. I'm not the only person to say that. Lighten up and do something else with your day. If I lose, I lose. I'm the only one that would care.
You keep ranting about some stock halt but you still don't have any evidence to back up what you're saying. Your false claims about my scalps losses along with the black swan is all just trolling. No one else here cares about black swans. The only really bad thing would be if my broker's clearing firm was stealing money like MF Global. If you want to see a black swan, go to Australia. There's plenty of them there.
There's a black swan for ya
http://www.elitetrader.com/vb/showthread.php?s=&postid=2244384&highlight=skf#post2244384
The sonofabitch halted trading, for awhile, the next morning too
RN
http://www.elitetrader.com/vb/showthread.php?s=&postid=2244384&highlight=skf#post2244384
The sonofabitch halted trading, for awhile, the next morning too
RN
This is a very naive point of view. There is no rule in trading that everything must correct itself and that there will always be some sort of trend. Whether you want to believe it or not, stocks prices trade randomly and past prices do not predict . Sometimes the prices leave an identifiable pattern on the chart that can be determined a "trend" and sometimes they don't. When prices spike or fall off a cliff there is typically some sort of recovery but this isn't always the case. During 2008, I saw a couple companies practically go bankrupt during a single trading day when banks were pulling credit lines from some struggling small cap companies. I remember some solar company going from $35 to $5 a share before rebounding to $15 and then going back to $2 a share all in about 10 minutes. The market makers couldn't keep up with the order flow and if you put a market order in it probably would have been executed + or - 10% of the last price. These obviously were really weird times and if you were smart would have been on the sidelines just watching things unfold.
I am not trying to discourage your methods just letting you know that to progress as a trader you need to keep an open mind always and keep everything in perspective. Its tough to keep a sharp mind in trading when you are up against funding issues or balance limits. My advice would be to lower your position size and scale back the time you trade on allowing more breathing room for your trades while still being able to keep your same profit goals. I struggled with this all the time as a beginner and kept getting stopped out while trying to play trend lines on a 1 minute chart. Ultimately i realized that my stops were not due to breaking of trends but rather random noise during a normal trading day and that if i pulled back my stops, i would get stopped out a lot less. Of course you have to scale down the position size and increase your target price to make the risk reward worth it.
Thanks for your response. Sorry that happened to you.
http://www.geldpress.com/2008/09/proshares-biggest-counterparty-risk-us-government/
I see the gap. If you looked at the chart. It looked like it finished its measured moves upward at the beginning of the day. Then came a sharp bear drop with its measured moves down which was stronger than the move up. The bears looked to be in charge before the swan so to speak. Why would you be going long with it? I used to do that when I traded counter trend. Thinking the moves were over. It's just better to go with the stronger trend. If you were short SKF, you would've been ok according to the chart at least. But without shorting ability, then it's better not to be in that position. It looked like a morning gap like many other stocks that gap on the 19th. Also I've learned the hard way that holding overnight is dangerous. It's easy to say. Unfortunately I find myself scalping out consolidation points because I didn't like waiting for the expected bigger move. That's my fault.
Today was a similar issue. I was in a short position when a bear spike happened within mili-seconds. It would've been nice if I had an order placed to be buy when it happened. It beat me to it and it corrected and the trend continued.
Thanks for letting me know. As I mentioned before, small cap companies are more risky in that it can happen to them. They always get large climaxes and crashes on news. It's doubtful for a large cap company and if there was bad news, you see it in the chart before it comes out. It starts off slow but with decent volume, grows, and then accelerates. Also those things don't just happen randomly. There will always be a clue on the chart before it happens. IE,, you see strong bear strength before it starts to go haywire down. True that sometimes, the gap is not recoverable but the key is to be on the correct side and not counter trade like I was forced to do for a while. If you saw the stock was getting hammered, it's better to be short than long. If you get the gap down with little or flat recovery, all the better.
There is some random noise and that's mostly like mid-day during market hours. I get caught up at times with time to kill trying to trade it. There are moves and measured moves never the less during these but not much overall price movement. Nowadays, I look at the 5 min chart for some direction and 1 min for an entry. My problem was that I got fixated on the 1 min chart on a number of my losers. Every chart (1 min, 5 min, 15 min, 1 hr.) does have to be glanced over to make sure one's not hitting any roadblocks. That's one thing that I've added. Instynct had a good point about the hourly chart. It's pretty powerful.
