Stop Loss and Profit Areas Strategy : Money Management Skill Query

[Tradex]

Anyway, risk management is not the same in all trading instruments or timescales.

Wait, say that again.

Hmmm...

 

[hilmy83]

Thank you so much! This is really informative.

Lol wtf. You're blown away by investopedia...

 

[creatorofmatrix]

Are you a trend follower or do you look for reversals?

I look out for the fading trends for entry and exit both side. The equation I developed gives me edge of little time advantage of entry and exit signals before others. ( For exit thing I am still developing a code)

 

[Tradex]

I look out for the fading trends for entry and exit both side

Ok, so you are a trading range trader , right?

 

[creatorofmatrix]

I am not trying to be rude.....but you have a PhD and have developed a successful system....and yet you are defeated by the simple task of going to www.amazon.com and typing in "risk management trading" in the search box?

It took me less than 30 seconds and there are a whole host of books regarding what you are looking for.

Anyway, risk management is not the same in all trading instruments or timescales. If you trade futures, it will be different to say trading options, which will be different to trading vanilla stocks. If you are a day-trader then your stops may be a lot more closer than if you are a position trader etc.

Also, risk management (like trading itself) cannot fully be learnt from books/academia. Nothing teaches you more than the actual loss of real money. Books will give you general principles, but you have to refine the process to your own risk-tolerance, personality etc.

You don't need to give away any of your secrets, but if you are able to share a bit more information about what you trade (stocks/forex/options/futures/commodities), how often you trade (day-trader/position-trader/swing-trader), how many trades do you do roughly in a day/week/month etc etc, then you may get more reasoned responses.

All the best.

I have tried reading many books and infact read 30 books on trading and programming till now but most of them tells the same story. I don't want to sound like fool but I haven't traded with a stop till now. When ever I place a stop it always hits and whenever I don't have a stop I always win. But till now I was trading in a very small quantity 1 or 2 lots of futures and glued to the screen all the time, just few days back recovered my initial learning losses from the market . As I want to scale my game up I wanted to ask other professional traders.

I agree that I am new to this game but I have learned a lot. I started with stocks but in few months I was able to make handsome returns on day trade on 15 minute chart. So I moved on to Futures. The number of trades depends on the signals from my system. Usually I have developed a strategy to enter at a smaller time frame and exit at a larger time frame as I was not able to control emotions as a newbie. Also presently I do maximum one to three day trades per day. if first is profitable I don't take up second or third. If first in loss then I move to second trade and if second also in loss I attempt a final trade to recover losses.

 

[zghorner]

Lol wtf. You're blown away by investopedia...

god tier post.

 

[creatorofmatrix]

Ok, so you are a trading range trader , right?

A sort of but actually I ride the trend in the same direction earlier than others. i was able to make a faster indications of entry into the trend. When my system gives me signal it is providing a faster time edge to ride the trend in the same direction.

 

[creatorofmatrix]

What are you trading (basic strategy)? If you're trading intra-day momentum, your exist signal should be deceleration in a trend (you define). I recommend reading Ernie Chan.

Algorithmic Trading Winning Strategies and Their Rationale
Quantitative Trading How to Build Your Own Algorithmic Trading Business

Got both these, Thanks for your recommendation.

 

[creatorofmatrix]

Lol wtf. You're blown away by investopedia...

Yes bro, sometimes naïve things fascinates me. I am totally blown by your sense of humor. At least you are following this thread & I hope you will share something soon from all your experiences as a trader to enlighten me . ;-)

 

[Tradex]

Well Creatorofmatrix, if you are fading trends then the opposite side of the range is your exit (more or less).

On the other hand if you are trend following put a simple 50-period moving average on your chart and trail the freaking move until the end (close the position when the price drops below this average 3 days in a row for instance, for long positions, and vice versa for short trades).

As always, keep it simple, you can earn a very good living trading very simple chart patterns, day in and day out.

Cheers.