Successful Swing traders, how do you get past this ?

[ZeroSigma]

Quote from indexer:Plus, what advantage would a computer have [in longer time frames]

Surprisingly many. Error-free execution of complex orders under conditions of human stress, when most true opportunities occur. The synergy of the entire traders rulebook analyzed in real time and kept into the future, irrespective of the quality of human memory.. Scaleability over many independent sources of risk which aids diversification and prevents overtrading. The ability to turn off the charts and other scaremongering commission-generating aids. Ruthless discipline, no emotional baggage, including no fear of going against the consensus opinion and no greed that prevents humans from entering and exiting 'too early'. Better ergonomics, tailor-made customization to your needs, an immediate reaction to bug reports and freedom from constant unwanted software changes (if you are with IB, think the exact opposite of their customer support, where they want *you* to change

There are some 'soft' arguments too. Infinite patience in waiting for the opportunity to present itself, making you into a really tough negotiator. No need to force low-probability trades during periods of low volatility, caused by the innate human fear of the flat equity curve. No feeling of being unemployed when you have made no trades. After all - you have turned Her on and you haven't been watching the screens all day in vain, so maybe you even did something intrinsically rewarding and have no regrets for the unproductive day. Also the rare opportunity to challenge yourself while developing your applications and thus enter the state of 'flow' - probably the only moment of true happiness in this remarkably mean occupation.. apart from writing for ET of course

 

[simpletrade]

You open your investment account with a specific amount of money, lets say $5000, 10,000 or 50,000, etc. This is your ORIGINAL CAPITAL BASE.

You make it a RULE never to let the account drop below this BASE amount.

You decide upon the first stock you will purchase and you determine where you will place a protective STOP-LOSS and how much money will be lost if the STOP-LOSS is hit. We are essentially PADDING THE ACCOUNT with a LOSS BUFFER.

Here is an example.

You have 10,000 dollars in your account. Your goal is to not lose one single penny of this money.

You determine the risk of your first trade based on protective stop loss placement and send in a check into your account for that amount. Now you have risk capital in your account.

Even if the trade goes against you and you are stopped out.. your ORIGINAL CAPITAL IS STILL INTACT.

Now you go into a WAIT STATE until you can afford to send in RISK MONEY again.

Taking this approach puts a THROTTLE on your activity when starting out, i.e. PACES YOU so you don't rush into wiping out your account before you even know what hit you.

If your Stop-Loss keeps getting hit either you are doing something wrong or the market conditions are just to risky.

The worst situation to find yourself in is to start making bigger and riskier investments in order to pull yourself out of a hole after you have cut your account size in half.

The Pay-To-Play approach prevents this from happening.

Even if you are not successful with your first few attempts, YOU CAN WALK with all of your ORIGINAL MONEY and if you continue you will eventually hit a winning trade.

Once you have a winning trade under your belt you HAVE PADDED THE ACCOUNT with a PROFIT BUFFER for your next trade.

For instance. You send in your risk money, buy your stock, but your first attempt fails and you are stopped out with a $275 loss.

Two weeks later you spot another potential investment coming up, you send in your risk money and this also fails when you are Stopped out with a $225 loss.

The following month you spot your next purchase, send $300 dollars risk money in and buy 100 shares of stock.

This time you are successful and over the next 3 weeks end up with an 8 point or $800 dollar gain.

Now your account balance consists of the $10,000 you started out with, the $300 you just sent in and $800 profit from your first winning trade for a total account balance of $11,100.

You have successfully PROTECTED YOUR ORIGINAL ACCOUNT BASE, made up for the first two losses, and have PADDED your account with $1,100 for your 4th trade.

Now you are playing with HOUSE MONEY.

If you are unable to send in Risk Money to your account, go into a WAIT STATE until you can.

One final thing:

Ratchet up your PROTECTION LEVEL as your account grows in size.

Lets say that within 6 months you increase your account size from $10,000 to $16,000. Make $15,000 your new DO-OR-DIE protection level and work from there. If you have to, go back to the PAY-TO-PLAY method to protect this new amount.

This is how to keep your account size GROWING and CREATE WEALTH in the stock market.

 

[ES.Dreamer]

Quote from simpletrade:

You open your investment account with a specific amount of money, lets say $5000, 10,000 or 50,000, etc. This is your ORIGINAL CAPITAL BASE.

You make it a RULE never to let the account drop below this BASE amount.

You decide upon the first stock you will purchase and you determine where you will place a protective STOP-LOSS and how much money will be lost if the STOP-LOSS is hit. We are essentially PADDING THE ACCOUNT with a LOSS BUFFER.

Here is an example.

You have 10,000 dollars in your account. Your goal is to not lose one single penny of this money.

You determine the risk of your first trade based on protective stop loss placement and send in a check into your account for that amount. Now you have risk capital in your account.

Even if the trade goes against you and you are stopped out.. your ORIGINAL CAPITAL IS STILL INTACT.

Now you go into a WAIT STATE until you can afford to send in RISK MONEY again.

Taking this approach puts a THROTTLE on your activity when starting out, i.e. PACES YOU so you don't rush into wiping out your account before you even know what hit you.

If your Stop-Loss keeps getting hit either you are doing something wrong or the market conditions are just to risky.

The worst situation to find yourself in is to start making bigger and riskier investments in order to pull yourself out of a hole after you have cut your account size in half.

The Pay-To-Play approach prevents this from happening.

Even if you are not successful with your first few attempts, YOU CAN WALK with all of your ORIGINAL MONEY and if you continue you will eventually hit a winning trade.

Once you have a winning trade under your belt you HAVE PADDED THE ACCOUNT with a PROFIT BUFFER for your next trade.

For instance. You send in your risk money, buy your stock, but your first attempt fails and you are stopped out with a $275 loss.

Two weeks later you spot another potential investment coming up, you send in your risk money and this also fails when you are Stopped out with a $225 loss.

The following month you spot your next purchase, send $300 dollars risk money in and buy 100 shares of stock.

This time you are successful and over the next 3 weeks end up with an 8 point or $800 dollar gain.

Now your account balance consists of the $10,000 you started out with, the $300 you just sent in and $800 profit from your first winning trade for a total account balance of $11,100.

You have successfully PROTECTED YOUR ORIGINAL ACCOUNT BASE, made up for the first two losses, and have PADDED your account with $1,100 for your 4th trade.

Now you are playing with HOUSE MONEY.

If you are unable to send in Risk Money to your account, go into a WAIT STATE until you can.

One final thing:

Ratchet up your PROTECTION LEVEL as your account grows in size.

Lets say that within 6 months you increase your account size from $10,000 to $16,000. Make $15,000 your new DO-OR-DIE protection level and work from there. If you have to, go back to the PAY-TO-PLAY method to protect this new amount.

This is how to keep your account size GROWING and CREATE WEALTH in the stock market.

whats the trick for not losing and ever going below base ? lol

 

[Free Thinker]

Quote from simpletrade:


This is how to keep your account size GROWING and CREATE WEALTH in the stock market. [/B]

lol. last time i checked mony lost was money lost no matter what pocket you take it out of. it looks to me like you do not trust your ability to control your emotions.

 

[simpletrade]

You never trade your base

 

[Free Thinker]

Quote from simpletrade:

You never trade your base

well you might not but sombody more experienced would. playing silly head games with yourself is not the sign of an experienced trader.

 

[JSSPMK]

Quote from zanek:

I'm thinking of switching to Swing trading, as day trading has literally become a black hole of time sucking craziness.

So the $64 question is, how do successful swing traders guard against drawdowns ?

Do you just use wider stops (I would guess this is the answer) ?

What do you do when stocks gap down the next day ? Do you just take the hit either way and close out and keep trading ? Or do you hold to see if the trend resumes ?

Thanks in advance !

Daily chart:

1) Enter after a failure swing;
2) Stops outside trading range;
3) Hold position till x3-4 risk and/or an opposite failure swing.

 

[ES.Dreamer]

Quote from JSSPMK:

Daily chart:

1) Enter after a failure swing;
2) Stops outside trading range;
3) Hold position till x3-4 risk and/or an opposite failure swing.

any chance you can post a chart of this?

thx