Trading Dummies

Quote from Babak:

kgharris, thanks for the link to the blog - very interesting.
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No problem re: blog (traderx.blogspot.com) - again, I know it is not an exact reflection of what you are doing in this thread, but some of the charts are spot on.

You guys have a great thread going here - I will post some of my (applicable) charts later in the week.
 
Another what-not-to-do post. RTN, I got in this morning at $37.32 and of course I didn't survive the first shake-out. Was out at $37.26. Granted, the blue line trend was broken but had I followed the 8 bars SMA (I know, I know...).

In facts this stock went through two different consolidations, the first time at $37.26 and the second time 37.10ish.

How many cents are you willing to risk before you exit the trade? How do you determine when the trend was broken?
 
ilganzo,

I'm sure others will offer their own insights into this thorny issue which is at the very heart of what trading is all about.

I use 5-min charts for my trading. For me, I look for my trigger using my 5-min chart, and then drill down to my 1-min chart for anticipating & picking my low-risk entry. This in essence means I only enter a position at a point where I know very quickly ( in terms of points lost) if I am wrong. This means I end up passing on a few good trades every day when such a point fails to appear, but I believe in only accepting very small losses when they occur.

If I am wrong, I accept that the anticipated move did not happen and move on without looking back.

My method is no panacea, it has its faults, but it suits me and I live with the problems it presents. In the end it's what suits you and what you are prepared to believe in sufficiently to enable you to put your money on the line every day which will work for you.

Regarding trends, others will be able to offer greater insights than I, but Victor Sperandeo in his"Methods of a Wall Street Trader" got it right for me.

Hope this helps

nimrodeo
 
ilganzo,

Just looked at your RTN pic and can now see your points more clearly.

IMO I would stick with your use of m/a's rather than trend-lines on these intra-day charts. In fact your screen-shot shows pretty well just how much more useful the m/a is for keeping you in and getting you out of your trade! Look at the previous day's action as well. I use m/a's for just this purpose. No guessing involved, it's simple and clear to see all the time.

Others may offer a different view, but I never put trend-lines on my intraday charts. Only on EOD charts.

nimrodeo
 
Quote from nimrodeo:

ilganzo,

Just looked at your RTN pic and can now see your points more clearly.

IMO I would stick with your use of m/a's rather than trend-lines on these intra-day charts. In fact your screen-shot shows pretty well just how much more useful the m/a is for keeping you in and getting you out of your trade! Look at the previous day's action as well. I use m/a's for just this purpose. No guessing involved, it's simple and clear to see all the time.

Others may offer a different view, but I never put trend-lines on my intraday charts. Only on EOD charts.

nimrodeo
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I'm actually considering tight trend stops and *re-entering* the trade at the next consolidation breakup should the move continue in the same direction. There are just too many examples during these last three days where the trend reversal meant leaving money on the table. Was the case yesterday in NTES, AAI and ALTR, today again in FFIV. The only case where I should have played loose stops was RTN yesterday. This might be an exception. Re-entering the trade after consolidation seems a viable solution at this point. Of course, this is all relative to my risk profile and confort level.

FFIV looked like a great setup this morning... I shorted at $48.37 to cover at $49.10 on the reversal.
On the bright side I went short CVH $53.25 (was late, way late) and covered at $52.11.
I should do better size management, relative to the stock volatility. The higher the stock vol, the lower the size...
 

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Quote from ilganzo:

I'm actually considering tight trend stops and *re-entering* the trade at the next consolidation breakup should the move continue in the same direction. There are just too many examples during these last three days where the trend reversal meant leaving money on the table. Was the case yesterday in NTES, AAI and ALTR, today again in FFIV. The only case where I should have played loose stops was RTN yesterday. This might be an exception. Re-entering the trade after consolidation seems a viable solution at this point. Of course, this is all relative to my risk profile and confort level.

FFIV looked like a great setup this morning... I shorted at $48.37 to cover at $49.10 on the reversal.
On the bright side I went short CVH $53.25 (was late, way late) and covered at $52.11.
I should do better size management, relative to the stock volatility. The higher the stock vol, the lower the size...
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I played FFIV on the long side yesterday as a dummy set up (30 min chart). It was my first try at dummies, and although I took profits far too soon (at the first consolidation) it still worked out rather well.

Did anyone short KCI today as a dummy trade? The set up was beautiful!

- The New Guy
 

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Quote from thenewguy:

I played FFIV on the long side yesterday as a dummy set up (30 min chart). It was my first try at dummies, and although I took profits far too soon (at the first consolidation) it still worked out rather well.

Did anyone short KCI today as a dummy trade? The set up was beautiful!

- The New Guy
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Yea, KCI looked great. Didn't show up in my system.

Today I was in DOW, PFG and GMR.
Short DOW $46.01 bought $45.51
Long GMR $35.98 sold $35.81
Long PFG $49.07 sold $49.21

Playing WLP right now... long from $72.93... GO WLP!
 
Quote from ilganzo:

Yea, KCI looked great. Didn't show up in my system.

Today I was in DOW, PFG and GMR.
Short DOW $46.01 bought $45.51
Long GMR $35.98 sold $35.81
Long PFG $49.07 sold $49.21

Playing WLP right now... long from $72.93... GO WLP!
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Just closed the other half of my KCI short (well, I bought puts to be more accurate). Dang, if only all dummies were like this!

What are you guys using as your exit criteria (for profits), if you don't mind sharing...

- The New Guy
 
Quote from thenewguy:

Just closed the other half of my KCI short (well, I bought puts to be more accurate). Dang, if only all dummies were like this!

What are you guys using as your exit criteria (for profits), if you don't mind sharing...

- The New Guy
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I've been trading dummies for only four days. I found 20c trailing stops on a 15 minutes chart is what I'm more confortable with but I guess that margin should be relative to the stock volatility. I've been trading mostly NYSE names so far.
 
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