Maximum profit?

This is a discussion on Maximum profit? within the General Trading Chat forums, part of the Reception category; Originally Posted by Jason101 Hi Tom, Do you know any professional traders socially in the the real world (as in ...

Reply
 
LinkBack Thread Tools Search this Thread
Old Jun 22, 2017, 7:29am   #9
Joined Feb 2002
tomorton started this thread
Quote:
Originally Posted by Jason101 View Post
Hi Tom,
Do you know any professional traders socially in the the real world (as in not via the Web)?
I have found associating and socialising with real world proprietary directional traders opens your mind in ways nothing else can. For me personally just one of the benefits I found was not to be scared of size and to be open and flexible as to when real size is put on, instead of your usual risk.
I think it's a little bit of being desentasized to some aspects of size and rules at some particular times.

Another thing I will do is to pyramid hard early on in a new trend trade to the point to which a break even trade is by far the most likely scenario but a win is well over sized for my account size. So I tend to get an even(ish) loss to b/e ratio @ 1-2% risk. And then a minority of longer term trend trades going a lot further in price at a much heavier weight than the 2% loss or b/e.
This style is not easy and not for everyone because most people require a higher win ratio.

I don't associate with any real life traders these days Jason, used to meet some on a monthly basis but years back now.

But your comments on early pyramiding are really good food for thought, thank you very much.
tomorton is offline   Reply With Quote
Old Jun 23, 2017, 12:43am   #10
Joined Jul 2015
Quote:
Originally Posted by Jason101 View Post
Another thing I will do is to pyramid hard early on in a new trend trade to the point to which a break even trade is by far the most likely scenario but a win is well over sized for my account size. So I tend to get an even(ish) loss to b/e ratio @ 1-2% risk. And then a minority of longer term trend trades going a lot further in price at a much heavier weight than the 2% loss or b/e.
This style is not easy and not for everyone because most people require a higher win ratio.
I am a bit curious about this. The main thing with overnight holding that I don't deal well with is the potential for large price gaps close to open. Although it is easy enough to size a position for a fixed percent loss based on where you set your stop, when holding overnight you really can't ever say you know for a fact what % or $ risk you have since you may be gapped over.

For this reason I have always limited my position size when holding overnight based more on half of what I would consider a "worst case" gap or what my analysis indicated a reasonable support point would be --> whichever resulted in the smaller size (almost always worst case gap controls). Reasoning being the gap would be unlikely to occur and twice my intended risk would suck but not be the end of the world.

It would seem to me that pyramiding in the way you are indicating would open yourself up to a substantial blow to your account if the stock gapped against you. Is that a fair assessment, and has that ever happened to you?
Dr. Toad is offline   Reply With Quote
Old Jun 23, 2017, 8:05am   #11
Joined Feb 2002
tomorton started this thread I find in my trend-following trades, that very few opening gaps occur. Whether that's because I'm trading stocks that are strongly trending I don't know. But more of the gaps that do occur are with-trend than against it. Using TA-based stops means only a gigantic opening gap would take me out of a position - possible but its going to be very rare.
tomorton is offline   Reply With Quote
Old Jun 23, 2017, 9:54am   #12
 
barjon's Avatar
Joined May 2003
Quote:
Originally Posted by tomorton View Post
I find in my trend-following trades, that very few opening gaps occur. Whether that's because I'm trading stocks that are strongly trending I don't know. But more of the gaps that do occur are with-trend than against it. Using TA-based stops means only a gigantic opening gap would take me out of a position - possible but its going to be very rare.

Tom (and Dr Toad)

Same experience. If you've got the momentum with you then it's more likely that you'll forsake more by missing favourable opening gaps than you'd lose by avoiding the unfavourable ones.

Early on in a trade when my stop maybe close by I often take it off overnight to avoid being stopped out by the opening volatility and/or widened spreads. Sounds dangerous, I know, but if there was a biggish opening gap against me I'd be slipped on my close stop anyway.
barjon is offline   Reply With Quote
Old Jun 23, 2017, 10:35am   #13
Joined Feb 2002
tomorton started this thread That's really fine jon, just the sort of tactic I was hoping to confirm. I do see opening gaps but they're not catastrophic. On top of which, very frequently the strongest with-trend price movement of the day is in the first hour, don't want to miss that.
tomorton is offline   Reply With Quote
Old Aug 1, 2017, 8:01pm   #14
Joined Oct 2008
Quote:
Originally Posted by Dr. Toad View Post
I am a bit curious about this. The main thing with overnight holding that I don't deal well with is the potential for large price gaps close to open. Although it is easy enough to size a position for a fixed percent loss based on where you set your stop, when holding overnight you really can't ever say you know for a fact what % or $ risk you have since you may be gapped over.

It would seem to me that pyramiding in the way you are indicating would open yourself up to a substantial blow to your account if the stock gapped against you. Is that a fair assessment, and has that ever happened to you?
Hi Dr Toad,

Yes, pretty much as Tom and Jon are saying in that when trading with the long term trend, a gap is more often than not going to be in your favour (favor for your side of the pond). So any gaps against your position are usually a sacrifice worth taking.

But, my post, as you pointed out, was referring to early pyramiding. When I am intraday pyramiding (to hold for the longer term) I am pretty careful as to what I am trading. I will only do this on FX or something that a look back on the charts shows very little gaps (sometimes bonds and comms). I really don't like early pyramiding on stocks at all.

I did not make this clear in my reply because I was answering Tomorton and I was convinced he only traded FX. But now looking at his replies I am not so sure. Either way I should of made myself more clear for other readers too.

Last edited by Jason101; Aug 1, 2017 at 8:10pm.
Jason101 is offline   Reply With Quote
Old Aug 1, 2017, 8:08pm   #15
Joined Oct 2008
Quote:
Originally Posted by barjon View Post
Tom (and Dr Toad)

Early on in a trade when my stop maybe close by I often take it off overnight to avoid being stopped out by the opening volatility and/or widened spreads. Sounds dangerous, I know, but if there was a biggish opening gap against me I'd be slipped on my close stop anyway.
I have occasionally done this too, especially around holidays.
The other thing I have done is to widen my stop and hedge with an apposing direction for the gap. I suppose this is the same thing, but I find it easier psychologically to close a losing trade (usually the hedge) than setting up a new trade to open after the volatility and or gap.
PS. sometimes on the right instrument I will use guaranteed stops for early pyramiding.

Last edited by Jason101; Aug 1, 2017 at 8:14pm.
Jason101 is offline   Reply With Quote
Old Aug 1, 2017, 11:43pm   #16
 
Quantt's Avatar
Joined Jul 2017
Quote:
Originally Posted by tomorton View Post
Let's look at the experienced traders here. We each have a system that gets us in and out at the right times. Risk control is in place, money management is fine, we've got past emotional trading and we're making some money. And this through consistent planned trades, not lucky windfalls or tips.

But isn't there a higher level? Can we reach it? How can we make the MAXIMUM profit from whatever we're doing? And I mean maximum, not just another decimal on the r:r, not just another ten quid by waiting just one more candle.

How are you doing it?
The best approach I am using is to optimize betting size using Kelly criterion... Hope it help...
__________________
"If you don't find a way to make money while you sleep, you will work until you die." Warren Buffett, CEO of Berkshire Hathaway.

Count de Money number 1 trading rule: EDUCATE YOURSELF!

Before you trade even single penny on the stock market, please spend the time and educate yourself by back testing different trading strategies and ideas - go to eBay and search for "historical stock market data", you can buy 20 years of data for less than $100 - that's all you need to start.
Quantt is offline   Reply With Quote
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Similar Threads
Thread Thread Starter Forum Replies Last Post
How set-up an IB firm to make maximum profit? irman Trading Firms 0 Jul 17, 2013 5:02am
How To Trade The Cup And Handle Chart Pattern For Maximum Profit morpheustrading Technical Analysis 0 Apr 2, 2013 3:39pm
"Mr Spread Betting: Maximum Profit, Low Risk Trading" Book ??? Munster2010 Educational Resources 174 Aug 7, 2012 10:58pm
Maximum Deposits Interceptor Brokerages 11 Jan 14, 2009 12:45am
Maximum Payout tar Fixed Odds 2 Jun 25, 2007 3:37pm

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)