How To Make Money Trading The Markets.

pedro01 · Jul 2, 2009, 2:54pm

Quote:

Originally Posted by Tileman

Which brings me to the question is there anybody on this thread making money using Richards methods,the fact that Richard wont trade live to prove his technique makes me wonder the validity of it all.

Are you expecting him to trade live for free to prove that the free info he gives here is kosher ?

Whaddya want for nothing ? A rubber biscuit ????

Nearlythere · Jul 3, 2009, 3:21am

Hi Medic,

I've been trying to trade for three years (on top of a day time job) so I can identify with your frustration/confusion. What strikes me about your post are the large losses, it is vital to keep losses small, the classic advice given is never risk more than 2% of your trading capital on any trade. Personally I use the 14 period average true range, I won't trade anything with an ATR>20 cents, ideally about 8-12, I set my initial stop about the ATR. I record every trade and in the last year my average loss is about 10 cents.
I have now come to the conclusion that trading is all about patience, discipline and self control. I read recently that if you can sit all day and not take a trade because there is nothing to trade then you are well on the way to trading successfully, not easy, the temptation to take a trade if you have not traded for a couple of hours is very high.
Hope this helps

Nearlythere

medic · Jul 3, 2009, 9:19am

Quote:

Originally Posted by Nearlythere

Hi Medic,

I've been trying to trade for three years (on top of a day time job) so I can identify with your frustration/confusion. What strikes me about your post are the large losses, it is vital to keep losses small, the classic advice given is never risk more than 2% of your trading capital on any trade. Personally I use the 14 period average true range, I won't trade anything with an ATR>20 cents, ideally about 8-12, I set my initial stop about the ATR. I record every trade and in the last year my average loss is about 10 cents.
I have now come to the conclusion that trading is all about patience, discipline and self control. I read recently that if you can sit all day and not take a trade because there is nothing to trade then you are well on the way to trading successfully, not easy, the temptation to take a trade if you have not traded for a couple of hours is very high.
Hope this helps

Nearlythere

Hi Nearlythere,

Every day I learn so much more and my account is large enough to take my mistakes (even if my stomach is not).
In my 3 month trading experiment I have had 46 winning trades vs. 34 losing trades. To be fair probably half of the winning trades went against me upto my stop loss before turning positive. Any you're right, had I regiliously applied my stop loss strategy my losses would be smaller. I failed at this for three reasons:

1. My trading plan (until recently) was exclusively reversals at R/S. So I would enter against the trend at R/S levels looking for a >5c scalping. This meant commiting to large share sizes to make money of small moves. If the price broke through instead I'd use a market order to ensure I got out and suffered slippage.

2. My broker Scottrade Elite - Only allows a stop order 10c from current price so usually I am not able to place a stop loss order when I place my buy limit order. So I manage the trade manually and stay in longer than I planned (as other indicators and L2 show the reversal that I am looking for). I now use much smaller position sizes to ensure I can place the stop loss when I place the trade. That removes any emotional procastrination when the stop is approaching.

3. I trade large share sizes to reduce the burden of commissions. At 14 bucks RT I need to make $28 + spread to scratch every time I win one/lose one. So I set my stops tight and go for large profits from small moves. The probablity of return on these trades is good as the market does not have to move far and I'm out with $100-200 profit less than a minute later. I have thought about switching to TradeStation or eSignal but am not decided if I will continue yet and dont want to sign up for monthly or dormant fees (none with ST).

The most interesting thing about my experience is the vast range of styles and techniques used to achieve the same aim. For any trade entered you can only be right or wrong and I'm facinated how all the knowleadge and leasons I've learnt can determine which side you end up.

Hope this information helps someone else. Thanks for a great forum.

Mark.

Mr. Charts · Jul 6, 2009, 3:43pm

Thanks for the comments. guys

Richard

TickJob · Jul 11, 2009, 8:17pm

After long long years of searching in the internet, I finally found someone using the similar setup that I have been looking at since 20 years ago. However, I am not active trader because I am still trying to convince myself will such simple method that really work when I really trade it.

Richard,
do you think this will also work by using the respective stock options?

pedro01 · Jul 11, 2009, 10:12pm

All

I found this method requires fast fingers if you have a few positions on at a time, so here's an ELD.

Idea is that you put this strategy on a chart window but disable it. When you are ready to buy, just enable the strategy and it will instantly buy as well as put a stop order at the low of the last bar.

Make sure you test, test, test & make any adjustments you need before running it on your live account please !!

Code:

[IntrabarOrderGeneration = True];
Inputs : QtyOverride(0), AccountSize(25000), RiskPercent(.25), MaxTradeValue(0) ; ;
Vars : intrabarpersist Done(false), intrabarpersist RiskCents(0), intrabarpersist NumShares(0);
if marketposition = 1 or GetPositionQuantity(GetSymbolName, GetAccountID) <> 0 then done = true;
if GetAppInfo( aiRealTimeCalc ) = 1 then begin 
    if done = false then begin
  RiskCents = (Close - Low[1]) + .01;
  NumShares = ((AccountSize / 100) * RiskPercent) / Highest(RiskCents,AvgTrueRange(14)) ;
  if MaxTradeValue <> 0 then NumShares = minlist(NumShares,intportion(MaxTradeValue / Close));
  if QtyOverride <> 0 then NumShares = QtyOverride;
  buy NumShares contract next bar market ; 
 end;
 if NumShares = 0 then NumShares = GetPositionQuantity(GetSymbolName, GetAccountID);
    Sell NumShares contract next bar Low[1] Stop ; 
end ;

Qty Override - number of shares to buy if you don't want the system to calculate
AccountSize -
RiskPercent - Risk per trade (%)
MaxTradeValue - max number of dollars to commit to a trade (total, not risk total)

Enjoy

wh92stang · Jul 13, 2009, 10:58am

Quote:

Originally Posted by TickJob

After long long years of searching in the internet, I finally found someone using the similar setup that I have been looking at since 20 years ago. However, I am not active trader because I am still trying to convince myself will such simple method that really work when I really trade it.

Richard,
do you think this will also work by using the respective stock options?

Tick,

I've tried the method using respective stock options and it does work, but at a greater risk and without defined boundaries. For example, if stock XYZ triggers and you want to go long so you buy XYZ options, you have to correlate the failure point of the stock with the failure point of the option (using delta and the price) in order to calculate your maximum possible loss. The other key is the options are obviously much less liquid than the stock so an option with a very narrow spread works best.

So yes, it can be profitable, however, since price movements of the derivative do not correspond 1:1 with price movements of the underlying security you have to be careful.

Mr. Charts · Jul 13, 2009, 11:03am

Great contribution pedro01
If you ever did one for eSignal I'd be interested, very interested

Richard

Jul 3, 2009, 3:21am	#442
Nearlythere Rookie Member Member Since Apr 2009 9 Posts	Re: How To Make Money Trading The Markets. Hi Medic, I've been trying to trade for three years (on top of a day time job) so I can identify with your frustration/confusion. What strikes me about your post are the large losses, it is vital to keep losses small, the classic advice given is never risk more than 2% of your trading capital on any trade. Personally I use the 14 period average true range, I won't trade anything with an ATR>20 cents, ideally about 8-12, I set my initial stop about the ATR. I record every trade and in the last year my average loss is about 10 cents. I have now come to the conclusion that trading is all about patience, discipline and self control. I read recently that if you can sit all day and not take a trade because there is nothing to trade then you are well on the way to trading successfully, not easy, the temptation to take a trade if you have not traded for a couple of hours is very high. Hope this helps Nearlythere __________________ Nearlythere Frustrated would-be Nasdaq day trader

Jul 6, 2009, 3:43pm	#444
Mr. Charts Legendary Member Member Since Sep 2001 5,930 Posts	Re: How To Make Money Trading The Markets. Thanks for the comments. guys Richard __________________ Mr. Charts Full time US Share Trader Contributor to T2W's Trading FAQ Book http://www.trade2win.com/books/trading-faqs T2W interview http://www.trade2win.com/knowledge/a...ichard-joyson/

Jul 11, 2009, 8:17pm	#445
TickJob Rookie Member Since Apr 2008 8 Posts	Re: How To Make Money Trading The Markets. After long long years of searching in the internet, I finally found someone using the similar setup that I have been looking at since 20 years ago. However, I am not active trader because I am still trying to convince myself will such simple method that really work when I really trade it. Richard, do you think this will also work by using the respective stock options?

Jul 13, 2009, 11:03am	#448
Mr. Charts Legendary Member Member Since Sep 2001 5,930 Posts	Re: How To Make Money Trading The Markets. Great contribution pedro01 If you ever did one for eSignal I'd be interested, very interested Richard __________________ Mr. Charts Full time US Share Trader Contributor to T2W's Trading FAQ Book http://www.trade2win.com/books/trading-faqs T2W interview http://www.trade2win.com/knowledge/a...ichard-joyson/

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