Active day and swing traders

[evostik]

Mark and Jon,

Thanks for your comments earlier today. I will work on it!

Sorry to bother you with another question, however, there are two schools of thought I am digesting regarding losing positions; one is along the lines of 'keep your Stop in place at appropriate level and let the trade play out'; the other is 'don't carry a losing position overnight'. I am sure its more complicated than either of these, such as considering the time period you are trading over etc.. but anything you are happy to share with me on this would be appreciated.

Thanks Again,

Evo

 

[Euro_d]

Morning all, busy times.
Good news (for me) is that I was long of VMOB on Friday, and then over the weekend NTL came and made bid noises! Closed it yesterday for a very nice and unexpected profit.
I am currently long (bull at heart so I find shorts difficult to enter):
ABP. b @ 576 SL +
SIG b @ 104 SL remains - but only 1.5%
BGY b @ 478 SL - 0.5%
AMEC b @ 356 SL - 0.5% and due to huge bid/offer spreads today I am sure it will close for a small loss.
LMSO b (today) @ 243 sl 230
AVE b @ 70.75 SL - 1.5%
CSTL b @ 577 SL +
CTT b @ 295 SL +
PHTM b @ 122 SL - 0.5%
BOY b (today) @ 227

Sorry for the shorthand b = bought price + & - should be obvious, % refers to the current level in relation to the stop in % terms of the points.

We were talking about the % of ones bank. Well, although I have many positions open (more than normal for me) I, due to some positions having locked in profit am only risking 5.1% of my bank.

Evostick (love the name),
everyone has to find their comfort risk level, as for exits on losing trades I am very strict and set a 3% open stop (or sometimes the last significant low) and whatever happens, NEVER slacken it. If a trade dies I treat it as a business expense and move on. IMHO it is a lethal strategy to consider slackening a stop.
To give an example, as I write I am watching my AMEC trade and for some reason today we had a huge bid / offer spread for the first 30 minutes of trading. My emotion said slacken the stop, experience told me to leave it alone. As it turns out we appear to have settled down and the stop was not executed.
Be very careful, I never slacken stops and actually know of no one who does.

Good trading to all

Dave

 

[evostik]

Dave

Glad you like the name! I guess I am comfortable re the STOP side now.

Cheers

xxxEvoxxx

Steve

 

[Euro_d]

Morning all,
Well, as I suspected my AMEC trade failed eventually for a loss of 4 pips.
ABP started to turn so closed that at 594 for a nice 18 pips.

Nothing of note on the scanner this morning so am not planning any new positions today, lets see if anything pops up.
Seems that we have a weak open so keep a wary eye on longs.

Good trading to all,
Dave

 

[marben]

'morning all,

Has everyone taken an early Christmas break? Never seen it so quiet on here .

I'm having another crack at BT long @ 214.75.

Good trading all,

Mark

 

[marben]

Oh! Must have been my browser: despite refreshing, I didn't see all the new posts.

Current position, all long: AZN, BOC, HG., BA., SAB, SDR, BT.A

Cheers,

Mark

 

[marben]

Hi Evo,

Your approach to stops seems reasonable. As you say, details depend on your trading methods and timeframe.

What you'll have to do now is use your methods for, say, 20-30 trades & see whether, on average, you're being stopped out too soon, too late or OK. You can then adjust your strategy according to results.

Both Dave & I found that we had been setting stops too tight & getting stopped out of trades that subsequently would have been good. Wherever you set your stop, don't forget to size your trade appropriately, so that your maximum loss per trade is strictly limited. The looser the stop, the smaller the trade.

Good trading,

Mark

 

[marben]

Short PRU @ 526.75

 

[marben]

Closed PRU short again @ 528 - bit of an opportunistic entry which failed (as usual ).

Will re-open on a longer term basis if price looks likely to close below yesterday's close.

 

[marben]

Back into PRU short @ 522.75 - conditions for entry properly met this time.

 

[marben]

Stopped out of HG long @ 333, opened @ 344.25 on 23/11

 

[evostik]

Afternoon all,

I was wondering if a few people would share their views on what is a reasonable win/loss ratio (of positions opened rather than points) when trading on a timescale measured in days. As always, I guess there are a number of factors to consider but it would be interesting to hear 'typicals' for the FTSE100 and 250 to see if I am anywhere near the norm and heading in the right direction at least.

Cheers

Steve

 

[solskjaer20]

what is a reasonable win/loss ratio...

i guess what you're trying to get at, also depends on the size of your positions...for example its ok having 10 wins out of 10 on 10000 shares, but that can be wiped out with a couple 50k positions...speaking from experience of course so saying 10 wins from 12 is not all that accurate as it might not reflect your trading account...

having said that i have a better then 50% win ratio

unfortunately due to moving, i haven't had the opportunity to post trades, but should be back to normal by monday.

 

[evostik]

solskjaer20

Fair enough which is why I was getting at the ratio of trades rather than absolute points (if you see what I mean). If one takes an untypical large position then many people would tighten the risk accordingly? Anyhow, thanks for the reply. BTW - does your smiley thing mean you are joking or are pleased about it?

Cheers

Steve

 

[solskjaer20]

If one takes an untypical large position then many people would tighten the risk accordingly? Anyhow, thanks for the reply. BTW - does your smiley thing mean you are joking or are pleased about it?

re tightened stops, personaly i use the same level of stop loss regardless of size of position.

as for the smiley, it means im happy about having a better then 50% win rate.

 

[Euro_d]

Morning all,
solskjaer20, you raise an interesting point about the win / loss ratio. In my opinion it is not my way of looking at my success rate but OK, I accept it is a valid way to judge the selection criteria but not alone.

Recently, the last 3 months, have managed around 50 : 50 BUT due to revised (as Mark) stop and risk management am making points gains each month. For me it matters to make money, if I can get it right 50% of the time but make, say 200 points net gain each month then I am satisfied. I cut losses quickly and (now) let the gainers run. The way I calculate the stake means that whatever the price of the stock I will make the same amount of money whatever the % gain. It matters not if the stock is 70 or 700, it it rises 5 % I will make 5% in cash terms.

OK, update on my positions.
VMOB closed after a nice gain on Monday +34
CTM went nowhere and hit stop - 4
PHTM (+1) and BOY (-6) both as CTM.

I remain long in
BGY SL 12 points +
LMSO riding a 7 point negative and hovering just above the stop, not good
AVE 2.5 points locked in on SL
CSTL 10 points locked in on SL
SIG 3 point loss and close to being stopped.

Nothing on the screener as yet.

Good trading
Dave

 

[marben]

'Morning all,

I'm really just backing others comments here: the trade success ratio is not very meaningful and, personally I don't target it. If, for example you only have a 40% success rate but you make twice as much on each winning trade as on each losing one, you're doing very well!

FWIW the way I monitor my success (or otherwise ) is by looking at profits/losses on closed trades. I total those up on a weekly basis and then take a moving average of weekly profits/losses. By doing this you can see not only how you're doing but also whether you're improving or worsening.

Another worthwhile metric is to looks at annual gains/losses against your trading capital (not usually the same as your trading account) Elder suggests that a consistent 30% return on capital is a very good performance.

Best regards,

Mark

 

[barjon]

mornin' all

been absent most of the week and about to depart again today.

as others have said the bottom line is the thing that matters in the end but, for me, success rate is crucial. i make the assumption - whether it's true or not - that if my success rate has dropped off but the bottom line has held up then that is down to a "lucky shot" which i'd be ill-advised to rely on.

thus, the back analysis of my method centres on success rate - ie: am i providing sufficient winning opportunities - and then the £ result (exits) - ie: am i making the most of those opportunities.

my half eurosworth

good trading

jon

 

[marben]

Two new trades this morning: short BRBY @ 422.125. This is a "special case" trade, in anticipation of share price impact from next Tuesday's GUS demerger. Long BSY @ 494, trying to catch upswing.

Current position: long AZN, BA., BOC, BSY, BT.A, SAB, SDR; short PRU, BRBY

Good trading,

Mark

 

[marben]

Taken profits on AZN long @ 2731, as price seems to be retreating from earlier highs & 3 month resistance level. Opened @ 2621 on 18/11