Trading with an edge

[BeginnerJoe]

You should trade with real money using your system. I am running a test to see if it works. Show us you have edge and conviction in your beliefs.

 

[kausty]

You should trade with real money using your system. I am running a test to see if it works. Show us you have edge and conviction in your beliefs.

Thank you Begginer Joe. Atleast you have an open mind to try and test it. Regarding trading with real money, I use the same system to trade the FTSE and some currencies. And ofcourse, I would say, never ever trade any system with real money with only backtesting......test a system with future move for some time before putting your money on it.

The reason for using the Indian stocks is because I am originally from India and hope over time I can get more people following the blog.

 

[kausty]

Did any of you guys take the RIL, HDFC or Bharti trades today ?

 

[Pat494]

Hi kausty,

I think there would be more interest here if you traded US or UK markets imho

 

[nunrgguy]

Every trade needs to be high conviction. If the prices doesn't do what you expect it to do, you will loose money. If you are sitting there watching every tick, most likely outcome......moving the stops and praying !!
Take a trade. Go for a walk. If the market is on your side, think of where to take profit. If you are stopped out, you are stopped out....look for the next trade.
Take a look at this blog http://tradethesensex.blogspot.com/ The prices and stops for tomorrow's Indian market is already set up !!
It is a new blog, but look at the performance of the last 4 days. The performance is based on the first price point which is hit (buy/sell) and end of day prices. But every time a stop loss is hit, the losses are accounted for that trade.

If you are stopped out you have dropped a huge b0lllock. If the trade is going against you should be out before price hits your stop.

Stops are not there for exits. If I'm right, like 99% of retail traders you're using price and time as your entry criteria yet you only use price as your exit criteria. And to make it worse you're day trading. Double duh.

 

[kausty]

Hi kausty,

I think there would be more interest here if you traded US or UK markets imho

Alright, here goes. From now, I would be a buyer of the FTSE above today's high of 5745 with stops below 4741 and maybe take profit once the momentum fades to the upside. This is a low risk trade.
I would be a seller of the FTSE below 5714 with stops above 5734.

 

[0007]

If you are stopped out you have dropped a huge b0lllock. If the trade is going against you should be out before price hits your stop.
........

That's a simple but very very important principle - and oh so true! Took me a while to learn that but it's stood me in good stead ever since.

 

[kausty]

If you are stopped out you have dropped a huge b0lllock. If the trade is going against you should be out before price hits your stop.

Stops are not there for exits. If I'm right, like 99% of retail traders you're using price and time as your entry criteria yet you only use price as your exit criteria. And to make it worse you're day trading. Double duh.

I am not using time as an entry point, only price. I give the buy or sell price points with thier respective stops a day earlier. The loss on a trade will depend on the risk taking capability of the trader. If the stops are wide, you decrease yourr trading lot size and if they are tight you increase the size of your trading lot.

You are right that the time-stop is the best stop, but that cannot be set till one actually enters into a trade and the momentum of the market at the point of entry. A technical stop-loss point is the second best and can be decided before entering into a trade. Every trade should have a stop-loss point before entering the trade !!

 

[kausty]

Today's performance is posted on the blog........will post tomorrow's prices in a few hours.

 

[nunrgguy]

I am not using time as an entry point, only price. I give the buy or sell price points with thier respective stops a day earlier. The loss on a trade will depend on the risk taking capability of the trader. If the stops are wide, you decrease yourr trading lot size and if they are tight you increase the size of your trading lot.

You are right that the time-stop is the best stop, but that cannot be set till one actually enters into a trade and the momentum of the market at the point of entry. A technical stop-loss point is the second best and can be decided before entering into a trade. Every trade should have a stop-loss point before entering the trade !!

I didn't say you shouldn't have a stop loss point before you set the trade

What I said was stop loss does not equal point of exit unless you drop a b0llock or there is huge market mometum against.

Price on its own is meaningless.
Tight stops are the number 1 killer of retail traders.

This is a bad example: there's not enough scope for decent r:r but the chart will do to show the idea:

Or you can keep trying to scalp intraday providing liquidity for someone else's orders with your stop :clap:

 

[new_trader]

Tight stops are the number 1 killer of retail traders.

Not this sh1t again.

It's lack of understanding, ignorance, incompetence, not stop placement.

 

[kausty]

I didn't say you shouldn't have a stop loss point before you set the trade

What I said was stop loss does not equal point of exit unless you drop a b0llock or there is huge market mometum against.

Price on its own is meaningless.
Tight stops are the number 1 killer of retail traders.

This is a bad example: there's not enough scope for decent r:r but the chart will do to show the idea:

Or you can keep trying to scalp intraday providing liquidity for someone else's orders with your stop :clap:

Hindsight is the best sight.....the charts you have put up are history......the EURUSD is now at 1.4379.......give me a trade, with a stop ?

 

[nunrgguy]

Hindsight is the best sight.....the charts you have put up are history......the EURUSD is now at 1.4379.......give me a trade, with a stop ?

Wait for a possible short at 1.4578. Near term PA will say whether the trade is viable or not.

Actual stop I cannot tell you. If you have understood a word I've said you will know why but it will be past 1.47.

I cannot predict the market, neither can you.

As I've already stated it can go 200 pips past my entry. I don't care as long as it's back within time criteria. Be smallest at entry and add to winners.

 

[kausty]

Here are my price points. Buy it above 1.4450 with stops 20 pips below. Sell it below 1.4199 with stops above 1.4215. If stopped out, take the trade again if the markets gives it to you.....one of them should run a few hundred pips.

 

[nunrgguy]

Not this sh1t again.

It's lack of understanding, ignorance, incompetence, not stop placement.

Those things don't lead to incorrect stop placement either?
I'd also add, lack of discipline to close trades out, instead relying on a stop.

 

[nunrgguy]

Here are my price points. Buy it above 1.4450 with stops 20 pips below. Sell it below 1.4199 with stops above 1.4215. If stopped out, take the trade again if the markets gives it to you.....one of them should run a few hundred pips.

Those two blue lines at the top of the chart?

The market will do what the market does given time.

 

[nunrgguy]

Here are my price points. Buy it above 1.4450 with stops 20 pips below. Sell it below 1.4199 with stops above 1.4215. If stopped out, take the trade again if the markets gives it to you.....one of them should run a few hundred pips.

Buying into supply and selling into demand?

I'm open to new ideas.


Sorry. I'll stop now. I apologise. Can't you tell I'm bored?

 

[the hare]

As I've already stated it can go 200 pips past my entry. I don't care as long as it's back within time criteria.

So how do you you handle the situation when it doesnt come back, surely you need some sort of line in the sand ?

I tend to set initial stops based on MAE and quite often they'll get hit and I'm OK with that. For some stuff I use no stops and timed exits (other than a 10% disaster stop which thankfully has never been hit). Some years this seams to work much better, and sometimes not , but I will certainly close a pozzy if I see an adverse move and an increase in volatility (I use a method based on a technique Chuck Le Beau suggests which IIRC he calls a YOYO stop).

What I will say is that every bit of retrospective analysis that I've ever done suggests that I should / could be using far tighter stops than I do (I dont do it because I fundementally disagree with any type of walk forward optimisation on the grounds that at some point mean reversion kicks in and it comes back and bites you on the ass) My current strike rate isnt particularly high, so cutting losers quickly tends to work well for me, whereas previously I had a very high strike rate, and was generally quite good on getting entries in the right ballpark so holding through some adverse movement and using a wider stop made far more sense and usually worked out.

I dont think there's a one size fits all answer to this particular question, you just have to do what fits in with the overall philosophy. I know momentum traders who believe that if the entry isnt immediately in profit they'll take a loss, and that works well for them. I also know guys who'll average in and tolerate a great deal of heat, and that works for them.

 

[kausty]

BSE for 22nd June, 2011 : Buy above 17,716 with stops below 17,503 and sell below 17,503 with stops above 17,715.
Obviously the price points for the top 10 BSE stocks are on my blog at http://tradethesensex.blogspot.com/
The first 100 "followers" of the blog get these price points free for life !!

 

[kausty]

Buying into supply and selling into demand?

I'm open to new ideas.


Sorry. I'll stop now. I apologise. Can't you tell I'm bored?

Sorry, I am not very well read and definitely not a technical analyst. I am just a poor soul. All I believe is that any price that is good enough to buy, below it should be good enough to sell back and vice versa ?