FTSE 100 January

[mully]

Barjon,

I have a problem with your approach as you appear to start
with 45% of your total exposure as your initial position, when
you are at your maximum risk exposure.

You may have an ultimately correct position but you have no way of knowing until the market confirms.

Surely your intially position should be as small as possible, thereby limiting any losses to the smallest amount.

Of course increase towards your max position size, BUT only once the market has confirmed your view.

 

[mully]

Barjon,

I work on the assumution that trading is a losing game and my position is probably wrong. However, once the market confirms my position as correct then my edge is working and I can place a meaningful position. This way if I am wrong it is only costing me small. I want to survive long term.

Hope this helps.

 

[mully]

FTSE250 not confirming FTSE100 pullback

 

[Hooya]

interesting you say that Mully, I view the entry as the lowest risk
exposure at that given time. As we all know we dont not know where the market is going so at the time of enrty you have a confirmed signal with set stop area and thus you risk is fixed. But as it moves in your direction your stop is further away (ovbiously until there is a clear place to put a new one) and thus the risk is increasing. What happens if you enter with only 10% or your normal stake and it moves 10 points, you add more and the signal fails. so you close at +5 points i.e evens money wise if you had entered equal amounts minus if you had added more. But if you have entered normal stake at entry you end up +5??

 

[bonsai]

100 is possibly waiting for confirmation that $ has bottomed
as well as S&P issues.

doesnt affect 250 in the same way ?

 

[Hooya]

holding..but data soon

 

[mully]

Hooya,
"I view the entry as the lowest risk
exposure at that given time"

This assumes you think you are correct.
Very, very dangerous.

90% of traders think that they are correct, yet 90% fail.


If you turn around the "correct" view, you are already prepared for losses [so taking them is easy]
and you are in the minority camp and
thus have dramactically improved your chances of success.

Think about it. Why do what the vast majority of people do [since we know they are unsuccessful] and yet expect to beat the them!!

As Bonsai keeps on reminding us

The market can do anything.

 

[Hooya]

I am prepared for losses...I have evaluated where to put my stop and as I have said before I have no expectaions to the trade either wins or losses. I can only go on what my charts or signals have told me to. There's one thing having a money management
system that helps you survive but it's another that takes away profit when you are right?

 

[barjon]

mully

ah, the chance to talk about both scaling in and pyramiding

I don't necessarily have that total exposure but may do (or even
more) if pyramiding on continuation signals come into play.

As I said, for me the first move is often the best. Thus, I enter a
full position on the first signal (but I may scale it in a la hooya
over a few days if the action looks scrappy). When and if I get a
continuation signal I will add half a position (stop losses
adjusted to ensure a profit overall a la bonsai - probably some
has already been taken by this stage anyway). I will do the
same again on a further continuation signal. Any further
continuation signals I will add a quarter position. 4,2,2,1 ......

Course, the first position may have already been closed in total
before a continuation signal arrives. So, if I want to go again it's
a "new" trade but I still only take half a position since it's still
a continuation of the trend signalled initially - hope that makes
sense

Also some moves never have a continuation signal so any
thoughts of pyramiding never occur!!!

jon

 

[Hooya]

gdp slows therefore less likely rates should go up next month etc etc..so shouldnt they like this

 

[bonsai]

Oh look !

its 1.30 - set up time -

 

[barjon]

winners & losers running 67:31 for the 100 but only 6:8 for
ftse 14.

ps: no-ones commented on whether a 5pp on wave 1 adding
10pp on wave 3 then 5pp on wave 5 is a viable principal in the
EW example. Just a rubbish thought then?

 

[bonsai]

gap up on the £

oops
keys too close together

 

[bonsai]

barjon
there are endless variations for endless different reasons
at different times (in the wave pattern) for different strategies.

if you have it try the mag ?

feb 2003

 

[Hooya]

sounds risky Barjon as you have to assume you have the wave count right? and often you can not be sure and if you are relatively new to this ew stuff like me you will get it more wrong than you will
get it right imo.

 

[Hooya]

an abc of the highs to 61.8% of this mornings range mmmm?

 

[barjon]

yes! I wasn't thinking of doing it - I can't even begin to
identify the waves!!! Just thinking about the viability of that
sort of strategy depending on the usual patterns you experience.

bonsai - did read the article at the time, have to dig it out again
if it's not been binned.

 

[Hooya]

it's unlikely imo you will be holding long still on a wave 2 pull back other than in a very short time frame i.e 1 min chart. Probably would have closed or been stopped out on a trailing stop basis?

 

[Hooya]

I see the dax has come off a bit

 

[bonsai]

true, but they don't like cold steel up 'em !

lol

however it's not looking all that perky here.

all points south ?
for now