Best Thread How To Make Money Trading The Markets.

[amit1986]

Hi Richard,

Could you please mention a couple of stocks that you traded profitably using this method on Friday, November 13, 2009? You don't have to mention entries/exits or even post charts as I can see this myself on eSignal, but just the ticker symbols.

Thanks,

Amit

 

[Mr. Charts]

Hello Amit,
I have 12 set ups I use, not just the single one described on this thread and I can't remember which particular set up I used on which particular stock on Friday. I hope you don't mind but it would take me too long to go back over every single trade I did on Friday to see whether I had used this particular set up or one of the other 11.
I just don't have the time for that.
Good trading to you tomorrow,
Richard

 

[Nooney7]

Hi Richard,

Firstly thanks for what you have shared on this thread. The 'simplicity' (of this method as opposed to execution perhaps) is really attractive as, being new to trading, the multitude of indicators/strategies can often be confusing.

I was wondering what a good starting trading fund/ capital base would be? You use the example of 1000 shares in some of your past trades so if the particular share you were buying/ selling was $50.00 does that mean you need $50,000 in your account? I know that with FX you can utilise leverage/margin however does this apply with US shares?

Any advice would be much appreciated,
N

 

[dvdh]

Hi Richard,

Firstly thanks for what you have shared on this thread. The 'simplicity' (of this method as opposed to execution perhaps) is really attractive as, being new to trading, the multitude of indicators/strategies can often be confusing.

I was wondering what a good starting trading fund/ capital base would be? You use the example of 1000 shares in some of your past trades so if the particular share you were buying/ selling was $50.00 does that mean you need $50,000 in your account? I know that with FX you can utilise leverage/margin however does this apply with US shares?

Any advice would be much appreciated,
N

Hello Nooney7,

on US equities you also get margin.
There's a minimum of $25k to be able to daytrade, because of the Pattern DayTrade Rule. But you get 4:1 leverage on a Reg-T Margin account.

In my opinion you need at least $30k to trade US equities.

-Dave

 

[Mr. Charts]

Thanks for that, Dave.

Many people who don't have $25k trade US stocks using spread betting and CFDs and these work well on intra day swing trades though profits are going to be less due to the spread on SB and CFDs, and with some firms the charge per trade. They are not good for volatile stocks, but slowly moving ones and low ATR stocks present good opportunities.

You can trade whatever number of shares you have margin for, but I advise people to start off (after extensive testing for themselves and paper trading first ) trading small numbers of shares till they gain experience.

Richard

 

[amit1986]

Check out PARD before the market opens. Talk about gettin' hammered pre-market.

 

[Nooney7]

Thanks Dave, Mr Charts for the responses. Better start saving....

 

[tradespreads]

Hello Nooney7,

on US equities you also get margin.
There's a minimum of $25k to be able to daytrade, because of the Pattern DayTrade Rule. But you get 4:1 leverage on a Reg-T Margin account.

In my opinion you need at least $30k to trade US equities.

-Dave

Careful with this sort of advice. If Newbies start taking positions worth $100-120K..

 

[Mr. Charts]

dvdh is certainly not saying that.
He is referring to the US regulations for direct market access which is completely different.
When you start trading US shares LIVE you start small, maybe for example 100 shares of a $20 stock with a maximum stop loss of 10c; you are then risking $10. That's the way (after testing and then paper trading) you gain cheap hands on experience.

 

[Mr. Charts]

Of course you are not risking $2000 by trading 100 shares of a $20 stock, you are risking the number of cents of your worst case stop loss times the number of shares.
When I see people I also give them a set of metrics to achieve before they slowly and gradually increase position size in low volatility stocks. Position sizing is also related to other factors, obviously.

 

[dvdh]

Careful with this sort of advice. If Newbies start taking positions worth $100-120K..

I'm not giving advice in my post. The OP asked if there was margin on US stocks like there is on Forex. That's all I explained.

There is a minimum of 25k for direct access traders to DAYTRADE US Equities.
So in my opinion you need 30k, to give yourself a 5k buffer.
Of course you can use CFD's or spreadbetting, but you'll lose a lot of edge, because there's bigger spreads, no level II etc.

And no newbie should even consider using margin/leverage, until he has a steady performance.

-Dave

 

[BTippen]

Thanks Dave, Mr Charts for the responses. Better start saving....

sorry to hijack your thread Richard (I hope you are well).

Nooney you can pattern daytrade with less than 25k by being part of a prop firm like the 1 i am part of (not that i dont have 25k lol).

The group i am with have different packages all of which come with continuous mentoring and support from professsional traders who are also part of the group. We trade with the firms money and the firm is protected by the deposit you place. So for example, if you trade stupid and lose all of your deposit you are out.

Also once you get profitable you get access to commission structures that the average retail trader cant get because you benefit from the groups total share volume.

Contact me if you want further details: [email protected]

good luck with what ever you decide,



Ben

 

[Mr. Charts]

No problem,Ben. I hope you are well too.
Best wishes,
Richard

 

[Nooney7]

Thanks for your advice Ben, at the moment I am working full time so I had hoped to give this a try during the latter stages of the US market afer work. For the moment I think that despite its shortcomings I will try spreadbetting with very small amounts to get a feel for what to look for and how to execute etc.
N

 

[Mr. Charts]

Here's one from this afternoon, a dollar + run using just this one technique.
I'll elaborate when time allows - I'm looking for more opportunities at the moment.
Entry on the red X hairs as usual, image taken at time of exit as usual.
+$1.14 per share.
Richard

 

[Mr. Charts]

So, what was the risk at entry?
ATR 13, top of candle 6 cents away. I chose the latter as my risk. I normally play ultra safe in deciding position size, but a loss of 7 cents would have suggested I might have been caught in a bear trap, so why wait to lose more before exiting......
Let's say your personal maximum risk per trade is $100, that being the sort of loss you find acceptable.
100 divided by 0.07 =1428
Round down to 1400 shares (meaning maximum loss $98).
Trade result +$1.14 per share x 1400 = +$1596 profit.
That's the kids' Christmas pressies sorted in a nine minute trade............
Richard

 

[Mr. Charts]

This is what happened later.
The exit worked well.

 

[timsk]

That's the kids' Christmas pressies sorted in a nine minute trade............

My parents popped their clogs quite a while back. The inlaws filled their shoes for a while before they too departed the mortal coil. So, once again, I'm an orphan. Perhaps you're the answer to my prayers Richard, as I'd be more than happy to be adopted by you!

Tim
PS. Sweet trade btw.

 

[Mr. Charts]

My parents popped their clogs quite a while back. The inlaws filled their shoes for a while before they too departed the mortal coil. So, once again, I'm an orphan. Perhaps you're the answer to my prayers Richard, as I'd be more than happy to be adopted by you!

Tim
PS. Sweet trade btw.

You'd probably be better off asking Madonna or, much, much better, Angelina..........who could provide a seriously Jolie Christmas present every day
Richard

PS For those that love failure........I traded seven times this afternoon, 5 wins, 2 losses and one of the two losses was using the technique on this thread losing 6c on CTV (5 of the 7 trades were using other set ups and triggers).

 

[amit1986]

Great trading Richard! It seems like the best opportunities arise in the first half hour of the market open!

Amit