Spread Betting the Wall Street Rolling Daily

[barjon]

Mo

Just back from France and popped in to see how your week had gone

Like a free-climbing rock athlete with a death wish you refuse to use a climbing rope and pitons on one of the most hazardous rock-faces in the world. You seem to have lost your footing on the last traverse, but let's hope you chance upon a hand hold even though you are slithering down the face with your eyes shut.

Reading through your journey there is a huge dichotomy between how you act when the move sets off in your favour and when it doesn't. In your favour and you pay close attention to the price action and you are making reasoned decisions minute by minute - you are using the one minute chart you say - about the dangers you see which persuade you to take your profit or otherwise. Initial move against you, though, and you just shrug your shoulders and ignore the price action altogether until such times as it's in your favour again (if it does you that favour!!).

Doesn't that strike you as odd, to say the least?

If you reckon your reading of the price action is good when things have gone your way, then it should be equally as good when they haven't. Conversely, if your reading of the price action is rubbish (and just a rationalisation for taking a bit of profit when it appears) then why not apply the same criteria to your "in favour" trades as the "out of favour" ones - ie: just shrug your shoulders and wait for it to make 100 points (say).

cheers

jon

 

[mobanded]

Looks like your luck ran out, Mob.

Hi Ross Spur

I agree my "luck" was out yesterday but it is not the end of my system. That happens if the Dow hits 10241 for this particular trade.

My current situation is that I had a running profit of £1680/168 pips at start of play yesterday (Friday, 27 August - Day 6). During the day I accummulated a further £350/35 pips making my running profit, £2030/203 pips before I hit /missed a "wrongun". At the Dow close of play last night (9pm UK time) my trade is reflecting a loss of £1170/117 pips.

So, the actual account arithmetic is this: £2,030/203 pips less (temporarily I hope) £1170/117 pips leaves me with an existing profit of £860/86 pips.

My system accepts a self imposed stop loss of £2000/200 pips therefore the system arithmetic is this: Started the last trade with £2000/200 pips; it is now showing an ongoing loss of £1170/117 pips leaving a further maximum loss of £830/83 pips.

I don't think I'm in a particularly bad position but must admit I am not ecstatic. I take the good with bad.

Mobanded [COLOR]

 

[mobanded]

Could gap down over the weekend. Besides, it will have to run against him another 100 points or so just to take out his initial stake. If he includes what he has made as well, then a lot more.

Hi Shakone

If the Dow hits 10241 I am out, but I will not add and existing profits.

Mobanded

 

[mobanded]

Could also gap up. I think Mob said earlier that he withdraws profit to keep the pot at £2k, so the effective stop isn't that far away. Friday's steady rise could indicate that the bad news has been factored in again, in which case the Dow might not get near 10k for a while.

Hi Ross Spur

You paint a possible scenario but I am sure you could also brush up an equally possible opposite.

83 pips is what I have to play with.

Mobanded

 

[mobanded]

Mo

Just back from France and popped in to see how your week had gone

Like a free-climbing rock athlete with a death wish you refuse to use a climbing rope and pitons on one of the most hazardous rock-faces in the world. You seem to have lost your footing on the last traverse, but let's hope you chance upon a hand hold even though you are slithering down the face with your eyes shut.

Reading through your journey there is a huge dichotomy between how you act when the move sets off in your favour and when it doesn't. In your favour and you pay close attention to the price action and you are making reasoned decisions minute by minute - you are using the one minute chart you say - about the dangers you see which persuade you to take your profit or otherwise. Initial move against you, though, and you just shrug your shoulders and ignore the price action altogether until such times as it's in your favour again (if it does you that favour!!).

Doesn't that strike you as odd, to say the least?

If you reckon you reading of the price action is good when things have gone your way, then it should be equally as good when they haven't. Conversely, if your reading of the price action is rubbish (and just a rationalisation for taking a bit of profit when it appears) then why not apply the same criteria to your "in favour" trades as the "out of favour" ones - ie: just shrug your shoulders and wait for it to make 100 points (say).

cheers

jon

Hi jon

I have an aviary with 8 cockatiels, 10 canaries, 6 bengalese finches and a couple of zebra finches. All of these birds are handreared by myself (except the parents of course) and they are very friendly. I reserve Saturdays to not only clean out the avary and replace the food but to relax in the company of friends (sad or what). Today I will spend some of that time thinking about what you have said and seeing if I can find somewhere in my system to incorporate your suggestions. Will be in touch.

Mobanded

 

[mobanded]

Mo

Just back from France and popped in to see how your week had gone

Like a free-climbing rock athlete with a death wish you refuse to use a climbing rope and pitons on one of the most hazardous rock-faces in the world. You seem to have lost your footing on the last traverse, but let's hope you chance upon a hand hold even though you are slithering down the face with your eyes shut.

Reading through your journey there is a huge dichotomy between how you act when the move sets off in your favour and when it doesn't. In your favour and you pay close attention to the price action and you are making reasoned decisions minute by minute - you are using the one minute chart you say - about the dangers you see which persuade you to take your profit or otherwise. Initial move against you, though, and you just shrug your shoulders and ignore the price action altogether until such times as it's in your favour again (if it does you that favour!!).

Doesn't that strike you as odd, to say the least?

If you reckon your reading of the price action is good when things have gone your way, then it should be equally as good when they haven't. Conversely, if your reading of the price action is rubbish (and just a rationalisation for taking a bit of profit when it appears) then why not apply the same criteria to your "in favour" trades as the "out of favour" ones - ie: just shrug your shoulders and wait for it to make 100 points (say).

cheers

jon

Hi jon

I realise and agree with the logic of what you are saying, specifically with regard to stop losses. However, my main problem is that I have lost so much money in the past by using them religiously (only to find that a lot of them have later returned to profit when the market has turned); I therefore no longer use them in the accepted sense. If I can find a simple system for getting out of losses at an appropriate time (dosen't everyone want one) then I will consider it.

There are so many contributors who tell me I am doing wrong by not having a stop loss that I would be foolish not to consider their views.

So, I will start with T2W forum on stop loss analysis and see if anything can change my mind. I must admit, having played with Candlestick analysis in the past, it may be worth looking at a different timeframe to my one minute setup, but I will try to keep an open mind.

Thanks for the post, in the meantime I am looking forward to the remaining few days of my system live trial.

Regards
Mobanded

 

[redart]

Im not really one to judge, because I tend to trade in a very similar way.In my experience, using stops just means that my account slowly bleeds every week.

NOT using stops gives me a way to pretty much guarantee turning a small acount (few hundred quid) into a grand or so. I've done this a good few times.

However, is ALSO guarantees that you WILL blow the account at some point!

No matter how good you are, at some point you're gonna be on the wrong side of a huge huge move and it wipes out the account.

I guess its OK to trade like this if you're like me and are just trading small stakes to make a bit of pocket money, although if one is looking to make a living from trading, you'd need to be trading at decent size stakes, and that is when having no stops will wipe you out within a few days of being on the wrong side of a move.

 

[timsk]

Yes indeed, redart. Spot on IMO.

mob',
Your thread is fun and interesting and I wish you all the best. However, without wishing to sound dismissive, I'm afraid it doesn't prove the efficacy of your system for the reasons redart mentions. You might do very well over the 10 day trial - and for a good few weeks or months beyond - but, sooner or later, I think a complete blow up is almost inevitable. Again, without wishing to be patronising, T2W is littered with strategies - even ones claiming 100% success rates - and guess what their common dominator is? Yep, almost all of them use either spectacularly wide stops or no stops at all. I've met a lot of pro' retail traders over the years but, to date, I've not met a single one that trades without using stops. In fact, their common denominator is the ability to cut losing trades very quickly to ensure that losses are kept to an absolute minimum. Sorry if it feels like we're all ganging up on you - but we have your best interests at heart!

Tim.

 

[barjon]

Mo

Hope you enjoyed the day with your feathered friends yesterday - I've been busy feeding Red Kites in the garden this morning.

There's certainly nothing more galling than seeing price bound away in the direction you wanted immediately after your stop-loss is hit. (Closely followed in the galling stakes by price hurtling off again immediately after you've exited).

However, you seem to have faith in your "direction" indicator and you will know the percentage probability of it being right or wrong - for the sake of argument let's say it's 70% right 30% wrong.

So:

day 1 - it signals long and you enter accordingly. It is a wrong 'un and price falls.
day 2 - it signals short, but you are long from the day before so ignore it - this means you only have a 30% chance of recovering your long losses and a 70% chance of those losses increasing. But, if you close the long and go short you have a 70% chance of making a profit and recovering at least part of your previous long losses.

Doesn't that make sense?

jon

 

[mobanded]

Im not really one to judge, because I tend to trade in a very similar way.In my experience, using stops just means that my account slowly bleeds every week.

NOT using stops gives me a way to pretty much guarantee turning a small acount (few hundred quid) into a grand or so. I've done this a good few times.

However, is ALSO guarantees that you WILL blow the account at some point!

No matter how good you are, at some point you're gonna be on the wrong side of a huge huge move and it wipes out the account.

I guess its OK to trade like this if you're like me and are just trading small stakes to make a bit of pocket money, although if one is looking to make a living from trading, you'd need to be trading at decent size stakes, and that is when having no stops will wipe you out within a few days of being on the wrong side of a move.

Hi Redart

Someone after my own heart. I agree with everything you say and I acknowledge that one day my system will be wiped out - but only to a maximum of 200 pips.

The first two weeks of my trading this system at £10 a point made me over £2,000.

When I decided to start this thread, my basic account was using only £2,000 (money I had made in the previous two weeks), so , if I lost the lot I would not be showing an overall loss.

As it happens my current bet position is showing a £600+ profit plus my original £2,000, and that is having a live short trade open which is currently £1,170/170 pips down.

IF (I accept it is big) I continue making money every 10 trading days then the practical certainty of an eventual loss, I can live with.

Mobanded

 

[Ross Spur]

Mob: you mention losing so much money in the past using stops. If you don't mind saying, how much did you lose (presumably it was much more than £2k), and what sort of bet size and strategy were you using?

 

[mobanded]

Yes indeed, redart. Spot on IMO.

mob',
Your thread is fun and interesting and I wish you all the best. However, without wishing to sound dismissive, I'm afraid it doesn't prove the efficacy of your system for the reasons redart mentions. You might do very well over the 10 day trial - and for a good few weeks or months beyond - but, sooner or later, I think a complete blow up is almost inevitable. Again, without wishing to be patronising, T2W is littered with strategies - even ones claiming 100% success rates - and guess what their common dominator is? Yep, almost all of them use either spectacularly wide stops or no stops at all. I've met a lot of pro' retail traders over the years but, to date, I've not met a single one that trades without using stops. In fact, their common denominator is the ability to cut losing trades very quickly to ensure that losses are kept to an absolute minimum. Sorry if it feels like we're all ganging up on you - but we have your best interests at heart!

Tim.

Tim

What I find most difficult to do is not, getting out of a losing trade, but the timing of it. In reality I have read many times that pro's have no problem closing a losing trade - I could do that if I had the confidence of some form of system or infomation that would convince me to get out. I would think that most pro's have probably got access to many more resources (and expenditure) than I can afford so I am stuck with my own decisions.

The majority mentality of fixed percentage stop losses, known supports and resistance, and other well known indicators are not for me.

At the moment I am doing reasonably well and the day is never going to come when this system will show a Nett loss for me personally. My rules are specific in that I will (no doubt at all) close a trade if ever my mind controlled 200 pip stop loss is breached.

I do not know if I stop myself out (because it has never happened before using this system), whether or not I will dip into my profits to restart the system - suppose in the end it will depend on how much I have made and what my confidence state it.

Mobanded

 

[mobanded]

Mo

Hope you enjoyed the day with your feathered friends yesterday - I've been busy feeding Red Kites in the garden this morning.

There's certainly nothing more galling than seeing price bound away in the direction you wanted immediately after your stop-loss is hit. (Closely followed in the galling stakes by price hurtling off again immediately after you've exited).

However, you seem to have faith in your "direction" indicator and you will know the percentage probability of it being right or wrong - for the sake of argument let's say it's 70% right 30% wrong.

So:

day 1 - it signals long and you enter accordingly. It is a wrong 'un and price falls.
day 2 - it signals short, but you are long from the day before so ignore it - this means you only have a 30% chance of recovering your long losses and a 70% chance of those losses increasing. But, if you close the long and go short you have a 70% chance of making a profit and recovering at least part of your previous long losses.

Doesn't that make sense?

jon

jon

What you say makes sense but it is hypothetical from my point of view - I have never, that I can think of, been in a situation where my system has indicated trading in the opposite direction to my overnight open trade. I stand to be corrected but the only time I remained in a trade overnight was going short the Dow (a wek last Friday) and the following Monday morning my system confirmed going short for that day.

Tomorrow morning may be the time when my open trade from last Friday is in conflict with my system; I don't know. Even if it is I feel in all honesty that I will leave my trade extant (otherwise what is the point of using a system). If I am not going to follow it, and my beliefs, I may as well give it up.

Mobanded

 

[mobanded]

Mob: you mention losing so much money in the past using stops. If you don't mind saying, how much did you lose (presumably it was much more than £2k), and what sort of bet size and strategy were you using?

Ross Spur

I can confirm it was an expensive "do" but that is all. Discussing my shaking, praying, wishing, hoping, trading scenaria from those days is firmly in the past and will remain there.

Mobanded

 

[barjon]

jon

What you say makes sense but it is hypothetical from my point of view - I have never, that I can think of, been in a situation where my system has indicated trading in the opposite direction to my overnight open trade. I stand to be corrected but the only time I remained in a trade overnight was going short the Dow (a wek last Friday) and the following Monday morning my system confirmed going short for that day.

Tomorrow morning may be the time when my open trade from last Friday is in conflict with my system; I don't know. Even if it is I feel in all honesty that I will leave my trade extant (otherwise what is the point of using a system). If I am not going to follow it, and my beliefs, I may as well give it up.

Mobanded

Mo

OK - I must have misunderstood your system. I thought it was giving you the daily direction since you were giving a daily forecast.

jon

 

[Ross Spur]

Ross Spur

I can confirm it was an expensive "do" but that is all. Discussing my shaking, praying, wishing, hoping, trading scenaria from those days is firmly in the past and will remain there.

Mobanded

Fair enough -- I try to forget about many of the things I did when I first started trading.

 

[mobanded]

Mo

OK - I must have misunderstood your system. I thought it was giving you the daily direction since you were giving a daily forecast.

jon

Hi jon

You have not misunderstood my system. The daily indictor gives me the incentive to get in to a trade. However, I have a strict rule of not closing any trade (unless I go 200 pips down); so if such a trade is open at the time I take the following day's forecast, then the open trade takes precedence over the forecast (but only until such time as I can get out with a profit).Plain as mud!

I haven't yet had a situation were a conflict has arisen, but if there was, the open trade will take precedence.

Mobanded

 

[barjon]

Mo

mmm, let's make sure I've got this right.

Your daily indicator gives you direction for the day, or is it for the next major move that day, or for the next major move which may stray over several days, or what?

I'm not prying to find out about your indicator, by the way. It's just that I'm struggling to see the relationship between your indicator and your actual trading (as you have reported it).

jon

 

[mobanded]

Mo

mmm, let's make sure I've got this right.

Your daily indicator gives you direction for the day, or is it for the next major move that day, or for the next major move which may stray over several days, or what?

I'm not prying to find out about your indicator, by the way. It's just that I'm struggling to see the relationship between your indicator and your actual trading (as you have reported it).

jon

My indicator gives me a direction which I will follow for a day (but only if I have no existing open trade). It will give an indication of the direction at any time that I so choose. I have given previously my reasons for not using the indicator more than once in a day. The secret to it is two fold - knowing how the indicator calculates what it does, and, having the exact time to take the indication. If anyone can figure out what I am doing from that brief resume then good luck to them.

The indicator does not give a forecast of the duration or density of the move.

Although I am giving my indicator result between 9am and 10 am, I could be in possession of this information quite some time before that or not. I never trade between 8am and 9am simply because the experts tell me only fools etc do that!

I haven't told any deliberate lies with the answers I have given to questions on this thread, however, if anyone has, to my mind, come close to identifying my initial indicator I have been, perhaps, economical with the truth.

Hope this is as vague as I intend it!

Mobanded

 

[Ross Spur]

My indicator gives me a direction which I will follow for a day (but only if I have no existing open trade). It will give an indication of the direction at any time that I so choose. I have given previously my reasons for not using the indicator more than once in a day. The secret to it is two fold - knowing how the indicator calculates what it does, and, having the exact time to take the indication. If anyone can figure out what I am doing from that brief resume then good luck to them.

The indicator does not give a forecast of the duration or density of the move.

Although I am giving my indicator result between 9am and 10 am, I could be in possession of this information quite some time before that or not. I never trade between 8am and 9am simply because the experts tell me only fools etc do that!

I haven't told any deliberate lies with the answers I have given to questions on this thread, however, if anyone has, to my mind, come close to identifying my initial indicator I have been, perhaps, economical with the truth.

Hope this is as vague as I intend it!

Mobanded

Now I'm sure you're reading tealeaves.