You can be in the 3% that make a consistant profit [Archive]

tech/a

4th-November-2004, 03:58 PM

OK.

If you follow the crowd youll just be part of it.
Lets face it to be in the 3% youll have to be doing something different to the other 97%

Lets start with what we "THINK" can make us profitable.

Analysis.
Fundamental or Technical.
Niether are exact sciences and neither can be guarenteed to deliver a profitable trade.

ALL they do is give us a starting point.
Now it maybe percieved that that starting point has a higher probability of success than any other but the reality is that even if its worked 99% of the time THIS ENTRY maybe the one that fails.

So regardless of your analysis the best it can do is give you a point to start.
It cannot GUARENTEE profit.
It can narrow your field, supply you with higher probability prospects or Percieved higher probability trade setups.

Its not the analysis which will determine your profitability.It will however give you a place to start.(Arguably better than Random).

Next topic ENTRY.

tech

still_in_school

5th-November-2004, 02:01 PM

Hi Techa,

i like your post and find them informative, but there is something i have honestly learnt and to be quite honest, another reason why some investors/traders do so well is,

that opportunity is brought to them....

but, i just want to share some stories of my own and other people ive seen.

my first story, and can be reflected by many traders/investors is deals brought to them by there broker...

when i first started out trading, with a different broker to whom my step dad used (the guy, i like to call rich dad, and my real dad poor dad.)

what i did find was, that the quality and service of my broker, was quite average, and not too great, but due to over time, and becoming one of his higher net worth clients, the service is completly different, and what i mean by this is, instead of me calling for trades, my broker instead calls me and suggests to me which trades to do and even calls me up on when to exit.

(this is what i mean by opportunity being brought to you) but i can guarantee you, before this, and when i was only getting to know my broker, the trades we were doing were very average, conservative and kinda boring... with little or no return...

though, i have friends, who arent quite traders, but more the type as investors, the trades there broker brings to them, is very conservative, and trades, that normally i woundnt do...

one thing i honestly believe about trading, and this is with your broker, the more net worth, the more probability, you will have more profitable trades than the average trader/investor.

Cheers,
sis

sorry to interrupt your post, but please continue, as your posts are quite interesting to read and learn from... just wanted to point out, why some traders are more successful, in this other reason being.

tech/a

5th-November-2004, 06:29 PM

ENTRY/S and STOPS.

Even applicable to "TIPS from Brokers,mates,cabbies"

Most traders spend hrs if not weeks and months attempting to find or formulate "The Perfect entry".
Their thoughts are 'If I can "Time" my entry Ill be immediately on a winner.'
Realisation that even with months of research that success still cant be guarenteed, comes often amidst great frustration.Some have such conviction in their ENTRY that they will not admit that the market has proven them wrong.
"Many Bottomdraw" stocks are born here!

Understanding that youll often be wrong about your entry in particular the timing of it is a huge leap toward succesful trading.Further understanding that you dont have to be and infact can still trade very profitably being wrong more often than right,will put you way in front of the bottom draw traders.Preserving your capital will keep you in the game!

So the question that now arises is "When am I wrong in my entry".At what point do you stand back and say "got it wrong"!
We can all associate with the feeling that as soon as you take your losses the stock will turn and run in your direction.

In reality I have tested extensively at what point is there more chance that the trade will continue against us than turn for us into a profitable trade.I use a set % stop. There are all sorts of "boutique" methods of setting stops to help maximise the return on your investment.

Using 10% of equity a stop af 10% of Purchase price is 1% of intial capital.

IE if a stock is $1 then the stop is 10C or .90c.
If your using 20% of equity then your risk on the trade is 2%

Now I have tested (and you should too to see if you concure) various % stops.
1% to 3% is too tight whipsaws are most likely, trades need more room than that.
4% to 8% are the most likley range that price could turn back in our direction if its going to.
Beyond 8% the chance of a reversal from its downward spiral is pretty close to zero.

The amount of capital risked on each trade becomes important when we have a string of losses.This will happen and undisciplined traders can find themselves short of trading capital if risking to much.Knowledge of historical maximum number of losses in a row is handy information to have of your trading method.Most methods breakdown when youve lost more than 50% of initial capital as the dynamics of how you would trade (Number of positions and position size) would be forced to alter due to lack of funds.

Lets look at another dynamic.
Before entry YOU have 100% control of your capital.
Once the order is filled the MARKET has 100% control of your capital.
If you execute your stop YOU have then GAINED 100% control of your capital.

By accepting a 1-2% loss you remain in control of your capital to live again.NO CAPITAL and its GAME OVER.

Another Statistic.
Of the methods I know trade profitably(IE I have developed or been introduced to)maximum consecutive losses is 13.Of those I use Ive never come close to this.

Now of course if your entry kicks straight away then you will have no concern.
The market proved you right!

Short term traders need to have closer stops as they are in trades for shorter periods of time.
Their return Reward to Risk is often much less than longer term traders.They need to have more winning trades than longer term traders.They will also trade more often.
NO STOP generally is the death of the short term trader.

In summary.
An entry is a starting point it will be right or it will be wrong.On its own it WONT make you a PROFIT.
If your entry is wrong and you dont set or act upon your exit,then your entry could become the most expensive point of your trade.
To ensure success you need to protect your capital.This is done best at ENTRY.

Next topic EXITS

tech

wayneL

5th-November-2004, 07:26 PM

>>Their return Reward to Risk is often much less than longer term traders.They need to have more winning trades than longer term traders.<<

Just one short term traders stats;

Win/loss 56%
risk/reward 3.4:1

I have been pretty consistant with this for about 3 years.

But a lot of short term traders...particularly day traders, have risk/rewards as low as 1.5:1 (after expenses)

They do alright (the profitable ones) because of the shears number of trades... sometimes dozens of trades per day.

tech/a

6th-November-2004, 10:26 AM

Wayne.

Wonder if you can help me a bit.

While Im attempting to keep this as simple as possible, from here on explaination becomes a little more complex.

I am intending to use stats from the Longer term method which I know works (techtrader) and am wondering if you have the following info on your short term method so I can include this as a secondary veiw.If you havent got the detail no problem.I dont know if you trade Stock or Futures but likely futures so Pips rather than $ value would suffice.
Pip value would be also needed.

(1)Average Winning trade.
(2)Average losing Trade.
(3)Maximum consectuive losses.
(4)Average no trades/ (whatever----your timeframe).
(5)Average days/hrs in a winning trade.
(6)Average Days/hrs in a losing trade.
(7)Average positive risk reward ratio
(8)Max % drawdown (relative drawdown as against peak to valley).

Thanks.

To those watching dont be daunted by the above all will be kept in a clear and concise manner.I urge you though that if you have any questions no matter how simplistic please ASK.
My aim is to help you become a more profitable trader.

tech

RichKid

6th-November-2004, 02:36 PM

What is a 'pip'? Last time I heard of it was in a Sherlock Holmes' Adventure- The Mystery of the Five Orange Pips- well there, you learned something...

tech/a

6th-November-2004, 04:25 PM

Pip is similar to a tick.(Tick is refered to in stocks---Tick chart,Ticker tape).

Its any increment of chart movement relative to a Commodity/Index or Future.Pip value alters with the instrument being traded.

tech

stefan

8th-November-2004, 10:23 AM

Understanding that youll often be wrong about your entry in particular the timing of it is a huge leap toward succesful trading.Further understanding that you dont have to be and infact can still trade very profitably being wrong more often than right,will put you way in front of the bottom draw traders.Preserving your capital will keep you in the game!Very well put indeed! Almost worth framing.

Happy trading

Stefan

wayneL

9th-November-2004, 02:51 AM

Tech,

I don't keep all that info on my P/L spreadsheet.

But it wouldn't be too much work to construct at least some of that. Will see what I can do.

tech/a

9th-November-2004, 06:11 PM

Just thought (Dangerous!).

Some may find it benificial to go into explaination of each of the area like
Risk reward Ratios
Drawdown
Consecutive losses.

Etc as I go through the process.All are important to the serious trader.
All will also gel as time goes by unfortunately things may seem a little disjointed as I work through the process.

Im always aware that few have the software I do so I will where possible post charts with explaination and tables.
I also have some free software which you may find helpful.

So my question to you all is would you find a more indepth tutorial more benificial.Remembering that this thread will be around a while and hopefully new people will get use out of it and we can bump the number of profitable traders up to 4%!!

So we dont fill this thread up with un related discussion perhaps sending me a private reply would be more appropriate.

Thanks
Tech

pete152

9th-November-2004, 09:13 PM

Mate if you have some free soft ware i would be interested in that,as I is the price I like!!
Any way I may be able to use it to expand my knowledge.
Peter

bruham

9th-November-2004, 10:16 PM

G'day all,
First posting. Here goes. I've been trading for approx. one year, and done reasonably well. I use my made up programme and don't read anything to do with how you trade this way or that way etc.
I don't want anything to destroy my trading method. Not even using experts software. My programme is very childish, it works for me.
The less I know about everyone's systems the better!
A couple of years ago I created a new way to build wealth through share buying. It was my original idea. Only thing wrong with my idea was the fact that Ben Graham thought of it in the 1920's. Damn!!
In the year that I've been trading I've not lost one penny, so I'm pretty pleased with myself.

bruham.

stefan

10th-November-2004, 09:31 AM

bruham,

I have no intentions of being a smart ass here, so please don't get the wrong idea.

In the year that I've been trading I've not lost one penny, so I'm pretty pleased with myself.You will have to ask yourself whether this result was due to your knowledge of things or because the market was rather forgiving over the last 12 months and turned everything you touched into gold. In my view it's of little benefit to trade profitable for a year during which almost anything had a run. It will give you the false impression that your system is working when in fact even a monkey could have made money (There was an experiment where they had monkeys buy and sell shares to compare the results with the professionals).

My programme is very childish, it works for me.Again, are you really sure it works?

The less I know about everyone's systems the better!I can't support that statement. It rather indicates that you don't have the knowledge and experience to analyze other systems to see if they work or not, so you decide to ignore them completely, fearing you may get confused. That's fine, but what are you going to do once you find out that your own method wasn't that good after all? You'll be stuck. Sorry to say, but you're on the highway to trading hell and you don't know where the breaks are.

Once this market turns sour, you will find yourself stranded with 4 flat tyres and no knowledge of how to change them and even if you did you wouldn't have a single spare with you.

Ignorance is bliss... Until you get the wake up call.

Happy trading

Stefan

tech/a

10th-November-2004, 09:45 AM

Stef

97% of people veiwing this tutorial will gain nothing from it.

Simply the tutorial is not targeted at those people.

tech

stefan

10th-November-2004, 10:02 AM

tech,

97% of people veiwing this tutorial will gain nothing from it. Simply the tutorial is not targeted at those people.
Hang on, it should be 96% because you aim to increase the 3% to 4% :D

Anyway, it won't change the core message you had in mind and I have to agree with you. (Damn, that's hard.. ;) )

Happy trading

Stefan

tech/a

10th-November-2004, 02:39 PM

(Damn, that's hard.. ;) )

Stefan

Perhaps when you realise Im not about competing and more about sorting out the trees from the forest.

You wont find it necessary find fault.

Im always interested and take part in constructive discussion and have had a few with Wayne and hopefully more with you and others.

These little guys are clever.

:jump:

bruham

10th-November-2004, 10:39 PM

G'day Stefan,
What you say is probably right. As you said my ignorance is bliss. I hope to my advantage.
But I do know quite a lot about the companies that I trade in.
Puting me in the 3% of consistant profit earners would be a perfect dream.
Come to think of it, I'll be happy if I'm in the top 10% or 20% or 30% or 40%!!!

Stefan, thankyou for your advice. I'll take it seriously.And no, I don't think that you are a "smart ass".

bruham. : :iamwithst

JetDollars

12th-November-2004, 12:03 AM

A very interesting topic....keep going guys.....someone is reading it.

Thanks Tech/a and Wayne

sam21poddy

12th-November-2004, 01:14 PM

Re planning a stop before you enter a trade....

I trade full time and make lots of little profits that add up over time. EXCEPT three times over the last year, I have had all of my profits wiped out because I shorted a stock which never stopped rising. Now I thought I was being conservative in my trading. I watched a stock go up and up and up and then when I thought it was ridiculously high, I shorted it - only to see it rise to meteoric heights. The only reason I am still in the game is because I get lots of dividends from the shares that I happen to own when it goes ex-dividend. I have been aware of my problem of not being able to put on a stop for a long time now but I can not master it. There is something depressing about accepting that you made a mistake on a trade and taking a loss. Has anyone got any hints on how I can overcome this problem?

tech/a

12th-November-2004, 01:40 PM

Sam Ive decided to go into this as part of Risk Reward before moving on with the tutorial.

Your confession took some courage!

To help think of executing a stop loss as a

"Cost of doing business."

Failing to set or take a stop as

"Business suicide."

I know you can associate with one of these!!

tech

sam21poddy

12th-November-2004, 02:00 PM

OK. On Monday I am going to do one trade with a stop, viewing it "as a cost of doing business" and I will see if I can get through to the end of the day without the whole world falling in on me. I can't do it this afternoon because I need the weekend to work up to it. I will report back on Tuesday, win or lose.

RichKid

12th-November-2004, 03:09 PM

Re planning a stop before you enter a trade....
There is something depressing about accepting that you made a mistake on a trade and taking a loss. Has anyone got any hints on how I can overcome this problem?

I am dealing with this issue as well. My strategy is to set stops BEFORE entering a trade and sticking to it. Therefore I know my stop loss and my exit point to lock in profits. I also set criteria for when I will depart from it BEFORE I enter the trade based on technical analysis. Where I have not followed my pre-trade plan I have sufferred. By following it I may lose some profits but I can accept that.

So if you have set certain parameters before entering the trade the next issue is following it- come hell or high water. If it doesn't work change your strategy/plan/system but don't modify it for an individual trade. ie your strategy must be followed and applied consistently.

I've tried to provide a link to a recent article by Louise Bedford on how to follow stops but the ASX site is uncooperative- have a look under their investor newsletter section. But there are many ways to deal with risk (how to protect capital and how to protect profits) no doubt techA and the others will discuss these. In the end you have to find a way that you like and that works for you. I am still a beginner so my stategies/views are still evolving. Good luck.

tech/a

12th-November-2004, 03:18 PM

This "cost" should be a quantified one.
Relative to expectancy,set for your method niether to wide or to narrow.
This is the"Minimising loss"we all hear bandied around.

Ill explain more in the next issue.

still_in_school

12th-November-2004, 05:07 PM

Hi Sam21poddy,

if you cant set a stop, try setting conditional orders for exiting... personally for me, i dont set stop losses, but i do set profit targets, and hedge positions (potentially if there is a downside) but i personally i try to invest into solid blue chip stocks, that are trending or ranging (but trade on margin)...

the other problem ive found with stop losses, if your holding for long term... a stop loss, if set to tight, can stop yourself out...

also another important factor, if im trading commodities on a seasonal chart... there is no stop loss implemented at all...

*** simply over laying seasonal charts on top of each other, and entereing and exiting based on repeated history ***

Cheers,
sis

Redwing

12th-November-2004, 07:01 PM

Great thread guy's and very informative, i'm enjoying following it.

Thanks

REDWING

tech/a

13th-November-2004, 09:43 AM

Ive started another thread on Questions and Answers/Comments to attempt to keep the main thread cleaner so the gist of the tutorial can be followed:

http://www.aussiestockforums.com/forums/showthread.php?t=633

By all means comment and ask questions but rather than here do it there.

Thanks
tech/a

tech/a

13th-November-2004, 09:56 AM

Now during the last week Ive had some replies and there has been some discussion.

Whithout offending anyone GENERALLY traders here are novice.Many finding their place and trying various methods they feel in theory and at times in practice,return a profit.

The aim here (In this Tutorial) to guide traders to their own trading methodology armed with the tools necessary to make a consistent profit year in year out.

This is a multi part process one which has a logical and quantifyable conclusion each part is dependant on the other and ALONE will not reap continued success.

See anyone can turn a profit now and again infact some can turn a spectacular gain every now and again.3% do it year in year out.

Thats where I want you to be!
Because here fear goes!
Trading is fun the stress is gone!!
You GET A LIFE.

So before we move to exits I think it best to go more indepth with,Entries,Stops and firstly the "Business" of trading.

tech/a

13th-November-2004, 10:19 AM

The Business of trading.

Whether full time or Part time If you were working for me youd want to be paid.Infact if you worked after hrs youd want more as it eats into your leisure time.

So lets do some simple math.
Time spent investigating and implementing trading.
20 hrs /week----not un common.
Say $30/hr = $600
Software,computers,books, Data feeds, Brokerages IE the overheads of our business.
On a part/time basis generally equates to around $100-200/week.Work it out yourself.

So our business needs to make around $700/week to pay for our time and out goings,otherwise we are better off getting a job down the road at the pub and taking home $350 a week parttime which we can use!

Many dont even identify with this REALITY.

Now if your not or never have spent upto 20 hrs a week in this business then chances are youll fail due to lack of effort.(Every business requires time IN the business).
If you havent or cant invest $100 or so a week in planning and setting up your business then chances are youll fail purely because your business hasnt the tools to succeed.
Finally if your UNDERCAPITALISED and you dont have enough initial capital for the business to cashflow itself ,youll also fail purely because you wont have enough to stay in the game.

Lets state it very simply.
If I found you a business which you placed 3 hrs a week into and cost you $500 to buy into and suggested you need $5k to run it---------------what sort of weekly return do you think (realistically) that business could return you------------Id say very little if any.

If you wish to enjoy your trading,understanding that its NO GAME but a serious business either full or parttime will help you toward understanding that you must construct a business plan-------a profitable one based on FACT not THEORY.

As time goes on thats what we will do here! Youll have the BLUEPRINT to walk away and plan your OWN profitable business and STAY profitable.

tech

Mofra

13th-November-2004, 12:06 PM

Sam21poddy,

Welcome, just thought I'd offer a suggestion for stoplosses, one of my most common ways of setting a stoploss. I take my entry conditions, and when it is no longer valid (ie its obvious I got it wrong) I exit. For example, if one of the reasons I have entered a stock because it is trading at just above a previous support level, a break of the support level is my stoploss. If I'm riding an uptrend and the trend is broken, time to exit.

It may sound like extremely dumbed-down baby-talk to the experienced traders in here, but simply writing down your reasons for entering a trade, keeping a diary, and re-reading your entry conditions when a position moves against you can provide a powerful motivation to execute your stoploss. That, and having taken an absolute whalloping once in the past when I didn't follow my own rules (held a short put position on NCP in Jun 02 past my stoploss, will NEVER do that again!).

Good luck

Mofra

tech/a

13th-November-2004, 07:08 PM

OK.

First thing I will introduce is RISK to RUIN.
Placement and execution of stops keeps you in the game.
Firstly Ill post our master chart from where we can understand some stop placement and the consequences of where stops are placed.

Now this is a simple triangle breakout but could be any buy point in any trade either Technical or Fundamental its simply a point of buy.
There are 3 stop points which are logically on the chart from a technical veiw.
Although not shown you could have a set % risk of X% I use 10% of Initial Purchase price.

Here is the chart

tech/a

13th-November-2004, 07:31 PM

Firstly we will discuss RISK to RUIN.

This is a typical trade for the exercise we will take stop 1 and 3 only to see the difference.The closer the stop the more often youll be whipsawed out,but lets see if thats a bad thing.

Stop (1) is a 7c risk so lets say we are trading in $5K parcels(Approx) and have an initial capital of $20k.So we can buy 3000 shares.7c stop or Risk means we are risking $210 or 1.05% of our starting capital.
Our win in this case is 50C (Approx) or 7.1 times our potential loss.
This could well be a short term pattern trade.

Table 1 shows our average return if we have between 30% and 80% winners as you can see important to keep up the win ratio!

Table 2 Is quite different.here we see that with a very tight stop of 1.05% or $210 we can actually survive with an average of $105 per win provided we are right 70% of the time.
If we are not that good at picking winners and only get it right 30% of the time we need $630 each win.

So you can see that we NEED to KNOW

(1) How often we have a Winning V Losing Trade.
(2) What tha average win is.
(3) How much we will risk on average / Trade.

Take a while to look at the tables before I present the second study using the WIDEST stop in our example.
Lets see how that effects the "NUMBERS."

tech/a

13th-November-2004, 07:55 PM

Case 2 looks like this.Stop is now 38C Buy $1.80 Stop and sell is $1.42.-----Profit is still 50c
Risk / trade is now (In this case) 3000 shares X 38C = $1140.
Which is 5.7% of our initial capital.
Our ratio of winner to loss is only 1.31:1 (The sacrifice for wider stops)
GETS WORSE with NO STOP!

Now we can see just to etch out a profit we need to be right atleast 45% of the time with these types of NUMBERS.

Now lets look at Probability of Ruin.
We have to be right 60% of the time with a win of that which we risk $1140.
Even with a whopping 4:1 win size we need to be right 55% of the time AND win 4 times our stop value!

Take some time to absorb these NUMBERS.

If your having trouble building CONSISTENT profit chances are you dont know YOUR Numbers.

Now we have all heard the old adage of "Let Your Profits Run" This is actually a trade of mine but I didnt enter at $1.80 it was a little higher but for the exercise the next lot of charts will reflect this trade and profit at my exit of a cross of the Close over the 180 day ema of the LOW.

tech/a

13th-November-2004, 08:02 PM

So lets now do the Matrix as if we had let profits run

tech/a

13th-November-2004, 08:33 PM

For the exercise we will use the LARGEST stop of 38c

The NUMBERS
Same Risk 5.71% (which is higher than I would adopt,more on this and why later).
However win is 16.7 X Risk. Note the enormous difference in Table 1.

Table 2 remains the same,The win however is $19200 way off the scale for this Matrix.
If anyone wants a copy of the Matrix just email rwi@chariot.com.au and Ill send you one.

Think thats enough hopefully to spark some discussion and having you consider analysing your numbers----if you dont know keep a record of trades so you can test your profitablity.

NEXT before exits.
TIMEFRAMES

Redwing

13th-November-2004, 09:25 PM

Ok need time to digest that..

Thanks

REDWING

tech/a

15th-November-2004, 09:44 PM

Hmm I see a lot of blank and bemused faces upon the forum!!

I see a need for Summary.

(1) Stops keep you in the game.
(2) The closer the stops to your entry the more often youll be whipsawed.
(3) The further your stop is from your entry the more youll need to make on each trade.
(4) Testing (Mine do your own if you feel it necessary) shows that less than 20% of trades recover to profit from a greater than 8% decline from buy price.
(5) Approx 80% decline further than 8%.
(6) You should keep a trade report sheet on every trade so you can calculate.(After minimum of 50 trades.)

(A) Average width of stop.
(B) Average run of consecutive losers and winners (More on this later)
(C) Average trade win.

(7) If shorter term trading youll need tighter stops and a higher % of winners as your win will be only 1.5-3x your risk (Stop)
(8) If longer term trading you will have the luxury of wider stops,less winners but you must let your profits run.

Once you have all this information at your disposal youll be in the position to hone your trading.Better still youll be able to evaluate your profitability and your risk.

If your Numbers dont add up then you've some work to do.

tech

wayneL

16th-November-2004, 12:05 AM

Question:

>>(4) Testing (Mine do your own if you feel it necessary) shows that less than 20% of trades recover to profit from a greater than 8% decline from buy price.
(5) Approx 80% decline further than 8%.<<

Do you have US data Tech? I would be interested if this applies to US stocks. My impression is that this number would be greater. Perhaps double...at a guess?

ATR's exressed as a percentange are certainly much greater on US Stocks.

And a point:

>>(7) If shorter term trading youll need tighter stops and a higher % of winners as your win will be only 1.5-3x your risk (Stop)<<

Not wanting to argue the point, but I this is not "necessarily" true. Perhaps true with breakout strategies with trailing stops. But entering from support/resistance and trading to targets (with a trailing stop as a failsafe) this number can be higher. In my own case the number is 3.4:1

...certainly true with mechanical systems.

*******************

Following with interest Tech...could be a good home for some spare margin capacity.

<edit> shoulda posted this in the other thread...pardon me!

tech/a

20th-November-2004, 05:58 PM

I know there are a few following from the emails and the feed back on the thread.

For those who are now looking a little closer at the way they set their stops relative to their trades this will be a handy tool.

http://staybaker.customer.netspace.net.au/PositionSizeCalculator.html

More soon.

tech

Stockcaddy

22nd-November-2004, 12:13 PM

[QUOTE=tech/a]OK.

Lets start with what we "THINK" can make us profitable.

Analysis.
Fundamental or Technical.
Niether are exact sciences and neither can be guarenteed to deliver a profitable trade.

Its not the analysis which will determine your profitability.

tech/a

23rd-November-2004, 02:19 PM

My apologies I will no longer be posting on this site

Explaination here if interested.

http://www.aussiestockforums.com/forums/showthread.php?p=4112#post4112

All the best with your trading you should from what Ive written get an idea of how to become part of the 3% crowd.

Being successful in whatever you do only maintains financial freedom----nothing more.

Happiness comes from within.
Enjoy.

tech

stefan

23rd-November-2004, 02:36 PM

Happiness comes from within.Looks like we have at least something in common then.

Happy trading

Stefan

idribble

29th-December-2004, 12:57 PM

the holy grail does not exist, think about it, it can't exist, otherwise we would have predictible markets.

i agree that you have to do something different to be able to profit.

too many punters think they are just about there with charting, a little tinker here and a little tinker there ............. put it into practice and it doesn't work. why? because the markets are unpredictable and forecasting is difficult at the best of times but nearly impossible if the future is invloved. :D

funny mentals needs absolute faith in the quality information you are analysing. too much information not included, distorted or manipulated to rely upon it.

so how do you make a quid?

you need a selection method and exit strategy that cannot be replicated with a software program. :banghead: think outside the square to understand this message, because i firmly believe that i have the experience (after many early years of going nowhere and some decent losses) to guarantee myself "disaster free" investing and am happy to share the basics.

but in the meantime, the answer is in your selection method and exit strategy.

...... more details to follow when i have time.

idribble

29th-December-2004, 03:09 PM

an indication why looking at charts for short term trading can be misleading. have a look at the daily trades of PRE 22 Dec. anything above 2.0c was just donating to the market, although the volume and range looked good for most of the day. the small players got involved @ 2.1c and pushed it up to 2.2c and kept it @ 2.1c for the better part of the arvo.

i'll note some points for comment and criticism, in no particular order of importance.

speccies only

I day trade these

1) mainly ignore the first half hour of trading, look at what's happening near the end of the day for an indication of real interest.

2) the sellers need to be consistently taken out for the majority of the volume of the trades during the day to signal real interest in a stock.

3) don't by a stock that is in a downtrend, the odds are against you.

4) look for a stock that has formed a base, done nothing for a while and put in on your watchlist and wait for a bit of volume and strength in the price.

5) don't buy after an announcement unless it's huge and the market didn't see it coming (rare event).

have a look at the chart of OEX, there are plenty of these opportunities, it's just a matter of trading in a market when emotions are at the extreme. sort of like tulip mania, just on a daily basis.

idribble

29th-December-2004, 04:02 PM

29/12/04 as we speak .... GDA

when would you have bought?

interesting tomorrow

tech/a

29th-December-2004, 06:01 PM

Dribbles.

Have moved and continued the tutorial/discussion here if interested.
There is a great deal of reading to do before you can appreciate the topic.

http://www.aussiestockforums.com/forums/showthread.php?t=717

tech

and NO its not about any particular method.
(Technical analysis/fundamental/Cycle trading /Gann/Elliot wave---blah blah blah. but YES it IS the "Holy Grail" the ONLY way anyone can trade to profit.Regardless of trading style or instrument,Futures,Stocks,Options etc etc.

tech/a

29th-December-2004, 06:15 PM

GDA.

At about 10.30 today if I was at my desk scanning the market for large volume and large % moves like this.(I do this at 10.30 and 11.30 most days with Marketcast).But probably wouldnt have bought it as it isnt in the Universe of stocks I trade.
If the move was triggered by Positive news chances are it will continue,but could easily and most probably follow in the footsteps of CUE and JVR.

I dont generally daytrade-----there are easier ways of making a $$$ and I have a life.
However if undercapitalised then some have no choice.
But if thats your thing----------

tech

idribble

30th-December-2004, 09:27 AM

tech/ a i've had a quick squiz at the link you provided. i will certainly read it all and try to digest some of the maths. been in the market in one form or another for 30 years so still have plenty to learn and i dismiss nothing. commenced short term trading 7 or 8 years ago ..... lost. been on a sabatical the last couple of yerars researching. reckon i have one up on most traders as i now follow a large group of speccies closely and keep the mince pies open for large increases in both volume and price on a stock that has been quiet for a long time. a couple of other rules to "fail safe" my investment and .............

appreciate your time and effort and will get back to you when i've digested it all.

good luck
idribble

tech/a

30th-December-2004, 09:49 AM

Dribbles.

As youll find the beauty of the "Holy Grail" is that it has little to do with the way you trade (There is nothing wrong with your methodology) or how you trade.

Yet 97% of traders are convinced that this is where it must be!
3% of us find it and probably a good % of those dont know what it is that they have found(What makes them profitable).

If you know then you can trade profitably in ANY Way and ANY How.

Its simplicity makes it invisible to most.

Lookforward to your input,with 30 yrs of trading looks like there are now 2 old farts here! :bier:

tech

suzanne

1st-January-2005, 05:43 PM

Dear Tech /a and Dribbles,

I am very grateful to both of you for your input, as I am sure after that amount of time in this system you will have it down to a pat. As a newbie to the stock market, I love to read of anything that can help prevent me making mistakes and losing money and to be eventually be able to trade profitably and consistently.

Please ignore the input of others who may have differing views. I look forward to all points of view and from this I can formulate my own trading system.

So to all. This is a good forum and I am learning a lot. Yes there are lots of different views and I like a lot of others I'm sure, would like to hear them all.

So keep it coming !!! and going.

Suzanne

idribble

6th-January-2005, 06:41 PM

Hi Suzanne, I personally don't have anything down pat. Plenty of time in the market, mostly unsuccessful, but these periods were when I was in the martket in my spare time. You cannot be part time and expect profit. The message that tech/a is trying to get across, I believe, is one of the most worthy arguments I have seen raised and pursued on any board. It is worth reading over and over again. May I humbly suggest you try to understand where tech/a is coming from. You don't have to agree with his method of selecting stocks, or his method of investing.

Opposing views are actually how a market is formed.

Good luck.

tech/a

6th-January-2005, 06:51 PM

Hi Suzanne, I personally don't have anything down pat. Plenty of time in the market, mostly unsuccessful, but these periods were when I was in the martket in my spare time. You cannot be part time and expect profit.
I actually think you can with a longterm trading methodology.

The message that tech/a is trying to get across, I believe, is one of the most worthy arguments I have seen raised and pursued on any board. It is worth reading over and over again. May I humbly suggest you try to understand where tech/a is coming from.

Ive hardly ever seen it discussed or written in plain English.Perhaps Van Tharp.Most focus on how they are going to do it not what it is that will make them profitable REGARDLESS how they trade!

You don't have to agree with his method of selecting stocks, or his method of investing.

Dont know that Ive discussed that thats not what its about.

Opposing views are actually how a market is formed.

True but youll find common threads in all who are profitable there would be NO deviation in my opinion in what it is that makes ALL of them profitable.

Good luck.

I have moved this thread to the General section.
Tech

tulip

28th-January-2005, 08:38 AM

Tech/a

>> OK.

If you follow the crowd youll just be part of it.
Lets face it to be in the 3% youll have to be doing something different to the other 97% <<

I just wonder how reliable your premise is that 3% make a consistent profit. You’ve supported this 3% number with other “irrefutable” stats. I’d really like to see what you’ve got in the locker, which I suspect is at best, a recently trialled system with parameters tailored to ensure good numbers at the end.

How did you arrive at this 3% number?

What “universe” of investors did you use?

What were the parameters used for arriving at 3%?

Over what time frame and under what conditions was this number derived?

What is the 3% measured against? Beating an index, CPI?

Does your “universe” include the hundreds of thousands of - investors who buy for a dividend and hold, investors who pour money into the market through the various funds, employees involved in company share schemes, the ever increasing number of DIY super schemes etc?

If only 3% are successful (which I’m assuming includes you!), then they must be making a motza. Have you any figures on how much this mythical 3% are making?

You’re good at asking questions, lets see if you can answer some.

tech/a

28th-January-2005, 09:32 AM

3% is the figure Ive seen generally accepted on every board Ive been on in the last 12 yrs.

But its a good question Ive never asked.

In my small circle of Broker friends and Accountants,when asked how many Consistantly profitable traders do they have on their books their reply isnt more than 3% its from Zero to a few.

As for my trading results youll find the last 2.5 yrs here and you can check in weekly for an update if you wish.

http://www.reefcap.com/ubb/Forum8/HTML/000396.html

If you have figures showing or qualifying that more than 3% of traders make a consistant profit then I ilke everyone else would be glad to see them.Thats Traders not investors--managed funds Super Funds etc.

You can also drop you crap attitude.Your starting to look like a monkey with a chip the size of Everest on its shoulder.

Your not the first who thinks tech should be pulled down a rung or 2 and you wont be the last.If you get any benifit from my work fine thats why I post it if you think Im full of my own rubbish place me on your ignore list

Clear enough!
Choice is yours-----discuss------- ill discuss start childish fist beating your on your own.

tech

tulip

28th-January-2005, 10:23 AM

I don't believe T/A needs to be pulled down a rung or two. I just think you are an arrogant, know it all who delights in putting people down to massage your over inflated ego. Trouble is, you put off many people from posting their thoughts because of the arrogant all knowing manner in which you attack people.

Bull markets usually see a flood of "experts". With your all knwoing attitude you will be one of the forst casualties when the market turns.

I'll leave you to your own but you don't impress me with your many flawed assumtions and criteria such as your wonderful classification of penny dreadfuls. Results from flawed premises such as these can only be flawed also.

You are not worth having a conversation with.

tech/a

28th-January-2005, 11:54 AM

Well thanks for your input Tulip.

Arrogance is a trait of mine and thanks for letting me know that its showing.

Ill see you at the bottom of the ladder when I fall.

Back to the Rocket Science!!

tech

WaySolid

28th-January-2005, 03:56 PM

I would be checking WB2 and Tulip's IP's meself as they appear to have had the same grammar teacher.

I enjoy reading your posts and thoughts Tech, keep going.

People prepared to put the specifics of their wealth creation strategies online should be applauded, though no doubt this always brings out detractors as well.

And arguing about the 97-3% ratio being correct!! Who cares! Talk about not seeing the forest for all those darn trees in the way!

tech/a

28th-January-2005, 04:09 PM

Nothing like a pure dose of Tall Poppy syndrome.

I dont have to post here or anywhere.I do it simply because Ive done the yards understood how to do it and am far luckier than most of the population.I give something back.
The populace are under no obligation to accept that which I offer.
Its offered Free and without anything asked for or wanted in return.

Knock yourself out fellas,the runs are on the board!
If you think this sort of rubbish is going to stop me posting think again!
Im everything you have said and more.So what! :D

Tulip and Warren Ive added you both to my Ignore list just add me to yours.

tech

Warren Buffet II

28th-January-2005, 04:23 PM

Tulip and Warren Ive added you both to my Ignore list just add me to yours.

tech

Why? I actually enjoy your comments. :D

tulip

29th-January-2005, 10:27 AM

Tech/a is the quintissential Bull Market guru. When you get in his inner circle it is sure to cost!

Would Be Trader

29th-January-2005, 02:10 PM

Tulip,

I am one of many who greatly appreciates the contribution of Tech/a to this forum. For that matter, I appreciate the contribution from anybody (including yourself) as long as it is constructive.

I appreciate that one can have different views from another and this can trigger a debate. However, this does not give anybody the right to be rude and dis-respectful of other people opinions as you have been with Tech/a.

Your profile suggests that you joined this forum less than a week ago. I am amazed that you already feel in a position to criticise the work that Tech/a has done for this forum over the last 3 years or so. Have you had time to read all of his posts yet? I doubt it.

All I am saying is that if you don/t like what Tech/a is saying just put him in the ignore list but please DO NOT POLLUTE THIS FORUM WITH YOUR RUDENESS!

Tech/a,

I am sure that I am one of many that is gratefull for your insights! You can only be commended for what you are doing for many of us. Please Keep up the good work

Angelo

Joe Blow

29th-January-2005, 02:20 PM

I am amazed that you already feel in a position to criticise the work that Tech/a has done for this forum over the last 3 years or so.

3 years?

:eek7:

tulip

29th-January-2005, 03:42 PM

Would be Trader. I've read Tech/a's posts and he is rude and arrogant and I'm not the only one to point that out. His modus operandi is to belittle people with a barrage of technical questions then hammers home his all knowing attitude and opinions with loud type.

I don't know your experience but I certainly would not be confrontational by referring to you as a "novice" as Tech/a frequently does in his replies.

His system is totally unproven because it has only been tested over two years in a Bull market. His ego is so huge he refers to himself as a Tall Poppy. Don't you think that smacks of arrogance? If you take that attitude into the market you will eventually get hammered.

His system has not been tested in a Bear market. Why? He has the tools available to back test yet for some reason he has chosen not to do so.

Further, his assumptions have holes in them. He constantly refers to trading stocks under 20c. Since when has the share price been used to classify penny dreadful stocks? It's a totally useless premise to devise a system on.

I'm not in awe of a person who is flawed and is flogging a system based on flawed premises. He is not psychologically equipped to be successful long term. He will not react to the first signs of failure in his systems because of his arrogance and will eventually be crushed by the market. I'm not surprised that his system currently is successful. A monkey could devise a successful system in a Bull Market.

Warren Buffet II

29th-January-2005, 05:01 PM

WaySolid

29th-January-2005, 05:53 PM

Danged if youse guys don't attend the same English class. Tulip and WarrenBoofet2. The incorrect use of commas, and fullstops. Really can cruel the flow of a paragraph. Perhaps it are an example, of two long lost brothers twin?

As Ned Flanders would say "Don't that just put the dink in coinkidink!"

If I ever meet a "serious crazy guy" then I'll certainly be glad he is not just fooling around!

One split personality goes onto my ignore list!

Tech/A has demonstrated a fairly coherent grasp of the principles of risk management so I'm not sure why he is destined to fail if the market loses some heat. But then you don't seem to be very interested in rational debate so it's quite pointless to continue. Time for me to stop feeding the troll.

Bye.

WaySolid

29th-January-2005, 06:04 PM

3 years?

:eek7:The confusion most likely arises from the thread Tech has been maintaining on ReefCap.

If Nick Radge's experiences on ReefCap are any guide I hope Joe is a very patient moderator!

Would Be Trader

29th-January-2005, 06:14 PM

The confusion most likely arises from the thread Tech has been maintaining on ReefCap.

If Nick Radge's experiences on ReefCap are any guide I hope Joe is a very patient moderator!

You are right! When I mentioned the 3 years, my mind Inadvertently included his posts on Reefcap. My apologies for the inaccuracy

Would Be Trader

29th-January-2005, 06:38 PM

Would Be Trader

29th-January-2005, 07:08 PM

Tulip, it is clear to me, we are facing here a serious crazy guy. This "Would Be Trader" is the same tech/a ;) . It is a member sice yesterday and is saying that he has been here around for the last 3 years :sly: . Yeah right this forum has been around only for about a year :).

Tulip we just need to :)

Warren Buffet II
I am afraid you got it all wrong. Let me assure you that I am not Tech/a. I am someone who has been reading various threads in this forum by logging in automatically with My wife's user id. However, yesterday for the first time I felt the need to reply to a post so I decided to create my own login. In regard to the 3 years see my previous post. I guess you don't have to believe any of the above but then again... who cares! After all, this post is probably my last one for a while as I intend to go back to my humble role of learner.

In any case, I am not going to reply to your opening insult, but be aware the if you keep going with those insults you'll soon end up posting to yourself. As a matter of facts you are in my Ignore list as of now.

RichKid

29th-January-2005, 08:35 PM

Okay, so there's a bit of rudeness allround. If TechA says himself that he's arrogant that's fine, although I think there's a bit of tongue in cheek in that. I think (just my opinion) that TechA's agressive and a bit insensitive to the views of people less experienced than himself at times (hope you don't mind me being frank, rather than quarrelsome) but after noting one of Wayne's comments that seems to be a trait amongst some active, experienced traders- maybe considered a badge of honour in some circles.

There is also an issue that has not been aired and that is that a lot of people are afraid to make criticisms of TechA because they are learning so much from him- they are afraid (imo) that he will threaten to leave and do a runner(as he did the first time when Stefan debated him) and hence the boards will lose something. I think we will all lose more if we aren't constructive and critical rather than rude and critical. I'm glad to see you're staying now Tech so keep it up but let it be noted that Tulip's comments did raise an important issue about the 3%- no one questioned it to date and Tech's answer has been very helpful. The exchanges in the last few posts would have been far better imo if we hadn't just overstepped the mark to the point of rudeness. Sometimes just ignoring others doesn't help if there is constructive reasoning underlying the otherwise tactless remarks. Perhaps we all need to step up rather than being silent and post a bit more on these issues; a robust debate is always good- 'but no more crudity' (this is sounding like Mark Latham apologizing!)

I guess I'm going to get flamed from all quarters for this post but we need to discuss this maturely and in the open but without abusing each other like high school kids or this forum will become like what people say hotcopper is- it doesn't take much.

doctorj

29th-January-2005, 08:37 PM

Why can't we all get along?

We're all playing the same game towards achieving the same goal. Places such as this benefit from a wide variety of different opinions. The more the merrier as far as I'm concerned. Even if you only benefit from someone's thoughts or advice once you are still better off than you were before.

Agreed some people react to criticism better than others and indeed some people criticise better than others. Lets remember we're all on the same team and keep this forum of the high quality it is.

And with that, I'd like to leave you with the following thought. Apologies in advance to those easily offended.

RichKid

29th-January-2005, 08:43 PM

DocJ,
I agree with your comments about getting along but please be aware that the picture may open up these forums to legal action. It is serious. See the Australian Broadcasting Authority website and the Broadcast Services Act etc. It'll affect Joe more than anyone else- unless the site has to shut down. I don't think we should make fun of people with disabilities.

tulip

29th-January-2005, 08:51 PM

Great comments RichKid.

Tech/a is putting people on ignore and surrounding himself with "yes men" (in his own mind) who will nod and confirm that the world is flat.

He is so insecure!

How will he learn the nuances of the stockmarket if he doesn't embrace all opinions?

doctorj

29th-January-2005, 08:54 PM

At the risk of getting into a debate about the overwhelming tide of increasing political correctness, I'll say the world is getting too damn sensitive. Aussiestockforums is hosted in the US where many thousands of different sites have aired that jpeg at one time or another. Also, I don't think that image makes fun at all of the handicapped, unless the disabled community finds being compared to a bunch of stock trading forum users insulting.

RichKid

29th-January-2005, 10:04 PM

unless the disabled community finds being compared to a bunch of stock trading forum users insulting.

I suppose we must sound like a motley bunch to any passers by. I think I'll need to find some sites making fun of us traders. Might be a good idea for a new thread??!!
There's the 'New Yorker book of Business Cartoons' and the 'Illustrated Reminiscences of a Stock Operator' which are great- worth having a look for people like me to lighten up I guess. Most non-business/finance types wont find those books at all funny. The second book has some clever illustrations (from the original versions of the book).

Anyway, getting off thread now, sorry.

RichKid

29th-January-2005, 10:15 PM

He is so insecure!

Hi Tulip,
Welcome to ASF, I enjoy your posts, but when TechA is called names like that he will get riled up and respond to personal remarks in a similar vein, that was part of what I was alluding to. Although I do appreciate that you're probably responding to one of his earlier comments about you, this may make things worse. I think I'll let this issue go for now. It's there for all to see and comment on.

Best Regards to all.

DTM

29th-January-2005, 11:00 PM

dutchie

30th-January-2005, 06:28 PM

DoctorJ

Sorry can't let this final comment go unanswered (even though you have apologised in advance)

Understand the message you are trying to convey (I agree with the message) but I think the way you expressed it is at best in poor taste.

Worse than insulting a fellow poster as special people cannot defend themselves.

Penalty - all profits from your next trade to be donated to a special olympics fund.

PS Congratulations to all special olympics contestants who did Australia proud at the last event - again proving that pound for pound Aussies are the best sports people in the world.

Life is as easy as you want to make it

money tree

30th-January-2005, 06:55 PM

Hi Tulip

I commend you on taking a stand against the pied piper, and I have my own thoughts on this topic, but will try to employ some tact, which I was accused of not having on another thread.

Tech/a seems to be incapable of tolerating negative criticism, which makes me wonder if he treats the market the same way. Either you have humility or you dont, and if you dont it is very hard to believe it when someone says they are the worlds greatest trader. The market loves the arrogant and self-riteous, and whacks them for a six. How this obvious contradiction has evaded people here amazes me.

I feel you are right regarding the 'yes men' problem. Some here have sold the rest out by defending tech/a despite blatant wrongdoings. They accept his offer of bribes, namely informative posts in exchange for defence of the guru regardless of offence. Sadly I feel the forum moderator has failed in his most basic of duties.

We must all use caution when taking the advice of a guru. I believe tech/a has a motive for posting here, and I dont for a minute believe it has anything to do with generosity. He desires power and respect, evidenced by the ego and arrogance displayed in every post. How can he be generous on one hand, and then on the other claim to be a super trader who has taken millions from other traders. Capitalism and charity are opposing forces. Wake up people, he has his own selfish agenda. That does not however mean that I wish for tech/a to leave, even I admit his knowledge and experience are a valuable asset here.

What I find curious is that tech/a blasted crashie, who does not seem to be posting anymore, in fact I dont see him even logging in. Now I see tech/a admitting his actions were inappropriate, but no sign of an apology or redraw of his many baseless claims. But since nobody defended crashie maybe he wont be missed anyway. I personally think anyone who can go head to head with someone like tech/a is valuable on this forum. How many more people like that must we lose. Would you all prefer to stick with the tech/a show? What we will end up with is 100 newbies doing whatever the pied piper says. How many of you believe you will gain from that?

As for his track record, I had not thought about it. But since you mention it, you are right, anyone can be made to look a genius in a bull market. I saw an admission by tech/a on another forum that he lost money for the first 5 years, before "seeing the light" 2 or so years ago and making good profits since then. It appears then that tech/a lost money in a bear market consistently, and has been consistently profitable in a bull market.

One thing however still does not add up. He claims to have made millions from the market. Since he lost money for 5 years, and lets assume that was quite a bit, we are now expected to believe he has not only recovered that, but made several millions dollars on top in the last 2 years or so. And this is despite his complete lack of humility.

Do you buy it? I dont.

It is like the blind leading the blank around here.

oh and 'would be trader', dont insult our intelligence. You cut quotes the exact same way, and are incredibly defensive of tech/a despite being very quiet previously.

many of you may think tulip or others who question tech/a are the aggressors ruining this forum. I think tech/a is the aggressor here.

tech/a dont leave. Just pull your friggin head out of the clouds!

money tree

30th-January-2005, 07:30 PM

this is from THIS very forum:

Thought Id feel the group out before I continued.
Took me 7 yrs to UNDERSTAND
8 to trade profitably and 11 to do it year in year out.

Here he admits that for the first SEVEN years he consistently LOST money. And he has made money since then in a BULL market.

And you people treat him like a guru!

money tree

30th-January-2005, 07:33 PM

oh and waysolid is another tech/a nick

just look at the avatars, they are from the same nature series of screensavers!

WaySolid

30th-January-2005, 07:54 PM

My last share trade was selling out of an oiler (THK) several days before it doubled it's share price.

I wish I had Tech/A's trading record over the last 3 or so years!!

I'm not sure what this might imply about about the veracity of your other statements Money-Tree, I'm guessing it isn't positive however.

At the risk of continuing the off-thread guff that is now happening here I shall continue just briefly.

"Play the ball not the man!!" This was my interpretation of what Joe said and what should be considered standard etiquette. If it was easy to make money over the last 3 years and Tech has just been lucky then post how YOU MADE MONEY and lets benefit from your wisdom, if not then I really don't see how attacking someone personally helps anyone. And personal flaming is a trademark of a TROLL.

I wouldn't have commented further except for my name being dragged into this rubbish.

I am not Tech/A. Ask Joe for IP confirmation.

Now stop TROLLING and start CONTRIBUTING (or don't post at all)!

BYE!

Joe Blow

30th-January-2005, 08:02 PM

oh and waysolid is another tech/a nick

just look at the avatars, they are from the same nature series of screensavers!

money tree,

As administrator, I have access to the IP's used by every member. I can assure you that tech/a and waysolid have never used the same internet connection. The avatars you mention are some of the default avatars you can find in the 'edit avatar' section of your UserCP.

However, you seem to be sharing an internet connection with crashy. So you either are him or you have access to the same internet connection he does.

I have been trying to avoid getting involved in this dispute but with accusations being thrown around left, right and centre I have been forced into becoming involved. I have gone to great lengths to make my position as administrator a non-political one but this little dispute is getting out of hand and I'd like to see it resolved.

Please understand that I am not taking anyone's side. I'm not interested in taking sides, I am interested in enforcing the rules of Aussie Stock Forums and trying to make this place run smoothly. That is my priority.

If you are crashy, as I suspect, I hope you and tech/a can work out your differences or perhaps just agree to disagree as you are both valued contributors to this site. Either way, I am rapidly tiring of all this mudslinging.

money tree

30th-January-2005, 08:17 PM

its ok, I am using my wifes login IP

rofl!

Warren Buffet II

30th-January-2005, 08:56 PM

its ok, I am using my wifes login IP

rofl!

What my wife login's IP? I do not think you can do that that easy.

Joe Blow as you are checking some IP addresses, I will recommend you to check for IP ranges instead of a particular IP address. I can change my IP address as many times as I want but I can not change my ISP as easy as that. ;)

idribble

31st-January-2005, 09:59 AM

hi tech/a. is your system profitable in a bear market, can you backtest it or lead me to a site where you have already provided this information.

tech/a

31st-January-2005, 10:35 AM

Dribbles.

Thanks for asking.

Yes actually it tested profitable.Infact the 20000 Montecarlo tests we did on the method (Thats like giving 20000 people $100000 each giving them the method and then asking them to trade it and report back in 8 yrs(the test period) with the results).

There are around 400 pages on Reefcap and its one hell of a job wading through pages of discussion.About a year ago I placed all the discussion on a disk for ease of reference.Im happy to send you a disk so you can follow the full developement and testing and discussions.

Just let me know your postal address and Ill send one out.
Dont take my word for it!

Also remember that the average trade length is around 1 yr and equity curves only record closed trades.
Open profit isnt considered in testing until its inclusion at the very end of a test period.

Infact if you looked at the results of TechTraders closed Trades to date the result is pretty average.However open equity is massive.UTB for instance has been open for 2.5 yrs and bought at $3 odd. its now $11 or so.
TOL
QBE are a few others off the top of my head.
Antway more to evaluation than meets the eye.
Im not here or about to convince anyone about anything to do with the method it is and was presented as an example.

RichKid

31st-January-2005, 11:52 AM

There are around 400 pages on Reefcap and its one hell of a job wading through pages of discussion.About a year ago I placed all the discussion on a disk for ease of reference.Im happy to send you a disk so you can follow the full developement and testing and discussions.

Wow TechA! You must have learnt a lot just by testing it! Do you plan to market it at some stage as a package with instructions or is it just there for people to learn in a do it yourself package (ie go through 400pgs)?
I'm going to have to find some long hours to wade through the pages you mentioned to learn what I can. BTW, what's to stop some blackbox promoter copying your system and selling it? Just a thought as most traders aren't as open as you since they don't want others to take their system. Hope I haven't misunderstood anything here, still learning.

tech/a

31st-January-2005, 12:03 PM

Just to add a little more.
This method is a nett long /long term trading methodology.
It has done very well over the last 2.5 yrs and you would expect it to as thats what its designed for!!

The question is often asked about performance in less than idealic times.
The definative answer and what I personally will be doing is simply following the method,and if at anytime its Peak To Valley Maximum Drawdown recorded during Montecarlo analysis is greater than that found during testing (21% I think from memory) Then I will exit all positions.(Peak to Valley is from the highest peak of equity to lowest low of equity before a new high is made.) So if I had $100K in open and close equity and iy=t dropped to 80k then Id exit all positions.

Im also looking at another methodology addition with Jose Silva at the moment---always room to improve.

Personally I feel that even in downtimes there are some stocks which out perform the index some by vast amounts.It is these we all try to find and ride as long as we can.So far the method has been successful in flagging some wonderful trades and time will tell if this continues.
We can only trade the market as it is and make plans for times which are not as favorable,and each will have different ideas as to what those plans should be.

In the meantime enjoy the great run we are having.

tech

tech/a

31st-January-2005, 12:09 PM

RichKid

31st-January-2005, 01:30 PM

Rich.

I have no intention of selling it.Never had.Its there for all to use as a template, as a conversation piece,motivational tool whatever.
I know of 16 traders who are using it as it is or with twists that they have included.All are enjoying the goodtimes.As you would expect.

Would you say that you have to have Metastock or a similar programme to trade the TechTrader system, my guess is you would and the 16 traders you mention probably do(?), I don't have Metastock but does it come with tools for calculating positive expectancy etc or do you have to use excel for that? ie is the money money mgmgt software independant of the trading software? Would be great if they were intergrated.

I don't have any software (other than what Comsec provides) so I'm wondering if is workable without the software, even Van Tharp refers to software for his method but that may just be to sell his products (I think he does mention students of his who sell integrated software).

As for leaning a lot sure did and thats what I pass on here---at no fee, gratis,without charge and no strings attached----to feed my ego ofcourse!! ;) ;)

Ha, ha, glad you have a sense of humour too! You can munch on these posts...

tech/a

31st-January-2005, 01:46 PM

Yes you need software.

M/S gives the capability to search the market for prospects and TRADESIM the texting capacity and all the Positive expectancy drawdown type reports.
The Operations Manual for Tradesim is a fantastic tool for learning what evry function does.and its place in the scheme of developing a trading method.

There are some traders who have formulated it for AMIBROKER and if I was starting out Id use that!
Infact Im seriously looking at it due to its superior performance(can do more).

RichKid

31st-January-2005, 02:28 PM

Thanks Tech, looks like this is going to take me awhile, had quick look at the TRADESIM site, so many versions:
http://www.compuvision.com.au/

Amibroker looks great too (and seems cheaper and more flexible too- open API):
http://www.amibroker.com/

As I understand it Tradesim (portfolio analysis/simulation tool?) is an add on to Metastock (charting software) whereas Amibroker incorporates both charting and portfolio analysis/simulation.
In which case is it a no-brainer to get Amibroker? My only aim in purchasing the software is to implement the money mgmt/positive expectancy approach via TA so I guess Amibroker would be the best for our puposes.

Am I correct Tech about my observations above re the software for implementing positive expectancy? Thought you'd know much more as you use it and I've only spent a few minutes reading the ads on the websites. I know there's a thread on software but this is more about what's best for positive expectancy calculations/mgmt.

RodC

31st-January-2005, 03:20 PM

Rich,

I've got the techtrader code for amibroker if you want (it will save you searching for it).

Rod.

RichKid

31st-January-2005, 03:31 PM

Rich,

I've got the techtrader code for amibroker if you want (it will save you searching for it).

Rod.

I'm a bit out of my depth atm trying to get around this software stuff but if you could send it via private msg (if that is possible) I'd be much obliged.
Thanks!

idribble

31st-January-2005, 05:41 PM

Yes actually it tested profitable.Infact the 20000 Montecarlo tests we did on the method (Thats like giving 20000 people $100000 each giving them the method and then asking them to trade it and report back in 8 yrs(the test period) with the results).

that doesn’t actually answer the question whether this system is proven in a bear market.

The question is often asked about performance in less than idealic times.
The definative answer and what I personally will be doing is simply following the method,and if at anytime its Peak To Valley Maximum Drawdown recorded during Montecarlo analysis is greater than that found during testing (21% I think from memory) Then I will exit all positions.(Peak to Valley is from the highest peak of equity to lowest low of equity before a new high is made.) So if I had $100K in open and close equity and iy=t dropped to 80k then Id exit all positions.

this statement confirms your strategy for exiting positions in a bear market but contradicts your platform of knowing what to expect because the test conditions do not cover a bear market.

you've obviously got a system that has shown good results over a short period of time, but go back to the late eighties and see how well it performs. you seem to be very reluctant to disclose that you have not backtested this system. i don't understand why.

tech/a

31st-January-2005, 06:24 PM

Dribbles.

Not at all.again there are 400 pages of information on the design and testing available on disk.

To test a system on stocks back as far as the 80s is practically impossible due to survivorship.The system is designed having the BT margin list as its universe of stocks.The test period selected was and is 8 yrs in which there was a period of downward movement in the ORDS index.The BT margin list now and then were and are different but not a great deal we did select the list in the year of testing,but back in the 80s particularly early 80s are vastly different.
In answer to your question it has been tested over the 8 yr period stated and over many variants,5,6,7, etc

Dont know what all the fuss is about your under no obligation to do anything with the method its offered to people for their own use.You dont have to trade it---agree with its results or the way its tested.

The fact is its being traded and so far has performed as it has.I havent traded it in a bearish period but if one comes along then Ill trade it as stated.

As for what to expect----- the system in testing made a profit in the bearish period which was less than bullish years and that to would be expected.

I just scrolled thru some of the pages to find something that may help.This is an equity curve of the method at the time of testing look at the dates to see how it performed in the periods your interested in.This is from 97 to 2002 we ran 100s of tests.

Anyway what exactly are you looking for?
If you cant find it in whats here or presented discard it Ive not said its the Holy Grail of methods!Infact I trade another one as well as this which is weekly and superior.Each have their day so thats why I keep them both.

Finally as much as I would like to test the method back 30 yrs I just dont have the data and I dont know where to get clean data that would include all delisted stocks.Even then it wouldnt be the BT margin list.
Ive also tried it on the Full ASX and its returns are average but on par with any Fund.I tested it for a guy in Hong Kong and the results were better than in AUST.

Can you explain to me why the necessity to prove XYZ on something which is offered as a free methodology from which people can work from.

If having a necessity for YOUR method to be proven to perform to X in a bear market then fine you can do that.We were and are happy with the results and started trading it----- the results are posted each week.

Why would you expect a long/long term method to go gang busters in a market its not designed for.Its results are ofcourse averaged over time.

Anyway if you or someone CAN get me clean data back to X then I really would love to test it over that time on the full index.Ill gladly pay for the data and gladly post the results---- Im as curious as you are!

If it was a method tested against an index then data is available as it is for futures.

Let me know if there is anything specific I can find for you.Youll note that some years performed worse than others.

Before you ask the flat and negative period for the first 2 yrs is common due to it being a longterm method.Trades are held for over a year so there would be only those that were stopped or exited well under the average hold period.
In the method shown on REEF UTB has been held since inception so its 400% gain isnt shown on any equty curve as its still open.It is however shown on Darrels continuous equity graph,which he composes from Excell.

Anyway its what I trade and I havent asked or invited anyone else to trade it!If you find it useful fine if not ignore it!

tech

RichKid

31st-January-2005, 11:28 PM

That graph tells me what discipline is all about, imagine the strain of watching long flat periods if you didn't have confidence in your system! And here's me panicking when I'm down a bit in a month!

tech/a

1st-February-2005, 07:04 AM

dutchie

1st-February-2005, 09:12 AM

I was wondering, whether you were a professional/amateur/experienced/beginner and irrespective of what method/strategy is used, if the first FILTER to be used is GUT FEELING.

I think in my short experience that it is (conciously or unconsciously).

Would be interested to hear from more experienced traders whether they pulled back from entering a position (even though all their signals/ research etc was positive) because they just did not feel good about it.

Is having good gut feeling instincts what is needed to be in the 3% ??

tech/a

1st-February-2005, 09:42 AM

Dutchie.

Speaking for myself emotion isnt in the equation,the whole idea of trading mechanically is to rid yourself of these emotions.

Then it becomes purely a numbers game which is exactly what I trade.
Its also what Im attempting to get across here-----that it doesnt matter HOW you trade---even GUT feel----if you have positive expectancy and you KNOW what YOUR NUMBERS are then you will be in the 3% if the NUMBERS arent right then youll end up in the 97%.

In answer to your question in my case I wouldnt advise it your guessing the market and it will do what it does inspite of your gut feelings Just look at the MUL thread.

Let Price action be your determinate.

doctorj

1st-February-2005, 09:52 AM

Let me just balance this by saying there are many successful speculators/traders/investors that do not rely on a mechanical method. Yes, planning is integral to your success under any method, but the key is to discover a method that fits your personality.

money tree

1st-February-2005, 10:02 AM

anyone find it strange that the chart shows no significant dip through Feb/Mar 03 despite the market diving to 2700?

tech/a

1st-February-2005, 10:13 AM

Correct Doc and thats what Ive done and it suits me.You asked for an opinion why shoot me down when I answer it from my point of veiw.I made it clear(I thought)thatyou can trade how you like.

Iam interested though-----Do you believe that you can be profitable without having a positive expectancy and NUMBERS that dont show Reward being greater than risk.If so Please explain as this would be very intesresting and valueable information!

Crashy,The trading of the method over the time you query is available for you to analyse.This is the very early days of the method and as such time hadent been working for us with those trades that were profitable.

Guess that in that time part of your question of Robustness has been answered!!!

tech

doctorj

1st-February-2005, 10:16 AM

I don't believe I've shot anyone down... :confused:

dutchie

1st-February-2005, 11:01 AM

Tech/a

I think you misunderstood the question. I was not advocating gut feeling as a trading method. I agree that the numbers must be right.

I was just exploring the fact that a (bad ?) gut feeling might stop you from executing a trade even though your system/method and the numbers stack up.

This could occur if you had three good choices but only enough to trade one.

I personally would not ignore my gut feeling no matter how positive the system and numbers were.

RichKid

1st-February-2005, 11:15 AM

Rich.

These graphs are constructed from closed trades as only when they are closed can the software record the results of the trade.
Win/Lose or Draw.

In reality we would only have a couple closing every few months with this long term method,and of a portfolio of 10 it would be fully invested in 99.9% of the time.So we would have open equity to follow as to how well we were travelling.

The chart below is one of the open profit week to week in the method as its being traded.Its equity curve(Join the tops of the bars) is much smoother than that of any closed trades equity curve of any long term method.

Thanks Tech, makes a bit more sense now. Do you have a weekly bar chart of open profit for the period shown in the Equity curve (the last one you posted was for a later period)? Or did you only record closed trades early on. Or have I misunderstood how it works again (doh)! Thanks in advance.

RichKid

1st-February-2005, 11:20 AM

Tech/a
This could occur if you had three good choices but only enough to trade one.

I personally would not ignore my gut feeling no matter how positive the system and numbers were.

I see what you're saying now dutchie, interesting to know how to 'filter' out the worst of the 'good' choices/candidates, I'm assuming TechA can't trade all and that there are many candidates appearing at certain stages.

tech/a

1st-February-2005, 11:20 AM

Dutchie.

Fair enough!
This does occure for myself and i guess to a degree when looking at the charts to make that final decision as to which trade of those alerted to take I have 2 discretionary filters.
(1)The Chart must either have clearly broken a downtrend an be in the throws of starting a new trend (Higher lows and higher highs).
And
(2)The Chart must not be in a long term range from say $1.30 to 1.65 over a number of years.

I guess when looking at charts there are some which impress more than others and as such could be seen as GUT feel.So I to use it I suppose.

Now before someone pipes up and yells "But then your not trading your system youve introduced a discretionary element".
Ive thought about that.Not all trades in the method have to be taken in fact I can and have tested if you DID take EVERY TRADE if the funds were available.The figures are rediculuous something like 35 million profit----money makes money!

Anyway Montecarlo picks random portfolios made up of those selected by the method so when we test 20000------20000 different portfolios are run over the specified timeframe.This then gives me confidence that no matter which portfolio I choose out of the possible 20000 I know the probable Maximum return and Minimum---chances are that Ill fall within the parameters.

tech

tulip

2nd-February-2005, 09:43 AM

tech/a did you really say this? "The figures are rediculuous something like 35 million profit----money makes money!"

Now it's a $35 million dollar profit on a system that is unravelling before our very own eyes! There are doubts about the validity of the results from the Montecarlo method (flawed it has been stated), the introduction of discretionary selection and the acknowledgement that this has not been proven in a bear market. Have you noticed when tech/a answers a difficult question he doesn't answer with the facts, he is evasive.

If it waddles like a duck, quacks like a duck then .............

tech/a

2nd-February-2005, 10:17 AM

Ok whatever!

Your posts are tedious the results are there week in week out,Im not here to prove or convince anyone about anything simply they can make up their own minds.

If you think its rubbish then treat it as so if it has value to you then enjoy.

Oh its a duck alright---very insightful.

If its got an open equity curve thats rised from day one 98K to now over 223K its probably---profitable.If starting capital was 35K and the rest margin then its probably ----Very profitable.

But hey its only a DUCK! ;) ;)

RichKid

2nd-February-2005, 10:56 AM

C'mon Tulip, he's got his system for all to see on another site which he has referred us to (and has offerred to send a copy of at no charge) he's not saying it's perfect but is prepared to answer constructive criticism of it. And we don't have to use TechTrader if we don't want to- no one said it's perfect. I don't understand it but I'm trying to as I may learn something from it and may be able to offer some comments once I get my head around it. Even if it is a duck it can be examined openly (to verify if it is indeed poultry or a profitable trading system). The quack comments are funny but it may just take things off track, so if you're saying he's evasive it only helps make things more so.

Again, I'm no expert on the system and TechTrader may be flawed but it's better to pinpoint the flaws than to call it a duck, especially when you have so many more constructive thoughts to offer. The recent debate around TechTrader has opened up some of the 'weakpoints', thanks partially to you, (eg selecting which candidates to go with- discretionary aspect as highlighted by DocJ) but that's only because we were constructive and raised valid issues. I don't have the math to see how $35m was made but needless to say that is just theoretical (as you need lots of money for that) and who knows if past results will yield the same in the future (We'll know in 10yrs).

tulip

2nd-February-2005, 11:10 AM

Fair comments Richkid, taken on board.

RichKid

2nd-February-2005, 11:21 AM

Hi Tulip,

Thanks mate for being reasonable and open enough to hear a few words from a newbie! Always dangerous on these boards now when things get heated, never know where the next one may come from.

Just one more point as far as systems evaluation goes- I've been reading Van Tharp's 'Trade your way to Financial Freedom', some of you here will be familiar with it. It talks of various biases at the start of the book, some of you who know more about systems may be able to apply that here. I know Tech would have been mindful of those pitfalls when he designed the system. It may be a better reference point for discussion. Van Tharp basically studied thousands of traders and distilled what he thought was the essence of their success and created a model around positive expectancy (that is what I understand so far). He also identified some flaws which he saw in unsuccessful traders. See the Van Tharp thread for more info http://www.aussiestockforums.com/forums/showthread.php?t=846.

In the end, whatever comes out of this thread it can only help make Techtrader better so hopefully techA will get something valuable out of it.

tulip

2nd-February-2005, 03:52 PM

tech/a 23 November 2004 "My apologies I will no longer be posting on this site."

I see you are still here. More dummy spits than a baby.

tech/a

5th-February-2005, 10:25 AM

Yeh currently still here My interest is constantly renewed by the "Professionals"intimidation of newbies/and or those who arent in the financial profession.Particularly when directed at myself---Why are these guys so peeved at a thread on positive expectancy and my offer of credibility when asked by others?? I ask myself.

My disclosure of some truths about the simplicity of being profitable and infact the disclosure of a method that is profitable and can be monitored every week for its performance (you can sledge it as much as you like but for 2.5 yrs its STILL making $$$s last week $7k which is 20% in a week on initial capital).

Not only that but its fully disclosed and FREE to anyone who wishes to investigate it more.
Unlike the "Professional" version which will not be given away free.(I think your hoping that this will give a perception of better value!).

Youve tried all you can to discredit,cast doubt,antagonise and intimidate.
Your own exaggeration of what Ive said presented and offered has in your minds clouded the facts and what has been said and offered.

Youve proven beyond doubt to me atleast that your quick to discredit and intimidate but when challenged on personal inuendo and so called facts and Im talking about your personal attacks on myself,you have no basis.

You find it abhorant that anyone without financial training could possibly achieve financial self sufficiency,and to actually offer proof and talk about amounts can only be seen in your minds as chest beating.
Well Im here to tell you there are plenty of us.We are the people, people like you want as clients so we can put our hard earned in a managed fund that you recommend and you get the commision each year.We are also the people you want to be ---in the position if we choose to retire without government assistance.

Thats why you want to sell your way of making a quid and I give mine away-------I dont need the money you do!!

So yeh Ill stick around for a while just to make sure your guys dont hoodwink some of the posters here into thinking you have all the answers and that they are doomed without your assistance/knowledge.

While on the Professional thing.

Tulip what EXACTLY are your financial qualifications?
Crashy what EXACTLY are your financial qualifications?

Just interested.
tech

tulip

5th-February-2005, 11:55 AM

tech/a fair question. I'm not even remotely connected to anyone in the stock market industry. Never have been. I do not sell products or services that would, even with the seven degrees of seperation employed, get close to the stock market. Professionally I'm as far removed from the stock market as anyone could be.

Can't be clearer than that.

tech/a

5th-February-2005, 01:10 PM

Seems your not one of the 2 people that Crashy is refering to.
Both must be Crashy.

JetDollars

5th-February-2005, 07:53 PM

Guys,

Let keep the topic the way it suppose to be. I am to learn and if you have somethings to shares then post them here. There is no point keep arguing the way it is. At the end of the day, there no benefit to anyone.

Worse of all, this forum become a fighting forum.

I hope you guys can understand.

Let shares what you got if you willing too.

The Barbarian Investor

6th-February-2005, 11:19 PM

Agree..lets be "constructive" rather than "destructive"..........................

Tech/a, how about a summation of the Tips contained within the preceding post's from your perspective? It's been a long thread that has gained most forumites attention and responses from some knowledeable members..

my :2twocents

RichKid

15th-July-2005, 12:31 AM

Have a look at this folks, appears to generate 'random' equity curves once you select your numbers- is that what it does? looks like anything below 3 (W/L) and 30% (win prob) is bad. Using more than one line helps (enter 3 or more in the field). Be patient while it loads properly, just hit the 'generate' button while you wait. It'll be good to discuss it in terms of this thread.

http://www.tradinglogically.com/equity_curves.htm

ob1kenobi

15th-July-2005, 01:09 AM

Rich, just checked it out. I'm intrigued, can't wait to see the article!

happytrader

3rd-November-2005, 06:10 PM

Kauri

3rd-November-2005, 06:45 PM

Rich, just checked it out. I'm intrigued, can't wait to see the article!

http://www.hquotes.com/tradehard/simulator.html

If this link works it gives you the article/instructions. Same simulator, different site. :)

happytrader

4th-November-2005, 08:29 AM

Hi Kauri

Thanks for the calculator link. Have been playing around with it testing my results and those of others. Excellent tool, very reassuring. Thanks for that.

Cheers
Happytrader

MRC & Co

10th-March-2008, 11:06 PM

I just scanned this entire thread and I appear to have missed the part of the tutorial on exits? Was it in there and I just skimmed over it?

Just to chime in on the 3% arguement that appears rife throughout this thread, I can say honestly when I went to my accountant for last years tax return after my first period of serious investing (more turned trading due to my lack of patience), he appeared shocked to see I was actually well in the green. Surprising considering it was a bullmarket! So maybe some truth rings out there.

Thanks.

Awesomandy

11th-March-2008, 01:19 PM

Just to chime in on the 3% arguement that appears rife throughout this thread, I can say honestly when I went to my accountant for last years tax return after my first period of serious investing (more turned trading due to my lack of patience), he appeared shocked to see I was actually well in the green. Surprising considering it was a bullmarket! So maybe some truth rings out there.

I have actually seen accounts where 25% of the capital was lost during 15 months of trading a few years ago - during the bull market. I'm not sure how they managed that one, and why they went on for more than a year before giving up is completely beyond me.

Having said that, I have also seen well-disiplined accounts that have gained consistently 1% each month for the past 12 months (i.e. including August 07, November 07, and as recently as Jan 08). Money just kept coming in no matter what the market was doing.

MRC & Co

11th-March-2008, 01:34 PM

I have actually seen accounts where 25% of the capital was lost during 15 months of trading a few years ago - during the bull market. I'm not sure how they managed that one, and why they went on for more than a year before giving up is completely beyond me.

Having said that, I have also seen well-disiplined accounts that have gained consistently 1% each month for the past 12 months (i.e. including August 07, November 07, and as recently as Jan 08). Money just kept coming in no matter what the market was doing.

Yeh, how people loose money in a bullmarket is beyond me!

Im sure accountants will be cringing when their clients show them their trading logs this year! Sure to be some HUGE capital losses!

Fortunately, mine will still be well in the green once more (must have found that holy grail, not sure how). I have actually done better this year than last (maybe due to MUCH more time devoted).

Are you an accountant awesomandy?

happyjack

21st-March-2008, 02:39 PM

I just scanned this entire thread and I appear to have missed the part of the tutorial on exits? Was it in there and I just skimmed over it?
.

Hi MRC If you check out the thread

"Trading and when to exit?"

You will get more or less the same people discussing exits

You can use the search facility at the top of the page

Happyjack

happyjack

21st-March-2008, 02:43 PM

Sorry change that to

"exits techa"

and that will take you to

Trading and when to exit?

Happyjack

happyjack

21st-March-2008, 03:16 PM

MRC

Just as a matter of interest My favourite exits are

1) whenever the price goes under the 21 day moving average for more than 5 days

2) If the share falls and hits the 150 day moving average

3) Automatic trailing stop loss of 10% in case I have gone fishing

4) If it is consistently advancing more slowly than its sector

That is to say if ANY of the above happens I sell.

Happyjack

MRC & Co

21st-March-2008, 03:25 PM

Thanks Happyjack!

MRC & Co

21st-March-2008, 04:06 PM

Thanks Happyjack!

On that note, couldnt find any real concerete backtested methods on where to exit.

I.e. As with the 8% stop mentioned on page 1 of this post.

Think I will just trade the momentum for now, a couple downdays I will exit and if that momentum turns back up (next wave up for example) jump back on board.

Not sure if its just me, but exit timing after upward price movements are the hardest part about trading, full-stop!

MRC & Co

21st-March-2008, 04:36 PM

a couple downdays I will exit

Note: Not sideways movement, actual downdays that stand out, in collaboration with my other indicators and fundamental changes.

tech/a

21st-March-2008, 05:33 PM

MRC.

The 8% stop is from my testing over the years in the optimal range for INITIAL STOPS.The stop you place upon entry.
These were tested on a number of systems just based upon % of initial entry price only.

3% and below was too tight and had premature exits and many went on with it after being stopped.
5-10% had the right balance between winning and losing trades and final R/R.
10-20% gave more winners but far less trades resulting in many trades flaoting in no where land.

These results were from my own testing and far from definative.However as a rule Ive found them in LONGER TERM trading to be pretty indicative of results.

To exits.

Try to think in terms of Return to Risk NOT profit.
If you get that right then profit comes with doing more of it.
Short term trades rely on MORE Winning Trades and less R/R
Long term trades rely on LESS Winning trades but more R/R.

I'll give you an example of how I set up a long trade (Short term) and try and explain R/R

First the setup

http://i25.photobucket.com/albums/c68/sceptik/RRtrade.gif

Now I want 3 x R so see if there is a logical place to set a target which my analysis tells me is high probability

http://i25.photobucket.com/albums/c68/sceptik/RRtrade2.gif

The lines to the right are Multiples of the Risk so you can see where 3 x was and where I thought a high probability exit existed.

This is what happened

http://i25.photobucket.com/albums/c68/sceptik/RRtrade3.gif

The stock actually went way beyond my target but that was of no consequence as the trade setup and target was complete so on to the next one.

So how you determine your exit on short term trades doesnt matter as long as you can achieve your R/R more often than not.
So I determine that IN CONJUNCTION with my exit---will a logical technical exit achieve my R/R?

MRC & Co

21st-March-2008, 06:15 PM

Thanks tech, very helpful.

I understand the 8% was only for initial stop placement (but still an interesting observation nonethelss), I read the whole post thoroughly.

As far as this example, you determined your exit through EW yeh?

Another question, have you ever backtested holding past your pre-determined exit point, if, as in this example, the SP is on an upward trend? And any results?

Cheers

tech/a

21st-March-2008, 07:54 PM

No.

I don't care.
My aim is to be profitable.
If I have a 65% hit rate at 3:1 R/R
then I'm happy with that.
If I can crank up the R/R with tighter stops and the above example isn't a very tight stop then my profits soar with EXACTLY the same move.

This can be done if you have shorter term charts and you have one on watch.
My live charts are at the office so I cant give you an example.
But just imagine if the same trade had a 5c risk rather than 15C

I'd have 3x the amount as the position size---same risk---3x the profit---same move.

In the above example my R/R would become 9:1

Worrying about whats left at the table is unproductive.
Knowing what you have and how to minimise losing it is all that matters.
Profits come.
Add Compounding and Correct use of Margin and you wont be worrying about whether you got all of the move.

You got the best part of the move---the one with YOUR profit in it.

julius

21st-March-2008, 08:29 PM

happytrader - once you start using profit targets you get a push/pull effect between equity curve variance and profitability...you decrease risk at the expense of return, regardless of timeframe.

depending on the stategy it's possible to use staggered exits so that you get the reduction in equity curve variance as well as the less frequent, higher %return trades

MRC & Co

21st-March-2008, 10:08 PM

julius

21st-March-2008, 11:25 PM

MRC - my short term systems have a breakeven trigger at roughly ~2:1 R/R. So I'd be waiting for either b/e stops or my profit target to get hit. Set and forget...

That said, I don't use R:R in the same way as Tech/a. For me the R:R is secondary to the set-up; I know where the historical average lies, but the actual return of any given trade is variable.

MRC & Co

22nd-March-2008, 12:00 AM

Julius,

B/e as in break-even? So once your position moves in your favour, you move your stop to break-even?

"For me the R:R is secondary to the set-up; I know where the historical average lies"

Historical average, can you elaborate?

As in, you know which way your set-up is historically likely to move and take actual movements from there?

tech/a

22nd-March-2008, 07:51 AM

Yep agree.

Another question, what if in the above trade, you get to a R/R of 2.5:1 and the trade starts to move against you, say right down to 1.5:1, would you use a trailing stop to gain a portion of that profit? Or wait for it to either hit your 3:1 or stop out?

Cheers

Breakeven and trailing stops used.This actually brings your final R/R up as your not losing your Initial Risk very often.
I only move my stop to B/E at 1:1 R/R

Julius.

Each trade has a variable R/R its not set at 3:1 however less than 2 and I dont take the trade.

julius

22nd-March-2008, 10:15 AM

The price action is dictated by the technical set-up. It doesn't matter where I enter the trade, support/resistance is constant. This is where the historical average comes from because the max return will depend on how early I enter the trade.

So again you have another push / pull relationship, this time between accurary and profit - as you longer wait to confirm the signal you gain %accuracy at the expense of potential $return. The 'risk' remains the same because it defines the point at which the set-up becomes invalid...

tech/a

22nd-March-2008, 11:28 AM

Yes agree.

But would your "Timing" of your setup be helped by taking the signal then trading it off say a 60 min or 120 min chart.

Perhaps using Supprt or resistance in those timeframes going forward and as such minimisim=ng risk and in doing so taking larger positions -- larger profit.

Just wondering.

To make it easier for some to understand taking a weekly signal and trading the entry setup and risk part from a daily chart.

This is ROC weekly

http://i25.photobucket.com/albums/c68/sceptik/SRSetup.gif

Now Daily

http://i25.photobucket.com/albums/c68/sceptik/SRSetup1.gif

With confirmation from Tradeguider.

http://i25.photobucket.com/albums/c68/sceptik/SRSetup2.gif

By coming down a timeframe I can deminish risk and manage the trade tighter with Trailing stops and exits but still have the same Target exit in place.

julius

22nd-March-2008, 12:47 PM

I use dynamic support & resistance levels which are based on a number of different timeframes, so it doesn't matter which timeframe I 'trade', the levels remain the same - ie. the exit point is static.

I don't use trailing stops at all. Breakeven trigger is technical level, ~25% of the profit target, but it varies.

I agree that you can wait for confirmation from higher timeframes...otherwise you can use more reliable signals (with more lag) on lower timefames. That comes back to what you prefer in terms of return vs. accuracy.

MRC & Co

22nd-March-2008, 01:52 PM

Excellent, great info there fellas.

Thanks for the charts tech (always a LOT easier to understand things through charts, thanks for taking the time to post them), great use of EW and VSA. Exceptional use of this on FMG by Radge.

I have found lately that VSA alone on breakdowns is a lot more reliable than on breakouts, due to the downward momentum of the market in general lately.

Would I be right to say, wave 5 down really took off on the very next trading day after those charts? (or are the charts live). That final bar was ominous!

Cheers

tech/a

22nd-March-2008, 03:56 PM

MRC

As your aware Elliott is dynamic.
One of the most difficult concepts for most to come to terms with.
You'll oftn hear complaints that Elliott is useless as the wave counts keep changing.Once you understand how waves are built then you can see a number of different counts (At times) and you can also see going forward what can occur if price action PROVES the count that we are currently in to be incorrect.

I'll use ROC as an example in this case to also hopefully answer your question.

The software is Advanced Get.
If we go to "Training mode" we can watch as the waves are constructed.

http://i25.photobucket.com/albums/c68/sceptik/Wavedynamics.gif

http://i25.photobucket.com/albums/c68/sceptik/Wavedynamics1.gif

http://i25.photobucket.com/albums/c68/sceptik/Wavedynamics2.gif

http://i25.photobucket.com/albums/c68/sceptik/Wavedynamics3.gif

While not a purist in Elliott analysis I find their addition for analysis to define "Where I am in a point of Entry OR Exit" within a move to be very helpful.

MRC & Co

22nd-March-2008, 05:04 PM

Yes, thanks Tech.

Any particular book you can recommend on learning EW and its basics, without going right into the real detail such as a purist would.

I understand the basic concepts, however, would like to learn a bit more on it so I can really get a good grasp of Nicks recommendations and analysis.

Cheers

tech/a

22nd-March-2008, 05:22 PM

2 favorites

Dynamic Trading by Robert Miner
ISBD 0-934380-83-X

Breakthrough Strategies for
Predicting any Market.
Jeff Greenblatt
ISBN-13:978-1-59280-268-5

MRC & Co

22nd-March-2008, 08:19 PM

Thanks.

Will try Dynamic Trading by Robert Miner first and see how I go.

Progster

23rd-March-2008, 01:42 AM

From an early post in this thread:

There is something depressing about accepting that you made a mistake on a trade and taking a loss. Has anyone got any hints on how I can overcome this problem?This question is forever relevant.

I would say that when one gets "depressed" about a trade moving against them, one is committing a significant psychological error: internalizing the action of the market and feeling responsible for it.

You are not responsible for the direction of the market!

You can't make it go one way or the other - not by wishing, not by hoping, not by winning or losing, not by throwing your capital at it, not by any means whatsoever.

What you are responsible for is pulling the trigger to get in and pulling the trigger to get out.

When a trade moves against you and you have a loss, you are being offered the opportunity to do the right thing - which is to GET OUT WHILE THAT LOSS IS STILL SMALL RELATIVE TO YOUR ACCOUNT.

What is "small"? Pick a number, either by elaborate study, or by rule-of-thumb - but just pick a number and stick with it. (e.g. 1 or 2% of your account size)

If you honor your loss number and GET OUT, then you have DONE THE RIGHT THING. There is no reason to be depressed about doing the right thing. In fact, when you do the right thing, you are entitled to a minor bit of self-congratulation.

You can feel good about:

Having a plan

Following your plan

Understanding the basic math of why you MUST take small losses

Demonstrating self-discipline and foresight

Avoiding negative emotional tar pits

Having plenty of capital left for your next trade

If you feel good about yourself, about trading, and about your relationship to trading, your likelihood of success will be FAR higher than if you are unhappy or depressed about same.

Trade very small until you have mastered yourself and your method. Congratulate yourself every time you DO THE RIGHT THING. When doing the right thing becomes a reflexive habit, success will likely be close behind.

BrendonC

12th-December-2008, 12:33 AM

Hi All, :)

Am new to this thread so am catching up. I hope my experience may help anyone here.

There are many traders trying to find a crystal ball set of indicators that is going to predict the direction with a probability greater than 50%, i.e more wins than losses over time. I refer to this a directional based trading mentality which requires getting your indicator fine tuned so as to enter at a precise point so as to hit your profit target hopefully before it hits your stop loss. This works very well for index trading and FX which I do most of. With stocks however, predicting price is very difficult when you have fundamental announcements, and unplanned price gaps on a regular basis (unlike indexes).

So When I trade equities I like to use a non direction based trading system which does not focus so much on getting the direction right but more so focusing on enter at a point where your stop loss will most likely not get hit before your profit does. This does not rely on indicator crystal balls but rather on good analysis of Support and Resistance levels that can provide pivot levels in which to enter. The main focus is placing your stop loss below the fluctuation of prices ( below support levels ). If you then place your profit target at a price level that is not to greedy but still greater than your stop loss % then you stand a higher chance of being a consistant profitable trader. Look for key support levels at historical low levels avoiding descending triangle patterns into the support. If you want to add indicators on top of this then using good backtested divergence indicators will help. Always back test divergence indicators on each stock.

Bottom line: Good money management using price pattern as your main indicator. Of course always diversify and choose fundnamentally sound companies. Never try to predict with stocks because no one really knows, all we can do is take calculated guesses and use the money management principles to ensure over time your profits will outweigh your losses.

Cheers
Brendon