Australian (ASX) Stock Market Forum

Dump it Here

Joined
28 December 2013
Posts
3,983
Reactions
17,771
Hi Skate, wouldn't it be safer to trade on a daily basis and leave no capital exposure overnight because of the uncertainty? We never know what the night will bring nowadays (although we do get a sense of what is to come, but never any guarantees that our judgement/ assessment is right)

@eskys, every word you have posted is valid & you won't get an argument from me "but finding a trading method" that actually works that you can consistently stick to is not as simple as it sounds.

Trading Consistently
Being Methodical & Consistent will put you on the road to success but the real issue that faces us all is "determining" whether your methodology or any other trading methodology will be profitable. Having no exposure overnight is beneficial to some but it's not me as a trend trader. Even trading a good system it is hard for me to tell when a trend starts & when it finishes. Grabbing the meaty part of the move over & over works for me.

It's a pity but it's a fact of trading
.
Everything about system development is always a tradeoff & there are no absolute ‘right answers’ to achieve a perfect system. What works once might not work again, so you always have to stay on top of your game.

Day trading
If you are considering Day Trading then be "Very, Very, Careful" as there are sharks in them waters!

Skate.
 
Joined
28 December 2013
Posts
3,983
Reactions
17,771
We never know what the night will bring nowadays

We don't know what tomorrow brings but we act as if we do
Even experienced traders don't have a clue most of the time & for that very reason, the markets are behaving as they are. "Mr flippe floppe flye" refers to these erratic overnight shifts as “fu¢k you patterns”.

Howard Bandy is very experienced
He has posted that "holding only a few days, again & again", is his methodology for being profitable. Doing it "his way" works for him. Howard even goes on to remark that holding positions beyond three days increases the risk considerably, & accuracy goes out the window. My research is at odds with his findings & his way of trading is not right for me.

A short holding period is not for me
Trading over a period of a day or three is easier said than done. I prefer to trade weekly. In summary, I should point out that Howard knows what he talking about, he's smarter than the average bunny.

Skate.
 
Joined
20 December 2021
Posts
261
Reactions
563
@eskys, every word you have posted is valid & you won't get an argument from me "but finding a trading method" that actually works that you can consistently stick to is not as simple as it sounds.

Trading Consistently
Being Methodical & Consistent will put you on the road to success but the real issue that faces us all is "determining" whether your methodology or any other trading methodology will be profitable. Having no exposure overnight is beneficial to some but it's not me as a trend trader. Even trading a good system it is hard for me to tell when a trend starts & when it finishes. Grabbing the meaty part of the move over & over works for me.

It's a pity but it's a fact of trading.
Everything about system development is always a tradeoff & there are no absolute ‘right answers’ to achieve a perfect system. What works once might not work again, so you always have to stay on top of your game.

Day trading
If you are considering Day Trading then be "Very, Very, Careful" as there are sharks in them waters!

Skate.
Agree, there are times when I've held when I was relatively confident that a particular stock was uptrending...that's where flexibility and judgement comes into trading. When I'm uncertain, I don't hold........my method is to get out and be safe......make less money and not live to regret. There was a time lately when I was so distracted and confused with what was going on around me that I didnt' take action.....won't repeat that again. One or two loses can stuff up a whole week's trading efforts!
 
Joined
28 December 2013
Posts
3,983
Reactions
17,771
Random thought

@eskys, when others post it stimulates discussion
I've made a lot of posts to stimulate members to open up & express their trading ideas as trading is confusing for the best of us. The good feature of this thread is that there is no right or wrong & everyone enjoys reading what others have to say. When others make a comment or express an alternative view makes others think "to some degree" about there way of trading as we are all searching for something better.

As I make the most posts, I slant the thread
When I comment it's always about me & my style of system trading, & admittedly others will hold a different view. I trade the All Ordinaries only, the top 500 companies listed on the ASX.

Skate.
 
Joined
28 December 2013
Posts
3,983
Reactions
17,771
there are times when I've held when I was relatively confident that a particular stock was uptrending...that's where flexibility and judgement comes into trading. When I'm uncertain, I don't hold........my method is to get out and be safe......make less money and not live to regret.

I make money from the markets, but I don't consider myself a true trader
@eskys I don't enjoy the flexibility & judgment when it comes to trading as you have described. To be perfectly frank, as a system trader, "I don't even know what companies I'm buying" let alone the sector they belong to.

I'm just buying ASX codes
But what I do know is I buy positions that meet my buy conditions & sell those positions when the system says to do so. I do it "consistently" without hesitation. Trading this way, you win some & you lose some but for me it's profitable.

Skate.
 
Joined
20 December 2021
Posts
261
Reactions
563
We're very different there, Skate. I'm a sector watcher and stock picker within certain sectors. There's no right or wrong.......so long as we make money, whichever method we use is good. The most important thing is not to LOSE money. Happy you are are successful in your method, Skate. Congratulations.

I'm thinking about food again, dinner time soon. (went out for lunch and being a short sighted person, ate and come back, no take away) Now have to think about what to cook for dinner. Have a great evening, Skate. Thanks for your time today........have a great evening.
 
Joined
28 December 2013
Posts
3,983
Reactions
17,771
I'm thinking about food again

When others post it opens the floodgates
I try not to post too much these days but responding to others is a perfect segue for me to lay down a few words. You are correct when you say "so long as we make money, whichever method we use is good" that's what I keep saying as well. I'm constantly saying in different ways that "Trading", requires planning, preparation, knowledge & experience.

When others post it allows me to make some random comments
At times I will stay on a topic whereas other times I'll post what I'm thinking. As this is a "beginner's thread" I try my hardest to point out that education is the key because the majority of those starting out will not accept how little they know. Without an education, they are in real danger because most are not capable of taking responsibility for their own actions.

Skate.
 
Joined
30 June 2007
Posts
6,189
Reactions
638
We don't know what tomorrow brings but we act as if we do
Even experienced traders don't have a clue most of the time & for that very reason, the markets are behaving as they are. "Mr flippe floppe flye" refers to these erratic overnight shifts as “fu¢k you patterns”.

Howard Bandy is very experienced
He has posted that "holding only a few days, again & again", is his methodology for being profitable. Doing it "his way" works for him. Howard even goes on to remark that holding positions beyond three days increases the risk considerably, & accuracy goes out the window. My research is at odds with his findings & his way of trading is not right for me.

A short holding period is not for me
Trading over a period of a day or three is easier said than done. I prefer to trade weekly. In summary, I should point out that Howard knows what he talking about, he's smarter than the average bunny.

Skate.
Hi Skate, how's it going? Seems like you're doing very well by the looks of the results posted here.

I think Howard trades EOD mean reversion, and time stops of 2-3 days are optimal for that. Often combined with a profit target and no stop loss. And a win rate of 66.666%. For some reason, almost all MR systems have a WR very close to that figure.
 
Joined
28 December 2013
Posts
3,983
Reactions
17,771
I think Howard trades EOD mean reversion, and time stops of 2-3 days are optimal for that. Often combined with a profit target and no stop loss.


@Gringotts Bank I noticed you were back making a few posts which were great to see. Also, you are absolutely correct about how Howard trades. I made a few lengthy posts about his preferred method of trading a few years back that I've never forgotten. Howard is well respected & competent. Any man who gives me one of his books for free is okay as far as I'm concerned.

Skate.
 
Joined
28 December 2013
Posts
3,983
Reactions
17,771
Howard is well respected & competent

Now I'm thinking about being competent
There are some highly skilled traders on this forum who trade differently from most. In trading terms, they no longer need to follow a set trading system but patiently wait for a setup, & then take the trade. These traders are "unconsciously competent". They appear to trade using their so-called 'intuition', but are in fact, applying their vast knowledge & skill to recognise low-risk, high-profit potential, trades.

Skate.
 
Joined
28 December 2013
Posts
3,983
Reactions
17,771
Traders have a reason for trading
Every trader has a reason for trading, & the Internet is a cheap & effective source of information, including articles on an almost infinite range of topics. Self-education is an ongoing process that you should be serious about it. The reasons why most traders fail to profit from their trading do so because they do not have a proven trading system when starting out.

I believe trading would be much easier using other people's money
When you’re dealing with your own money, trading gets very complicated, very quickly. It has already been pointed out today emotions that can override a trader's determination to follow their trading exactly.

Skate.
 
Joined
25 July 2016
Posts
230
Reactions
427
My second random thought this week. Had a bit of time to look at Real Test software. Initial reaction is I am really impressed.
@Skate This would really suit you. The strategy combination feature is very powerful. There is a Real Test thread on ASF also.
 
Joined
28 December 2013
Posts
3,983
Reactions
17,771
My second random thought this week. Had a bit of time to look at Real Test software. Initial reaction is I am really impressed.
@Skate This would really suit you. The strategy combination feature is very powerful. There is a Real Test thread on ASF also.

@investtrader thanks for bringing this to my attention. I have read the thread & look at the software, even sitting through one of their lengthy YouTube videos on how the software works. No matter the software it all depends on data & how we can glean information from it to make a trading decision. Amibroker works extremely well & it's working for me at the moment. Until I believe there is something better "for me", I'll stick to what I know.

Skate.
 
Joined
28 December 2013
Posts
3,983
Reactions
17,771
Just to clarify ... I have thousands of random thoughts which can be a problem. But this my 2nd for here.

Dump it here
Yes, if you are like me I can't get rid of some thoughts or ideas until I put them to paper. Expressing ideas is how we learn. Just because you know something doesn't automatically mean others do. If at any time you have an idea or a helpful comment, this is the perfect thread to dump it in.

Skate.
 
Joined
13 February 2006
Posts
3,945
Reactions
6,879
Morning chaps,

So yesterday there seemed to be quite a flurry of posts.

Screen Shot 2022-09-18 at 6.49.57 AM.png

Bear markets are actually quite easy to see coming, after all, it is simply an inverse of the rule: never fight the Fed.

Screen Shot 2022-09-18 at 6.37.58 AM.png

The US economy is still the largest in the world. The US economy is now and has been for some time the financial markets. Therefore when the US financial markets are in trouble, all financial markets are in trouble. Any number of economies will crash.

The FFR (black line) is the rate under the control of the Fed. You can see when it inverts, we have bad outcomes (black above the green). Currently the Fed is raising the FFR. We will get another 75bps and the chatter is for potentially 100bps. For stock markets, that is very bad.

As a comparison:

Screen Shot 2022-09-18 at 7.02.30 AM.png



The US dollar strong. Why?

Screen Shot 2022-09-18 at 6.43.00 AM.png

Screen Shot 2022-09-18 at 6.42.31 AM.png Screen Shot 2022-09-18 at 6.44.32 AM.png Screen Shot 2022-09-18 at 6.44.49 AM.png

Because as the FFR rises, Eurodollars become increasingly burdensome upon their holders. ATM Eurodollars are a sell and will continue to be a sell until something breaks, similar to the upper chart. Why did the upper chart break in Oct/Nov 2019? Go back and look at the yield curve. A sell of Eurodollars is a buy for dollars.

SPY

Screen Shot 2022-09-18 at 6.47.16 AM.png


Your market

Screen Shot 2022-09-18 at 6.47.48 AM.png


Why will this bear get worse?

Very simple: inflation, as it has already demonstrated, upsets the peasants tremendously. The pitchforks and torches come out. Politically this is suicide. Therefore, Mr Powell has been tasked with lowering inflation fast.

One way to lower inflation is to create a recession. A recession dulls demand.

There can be no 'Volcker' moment as every 100bps rise in the FFR adds $300B to the interest burden on the US National debt, currently sitting at $31T. Never mind another $100T in Medicare/Medicaid/Social Security. Never mind you military etc.

Add in Mr Putin and China, who are now fully engaged in attacking the dollar and thereby ending the 1 tool that the US has relied on since 1971 to dig itself out of the shite. Imagine if the US had to pay for energy, rather than printing up some paper for it.

The Fed will pivot. At some point they have to. If they don't, then we will have a repeat, only worse of the 1930's. That market declined 89%. This of course is a DEFLATIONARY bust.

If/when Mr Powell pivots, the issue once again returns to an inflation issue. Stocks do not do well in an inflationary environment. Simply look at the 1970's. (1969 - 1982).

True bear markets save the worst for last:

Screen Shot 2022-09-18 at 7.25.57 AM.png Screen Shot 2022-09-18 at 7.26.19 AM.png

This is a true bear market. It is so because, the Fed is now powerless. They raise rates, they kill the market, the economy and all the crony politicians. They lower rates, they kill the market, the dollar and all the crony politicians.

The next shoe to drop will be the liquidity crisis. Pressure is already building:

Screen Shot 2022-09-18 at 7.22.14 AM.png

What is a liquidity crisis?

Simple: no buyers and lots of sellers.

In previous liquidity crises, the Fed has become the buyer of last resort (re-liquifying the market). Currently, the Fed has just increased the QT programme from $48B/month to $95B/month. That is to say the Fed is a seller, not a buyer. LOL.

Those that are awake will know that bank accounts in a number of countries have been frozen at some point. Cash in a bank account is not 100% risk free.

Markets have been closed on numerous occasions, sometimes for years. Capital in brokerage accounts/markets is not 100% risk free.

If you don't hold it, you don't own it is the maxim that today is critical to understand.

jog on
duc
 
Joined
16 June 2011
Posts
1,120
Reactions
1,056
We're very different there, Skate. I'm a sector watcher and stock picker within certain sectors. There's no right or wrong.......so long as we make money, whichever method we use is good. The most important thing is not to LOSE money. Happy you are are successful in your method, Skate. Congratulations.

I'm thinking about food again, dinner time soon. (went out for lunch and being a short sighted person, ate and come back, no take away) Now have to think about what to cook for dinner. Have a great evening, Skate. Thanks for your time today........have a great evening.
You said eskys "most important thing in trading is not to LOSE money" which in principle I agree with but as a frequent short-term trader knowing when to cut a losing trade & accepting the odd loss here & there is part & parcel of the trading game (thing is when I decide to cut a losing trade I ensure to try have a backup plan/good potential rebound trade to get into soon thereafter... most times this method has worked out very well for me in getting ahead/recovering $$ quickly after a losing trade).

I learnt that cutting losses early & getting out/rescuing capital is one of the most important trading lesson's one can learn/implement in capital preservation. I don't fret anymore about hitting the "sell button" when necessary/required & don't regret it afterwards which helps me stay in control/sleep well at night :)
 
Joined
28 December 2013
Posts
3,983
Reactions
17,771
I don't fret anymore about hitting the "sell button"

@Telamelo is basically saying that the market will always offer opportunities in which to profit, so we need to make sure we always have capital that isn’t tied up in underperforming stocks.

If you don't hit the sell button you will quickly turn a trade into a long-term investment
With my style of trading (Weekly Trend Trading), it's a given that 50% of the signals taken will be duds, accepting this allows you to use the biggest tool in your trading toolbox, the "sell button". I've made plenty of posts explaining that selling is where the money is made. Successful trading is largely the art of selling. Buying is easy.

Selling is a valuable tactical tool
Selling is by far the most valuable tactical tool that any trader has at their disposal. Selling is cheap, easy & can be undone in the blink of an eye. When in doubt, I say "pull out". For most traders, the biggest stumbling block to selling is mental.

Skate.
 
Joined
20 December 2021
Posts
261
Reactions
563
You said eskys "most important thing in trading is not to LOSE money" which in principle I agree with but as a frequent short-term trader knowing when to cut a losing trade & accepting the odd loss here & there is part & parcel of the trading game (thing is when I decide to cut a losing trade I ensure to try have a backup plan/good potential rebound trade to get into soon thereafter... most times this method has worked out very well for me in getting ahead/recovering $$ quickly after a losing trade).

I learnt that cutting losses early & getting out/rescuing capital is one of the most important trading lesson's one can learn/implement in capital preservation. I don't fret anymore about hitting the "sell button" when necessary/required & don't regret it afterwards which helps me stay in control/sleep well at night :)
That's the hallmark of a good trader, Tela, well done. Some traders find it difficult to cut loses and see herself getting into deeper water (speaking of someone I know) We cannot expect a certain price. The market will only give what it has to give..........ask for more when there's nothing more to give is only asking for trouble.
 
Joined
20 December 2021
Posts
261
Reactions
563
Traders have a reason for trading
Every trader has a reason for trading, & the Internet is a cheap & effective source of information, including articles on an almost infinite range of topics. Self-education is an ongoing process that you should be serious about it. The reasons why most traders fail to profit from their trading do so because they do not have a proven trading system when starting out.

I believe trading would be much easier using other people's money
When you’re dealing with your own money, trading gets very complicated, very quickly. It has already been pointed out today emotions that can override a trader's determination to follow their trading exactly.

Skate.
Good morning Skate, sorry, i'm in a bit of a hurry this morning. Need to meet my tribe..........your second paragraph.....I find that harder to work with other people's money.........I am too anxious about losing their dough. When it comes to my own, I can take more risks (only got myself to answer to) See you later...........
 
Top