Diary of a swing spread better

[Chorlton]

Hi Hung,

Just discovered this thread and from what I've read so far seems interesting

However, could you just confirm what indicators you are using in your charts. It seems that you use 3 MA's, a 200MA and two quicker ones but what is the indicator in the lower window (blue line) ??

Just interested,

Chorlton

 

[Vaco]

I wonder how long it's going to be, Elefteros You have the whole weekend to tell us

I am particularly intrigued by your DOW short.

Best,

Hung

its a greek tragedy and u can read all about it in my journal

 

[Splitlink]

Before I walked off in a huff on Friday I bought to open WPP. The question is is it a breakout or a pullback?
My intention is to try and turn this into a position trade and not touch it on Monday.

Split

 

[hungvir]

Hi Hung,

Just discovered this thread and from what I've read so far seems interesting

However, could you just confirm what indicators you are using in your charts. It seems that you use 3 MA's, a 200MA and two quicker ones but what is the indicator in the lower window (blue line) ??

Just interested,

Chorlton

Hi Chorlton,

Glad to have you dropped by. The three EMA i am using are 20/40/250. The blue line is RSI 14. I use them just to confirm entries and exits. They don't trigger any trade by themselves though in a trending market you can make money simply by buying when the 20 line and the 40 line cross and go up.

I am looking at Bollinger bands at the moment to test out exiting strategy. For the system I am using when to sell is a more difficult decision than when to buy.

Cheers,

Hung

 

[hungvir]

Split and Don,

Thank you and hope you both have had a great weekend. I took a friend to Cambridge and am just back. The weather was great but for the rain At least we were dry on the boat. I saw an young girl falling into river cam while trying to row the boat

And only now I know that the name Cambridge came from river Cam and the first bridge they built over it. At least that what I was told buy the guide.

Have a good trading week ahead!

Best,

Hung

 

[hungvir]

I've decided to wait until after tomorrow to move stops for all my longs.

It turned out I pocketed 132 points on Friday. Had to make a note of this to see when this record will be broken.

I also made the first capital 'injection' to my Fins' account. My aim is to increase it up to £2000 then stick to my MM rule of only risking 20-40 pounds per trade. Hopefully by this time next year it will be at least double. But even if I lose it all this time, I won't put my hands up. It will come a bit later

 

[hungvir]

its a greek tragedy and u can read all about it in my journal

Just saw it in your journal, my friend :

But let's look on the bright side that you've more than doubled your money at one point and I hope the DOW trade just ate into the profit not your startup money.

Like you, I turned £200 into more than £500 in much less than a month. I then increased my stake, got badly burnt but learnt a huge lesson. I now accept the fact that I still a learner-trader and won't take too much risk.

Best,

Hung

 

[hungvir]

Before I walked off in a huff on Friday I bought to open WPP. The question is is it a breakout or a pullback?
My intention is to try and turn this into a position trade and not touch it on Monday.

Split

Hi Split,

It looks like it will go above 700 again. Well done!

H

 

[Vaco]

Hung,

I've been trding (unsuccessfullly) for about 6 years now, and if theres one thing I've learned its that a bad trade can only reaaly get in your way if your money management is poor. or me now I'm making profits instead of loses not because I've got a great holy grail trading strategybut because my money management is so much better. I'll live to fight another day even if i get stopped out on this one

 

[hungvir]

Hung,

I've been trding (unsuccessfullly) for about 6 years now, and if theres one thing I've learned its that a bad trade can only reaaly get in your way if your money management is poor. or me now I'm making profits instead of loses not because I've got a great holy grail trading strategybut because my money management is so much better. I'll live to fight another day even if i get stopped out on this one

You've nailed it there.

And I think good money management would make trading much less emotional. Say we have 5000 to trade and if we only risk 50 on any single trade then we can easily take it on the chin if a trade goes wrong. But if it's 500 or even worse a thousand or two, then loss of sleep is guaranteed.

Good trading,

Hung

 

[Pagey]

Hi Chorlton,

Glad to have you dropped by. The three EMA i am using are 20/40/250. The blue line is RSI 14. I use them just to confirm entries and exits. They don't trigger any trade by themselves though in a trending market you can make money simply by buying when the 20 line and the 40 line cross and go up.

I am looking at Bollinger bands at the moment to test out exiting strategy. For the system I am using when to sell is a more difficult decision than when to buy.

Cheers,

Hung

Hi Hung

I've been reading your diary for a while now: very interested in the Marc Rivalland approach. So much so I read his book (you should be a salesman and not a journalist!!!).

Anyway, I was wondering, as you seem to be an expert on this strategy, do you not find his 14 day EMA useful for determining trend? And the 14 day RSI - Rivalland believes the 5 day and 5 week RSI useful for this strategy; have you not found that to be true? I must admit I do like confirming with a 12,26,9 MACD.

I'm still a novice but believe the best way to learn is to get stuck in with small amounts, and yes I've learnt a lot by losing a bit of dosh. But this girl's not a quitter and would appreciate some guidance from those with a bit more experience of the markets than myself.

Pagey

 

[hungvir]

Hi Hung

I've been reading your diary for a while now: very interested in the Marc Rivalland approach. So much so I read his book (you should be a salesman and not a journalist!!!).

Anyway, I was wondering, as you seem to be an expert on this strategy, do you not find his 14 day EMA useful for determining trend? And the 14 day RSI - Rivalland believes the 5 day and 5 week RSI useful for this strategy; have you not found that to be true? I must admit I do like confirming with a 12,26,9 MACD.

I'm still a novice but believe the best way to learn is to get stuck in with small amounts, and yes I've learnt a lot by losing a bit of dosh. But this girl's not a quitter and would appreciate some guidance from those with a bit more experience of the markets than myself.

Pagey

Hi Pagey,

Thanks for your post and welcome to the trading world!

You seem to have read the book much more thoroughly than myself. Before using MR's strategy, I just used basic charting techniques (support/resistance) and applied some of the things I took away from a workshop given by an American trader (Chris Manning). So what I am using now is a combination of different bits I've learnt. Haven't tried his 5 day and 5 week RSI but I will. In fact I just told myself to read the book again yesterday.

I have to say MR's method is excellent in a trending market. Unfortunately, market trends only a third of the time and we can't foretell a trading range until it's formed. And this can lead to many false signals if we solely use MR's method.

As you said trading small sizes to test out strategy and learn from every single trade is the way forward. If we're employed by a firm, we would be given at least six month probation. Given that not many of us have relevant educational background or work experience with regards to trading, ours may probably be a year or two. Provided we work hard of course.

Me a salesman?! May be not But I am thinking of applying to become Sir Alan Sugar's next apprentice and a bit of that may help

Good trading,

Hung

 

[hungvir]

Just had a glance at the market and the FTSE went up more than 30 points at one point. It seems like it's going to be another up day today. If the DOW opens higher, then it will surely be a bumper day.

 

[Splitlink]

B/O AVZ for 603.6. Went into profit in minutes. Still waiting for WPP...

In any case, I'm changing my tactics and am going to let them get on with it while I take my wife shopping.

Split

 

[Chorlton]

Hi Chorlton,

Glad to have you dropped by. The three EMA i am using are 20/40/250. The blue line is RSI 14. I use them just to confirm entries and exits. They don't trigger any trade by themselves though in a trending market you can make money simply by buying when the 20 line and the 40 line cross and go up.

I am looking at Bollinger bands at the moment to test out exiting strategy. For the system I am using when to sell is a more difficult decision than when to buy.

Cheers,

Hung

Hi Hung,

Thanks for the reply.

Can I ask how you use your the RSI indicator in your trading? The reason I ask is that you mention trading in trending markets and from my experience the RSI doesn't seem that accurate in such cases. Normally, the RSI remains in either the Overbought or Oversold areas (obviously depending if the trend is bullish or not).

Kind Regards,

Chorlton

 

[hungvir]

Hi Hung,

Thanks for the reply.

Can I ask how you use your the RSI indicator in your trading? The reason I ask is that you mention trading in trending markets and from my experience the RSI doesn't seem that accurate in such cases. Normally, the RSI remains in either the Overbought or Oversold areas (obviously depending if the trend is bullish or not).

Kind Regards,

Chorlton

You're welcome, Chorlton.

With regards to the RSI, I tend to wait for the price to pull back from overbought to buy or from oversold to sell. RSI can't stay at extremes forever or we'll have a stack of price bars one on top of another (it would be magic, wouldn't it .

Hope you've been doing alright with trading.

Best,

Hung

 

[Chorlton]

You're welcome, Chorlton.

With regards to the RSI, I tend to wait for the price to pull back from overbought to buy or from oversold to sell. RSI can't stay at extremes forever or we'll have a stack of price bars one on top of another (it would be magic, wouldn't it .

Hope you've been doing alright with trading.

Best,

Hung

Once again, thanks for the reply & I apologise if my questions are a little basic

With regard to RSI, can I ask what levels constitute a buy and sell for you. Do you use the standard 30 & 70 levels??

I ask because from memory I have noticed a number of stock charts that due to their constant upward (or downward trend) have the RSI either in the overbought or oversold areas for a great amount of time. Even when the stock undergoes a pullback the RSI can still maintain at a level either above the 70 or below the 30 levels.

Unfortunately, as I'm not at home I am unable to check my charts and confirm which stocks these are.

Consequently, in these cases I have found the use of RSI to not be very effective but obviously I would welcome any advice on how I can make better use of this indicator.

btw I hope your trading is also going well...........

Chorlton

 

[Pagey]

Once again, thanks for the reply & I apologise if my questions are a little basic

With regard to RSI, can I ask what levels constitute a buy and sell for you. Do you use the standard 30 & 70 levels??

I ask because from memory I have noticed a number of stock charts that due to their constant upward (or downward trend) have the RSI either in the overbought or oversold areas for a great amount of time. Even when the stock undergoes a pullback the RSI can still maintain at a level either above the 70 or below the 30 levels.

Unfortunately, as I'm not at home I am unable to check my charts and confirm which stocks these are.

Consequently, in these cases I have found the use of RSI to not be very effective but obviously I would welcome any advice on how I can make better use of this indicator.

btw I hope your trading is also going well...........

Chorlton

Hi Chorlton

I'm not meaning to but in here but the reason I asked Hung about his RSI setting was for that reason. MR's theory is that if the 5 week RSI is >82 or <18 then don't get in a trade - using the weekly RSI does tend to "smooth" the the fluctuations that happen on the daily chart. I haven't tested this but apparently it gives a more accurate indication of overbought/sold as a single day's move could shoot the reading from midpoint to extreme.

As I mentioned I'm a novice but I have done a fair amount of reading and observation in the past 6+ months and this at the moment seems to be the best adaption of the indicator. But it's just my personal opinion and I'm prepared to be told otherwise.

Pagey

 

[hungvir]

Chorlton and Pagey,

The main reason that I am still using the 14 day RSI is just that old habit dies hard. I used it in combination with EMA for quite a while before I stopped trading some years ago. But as Pagey said, the 5 week one has been tested by MR over a number of years and it has stood the test of time. (Thanks for that Pagey!).

I have to say I am following MR's method in spirit but not in great details. For example, I've openned positions after just a two day drop (instead of three). For 'super' stock like EMG, waiting for a three day drop would mean that many money making opportunities are wasted. If you'd seen some of the EMG charts I posted, you would have agreed. EMG still went up some 20 points today while the FTSE close down more than 20 points.

Great talking to you and good trading,

Hung

 

[hungvir]

Unilever

I am waiting for a chance to short ULVR. I have no idea what caused the gap-down but the assumption is it will get a bit worse before it gets better.