Diary of a swing spread better

[hungvir]

Many thanks, Chorlton.

I am thinking about buying them on a up day as well. The trouble is the lows and highs of the past few days were miles away which makes my method of buying when the high is breached with a stop loss at a bit below the low almost unusable. I would be risking 100-150 points

Thanks again for your post though!

Hung

 

[Chorlton]

Many thanks, Chorlton.

I am thinking about buying them on a up day as well. The trouble is the lows and highs of the past few days were miles away which makes my method of buying when the high is breached with a stop loss at a bit below the low almost unusable. I would be risking 100-150 points

Thanks again for your post though!

Hung

Just for clarification, would your stop be positioned "at a bit below" the previous day or on the same day on which the SP made a high? Also, when you say "high is breached", are you referring to the previous high (based over a set time frame ie. last 30 days) or the high of the previous day?

btw: In the case of EMG, if you feel that Fibs are suitable for basing trading decisions on, couldn't you place your stop just below the nearest Fib retracement line? Just interested...........

All the best,

Chorlton

 

[hungvir]

Hi Chorlton,

Let me explain the reasoning behind the method I am following.

Assuming the trend has not changed (the price has dropped thru the most recent low for most shares, so this assumption is a bit feeble), I want to buy when the market shows some relative strength which may signal the end of the correction. That is when the price breaks thru the previous day's high by about 10 points (to avoid stop hunting monsters . In effect, I assume that the previous day's low would be a new significant low and the price would never get there again unless this bull market turns into a bear one.

I may be wrong and would end up losing hundreds of points but the rewards are thousands of points as well (for multiple longs).

Even if I use Fib lines to place my stops, the risk is still too much. But I am willing to take that risk. I still believe there're lots of money out there and all the fund managers will come in at a price they deem good enough. At the end of the day, only amateurs lose. The smart guys have already by put options weeks ago.

Good trading,

Hung

 

[Splitlink]

This morning I saw that WOS had risen a lot on the open and, since it was a share in a severe downtrend I decided that a pullback trade was called for. I shorted near the top at 1211.8 with a market stop of 1220 and managed to get 26 points out of it.

I used the support line to get out and I see now that there has been a reversal and I should have bought to open.

I think I'd better go for a cup of tea and a siesta.

Split

 

[hungvir]

A siesta ?? I should move there, Split

For me, XTA rose enough to 'drag' me in the market then dropped enough to make me sad I initially decided on a fixed stop loss but then changed it to the original rule of play - a stop loss at below yesterday's low. It's gone down to 20 points from my stop loss and hopefully yesterday's low was the bottom of this correction.

Good trading,

Hung

 

[Vaco]

U guys like xta so much i thought i'd add my 2 cents, todays candle tells me its going down on monday.

 

[hungvir]

It's the DOW's turn to sit right there on the 38 per cent Fib level. Hopefully we'll see a rally before the sell-off resumes (if it ever does).

 

[hungvir]

U guys like xta so much i thought i'd add my 2 cents, todays candle tells me its going down on monday.

That's what I think. But the risk/reward favours staying in with the position. And we never know. The DOW managed to have an up day today. I will really hate it if XTA opens low enough on Monday to shake me out then move all the way up

 

[Splitlink]

Don't fight the market, Hung, it's going down. For the present, any rise, IMO, should be taken as a selling opportunity.. I've been fighting the market over the last few weeks and, as you know, I haven't been doing well at all until this week. Now, I have taken notice of that downward slope: and have switched to shorting pullbacks, instead of buying them and it has made a hell of a difference. Footsie has been going down since April 21. It may go up, but that is not what I am seeing on the chart.

Before I went to work I shorted GUS at 966. It closed a couple of points to the good, let's see what happens on Monday.

You mentioned siestas. Great things, just twenty minutes in the armchair seems to relax all my muscles and sets me up for the afternoon.

Have a nice weekend, everyone.

Split

 

[hungvir]

Thanks, Split. I have no idea which way the market will go next but I'll let my stop loss take care of XTA anyway.

Regarding siestas, I can afford to have it when I work on my own like tonight (I know, not the right time or on Sunday I just set my mobile to wake me up after 20-30 minutes.

Enjoy your weekend there too.

Best,

Hung

P.S. You must be happy that Thierry Henry will stay on with the Gunners till 2010.

 

[Splitlink]

Morning, Hung,

The Spanish team I follow over here is Español. They almost went down to second division this year but they don't mix the game with politics the way Barça does. But Arsenal is the club that my uncle took me to as a boy and they caught me young. It will always be THE club! So Henry has the club in his blood, too. They may have offered him a good raise, though- we must be realistic!

I was very fortunate with WOS (or was I)? After I closed with my 26 points, the share reversed 40 points. Maybe, this is a share to stay with, instead of chopping and changing around. There is a lot to be said for the way you stay with EMG and MKS, it makes for less work and you get to know the share.

Split

 

[Vaco]

It's the DOW's turn to sit right there on the 38 per cent Fib level. Hopefully we'll see a rally before the sell-off resumes (if it ever does).

I couldn't agree more, i got stopped out on my dow trade but i've gone back in long at 11125, after the market went down on thursday i was worried due to my friday rule but it started so well i held on, in the end it went down just enough to stop me out at11075 how frustrating when u get stopped out at the low of the day only to c it move back in your favour.

I think next week will consolidate around the current price before breaking out one way or the other the week after.

Nice w/end everyone

 

[hungvir]

I couldn't agree more, i got stopped out on my dow trade but i've gone back in long at 11125, after the market went down on thursday i was worried due to my friday rule but it started so well i held on, in the end it went down just enough to stop me out at11075 how frustrating when u get stopped out at the low of the day only to c it move back in your favour.

I think next week will consolidate around the current price before breaking out one way or the other the week after.

Nice w/end everyone

Elefteros,

You must have been gutted that part of your winnings was taken away. The last week was so volatile that any kinds of stops but the folly were taken out. That's why trading books advise us to enter in mild time and exit in wild time.

For me, I was not stopped out of XTA yet but the entry-stop loss distance is around 150 points This is out of my confort zone of 50 and it will likely be my last trade with that wide stop until my capital is increased or the odds are more in my favour.

Best,

Hung

 

[hungvir]

Morning, Hung,

The Spanish team I follow over here is Español. They almost went down to second division this year but they don't mix the game with politics the way Barça does. But Arsenal is the club that my uncle took me to as a boy and they caught me young. It will always be THE club! So Henry has the club in his blood, too. They may have offered him a good raise, though- we must be realistic!

I was very fortunate with WOS (or was I)? After I closed with my 26 points, the share reversed 40 points. Maybe, this is a share to stay with, instead of chopping and changing around. There is a lot to be said for the way you stay with EMG and MKS, it makes for less work and you get to know the share.

Split

Split,

I envy with people like you who are so passionate about football. I like it but still can live without it. But to choose between my work and watching the coming World Cup I would of course choose the later

With regard to your WOS, it showed that timing is everything in trading. I still remember that the two DOW trades that lost me the most of money were profitable as soon as I was stopped out

I really want to stay with a few shares and indices and only trade when they present trading opportunities. When I used ShareScope, I spent half of the time data-mining but ended up trading just a tiny portion of the shares resulted from it.

Later,

Hung

 

[Vaco]

Elefteros,

You must have been gutted that part of your winnings was taken away. The last week was so volatile that any kinds of stops but the folly were taken out. That's why trading books advise us to enter in mild time and exit in wild time.

For me, I was not stopped out of XTA yet but the entry-stop loss distance is around 150 points This is out of my confort zone of 50 and it will likely be my last trade with that wide stop until my capital is increased or the odds are more in my favour.

Best,

Hung

I try not to let it get to me otherwise you start getting into the very bad habbit of moving stops and that can be costly especially in volatile conditions, as for your xta trade if you feel the 'right' stop is too far away maybe its time to take profit and close the trade, you dont always have to wait to get stopped out

 

[hungvir]

Ah hah, the thing about my XTA trade is I am 100 points away from break even

 

[Splitlink]

Ah hah, the thing about my XTA trade is I am 100 points away from break even

The problem that I found, when I used deep stops, is that when I increased my stake I could not use the same system because I worried about the the financial risk involved. So, if deep stops are acceptable when the stake is minimum but not acceptable when they are increased I had to get used to them being closer. That is what I try to do now. The art is to try not to get them so close that they get triggered too often. I could not live with 100 point stops, my plan and chart pattern would be so destroyed that I would have had to have known, well before , that I should not be in the trade.

That is the whole of my plan. (1) To identify the trend properly (2) Close stops (relative to the share-they are all different) (3) Stops and risk are the same, so I try to reduce that by entering on pullbacks. Trade on overbought/oversold points on the bar, never using indicators.

Right now I am identifying about 40 shares that are goiing down and fit my watch list.. My task is to reduce them to two and stay with them, but my butterfly mentality on this point can never be satisfied with them for long. I, simply, have to see how the others are doing. How to find a few shares that, very frequently, throw up good trading signals?

Split

 

[hungvir]

Hi Split,

I tend to hold positions for weeks and aim to earn hundreds of points from each of them so I don't mind wide stop losses. EMG at one point earned me roughly 250 points in three days (but I ended up taking only 80).

But I have to admit that a stop of more than 100 points is too much for me at the moment. Though I may be able to afford it later as I go on and earn more from the market.

It's interesting that you never use indicators. I find the momentum ones quite useful.

The thing here is we're all dealing with probability and how much you trust your system is very important. In a trending market, I have total trust in the method I've been using. But when it gets choppy, when there's no 'long life' trend, I don't think it's going to make me any money. Will have to sort this out.

Later,

Hung

 

[Vaco]

the size of your position should not dictate the position of your stop your system and the data u use to evaluate the instrument should, if you feel that you would lose too much putting your stop where it should be then your stake is too high and you need to look at your money management.

Remember greed and fear are the enemy, your trading should leave you feeling relaxed or even better bored. Thats how you know your doing it right.

 

[minarque]

Hi Splitlink,
Just the fact that you said you supported Espanyol made me realize what a clever fellow to follow you were. I'm Spanish but live in Southport (UK), and I have been an Espanyol fan since I was a kid at school.

I'm not very good at trading yet but I'm trying my best to learn fast. I've joined Finspread and I'm reading through their Academy Trading Course which I find interesting but they explain things as if one were an expert already, not understanding that beginners (like me) need more down to earth explanations.
Anyway, I've just discovered T2W and I think it's great! I'll be reading your wise and cracking bits of advice!!
Cheers, Minarque