Diary of a swing spread better

[barjon]

Yes, congratulations. About two months ago, when this thread started, I lost 103 points on an overnight trade with DMGT. Since then I have been up and down like a yo-yo, gradually getting it back until, yesterday, it was reduced to a net 10 points. That is, frankly, lousy, considering the good downtrend and now,a three day uptrend, that we have had, so you can see that I am going through a period of wondering what to do right.

Split

split

ouch - are you trading purely intraday now?

It's been a frustrating couple of weeks, the drop was so steep that it moved a lot of my stable into potential down trend with not a trade in sight and all the subsequent rise has done is to give me a dozen or so potential shorts. So, 600 points down ftse and nigh on 300 up and I've been virtually tradeless throughout. ...... and you think your +93 is lousy :cheesy:

good trading

jon

 

[Splitlink]

split

ouch - are you trading purely intraday now?

It's been a frustrating couple of weeks, the drop was so steep that it moved a lot of my stable into potential down trend with not a trade in sight and all the subsequent rise has done is to give me a dozen or so potential shorts. So, 600 points down ftse and nigh on 300 up and I've been virtually tradeless throughout. ...... and you think your +93 is lousy :cheesy:

good trading

jon

Your NRK is a case in point. One of the few times I went long recently was with NRK , which aroused your interest with a post.. It went lower, stopping me out, but it has bounced up again in what I think is just a pullback prior to a further fall. The question for me is, when is this going to happen or is it a change to an uptrend?

That +93 points is the result of a series of 36 winning and losing trades ( I've just counted them) since the 17th Feb in an attempt to eliminate that DMGT loss. Although I 've done it it is a poor show. Most of them were overnight trades but not much longer. The fact is, I am trading against the trend and my fairly close stops are triggering, with the result that I generate overtrading.

Split

 

[hungvir]

swing tradiing over days rather then hours is not that 'hairy' and can be very rewarding, i find it much less stressfull then day trading and the rewards can be very erm rewarding take my initial entry in to my current long which was at 11015 i'm currently up 260 pts and i still c myself as a novice,

It would take a very very good day trader to take 260 pts out of the dow in 3 days.

Elefteros,

That's certainly an impressive trade. But you haven't closed it yet, mate

I had a FTSE swing trade that at one point showed a nice profit but it ended up a losing one. Of course, I was too greedy.

And then there's risk/reward ratio. A day trader know exactly (well most of the time) how much he/she might lose if the trade does not go his/her way. For us 'swingers', there's a slight risk that the market may gap up or down the day after we sell or buy and the risk is higher. And when you take higher risk, of course you're entittled to higher return.

But it was a very good and brave call from your side. The double bottom pattern on the hourly chart actually just finished forming on Thursday.

Good trading,

Hung

 

[hungvir]

Yes, congratulations. About two months ago, when this thread started, I lost 103 points on an overnight trade with DMGT. Since then I have been up and down like a yo-yo, gradually getting it back until, yesterday, it was reduced to a net 10 points. That is, frankly, lousy, considering the good downtrend and now,a three day uptrend, that we have had, so you can see that I am going through a period of wondering what to do right.

Split

Split,

If you take your DMGT loss and multiply it with the Fibonacci number of 3 you'll get close to what I've lost since this thread started But I learnt so much in that short span of time that the 'learning fee' was well 'spent'

I may be wrong here, but you seem to have traded against the daily trend for the last few days - exactly what you told me not to do. The shorterm down trend might resume any time or it might not but the market is trying to stand up with some success.

Thanks to Chris, I've looked at more variety of charts before starting my trading day and I try to stick with the daily trend until there's a very convincing case for doing otherwise.

Cheers,

Hung

 

[hungvir]

Split and Jon,

Staying out of it altogether when in doubt is very wise. My record loss of 200 points plus on XTA was because I put on a trade when I was not sure which way the market would go. And I still went long after a lower low was made. Big mistake.

I now listen to the market very carefully. If a lower low is made, I either stay out of wait for a pull back to short (not long . I am not sure if you use the same strategy, Split but if I go short I would wait for a pull back and open a short trade when the previous low was breached. My stop loss distance is a whole bar but then the market shows its weakness more clearly. I I try to short it at the top, the risk of it going higher is very high.

Later,

Hung

 

[hungvir]

By 'previous low', I mean the low of the previous bar. Can it can be minute, 5, 10, 60 or daily.

 

[Splitlink]

Hi Hung,

If you take your DMGT loss and multiply it with the Fibonacci number of 3 you'll get close to what I've lost since this thread started But I learnt so much in that short span of time that the 'learning fee' was well 'spent'

You guys are making me feel better already!

may be wrong here, but you seem to have traded against the daily trend for the last few days - exactly what you told me not to do. The shorterm down trend might resume any time or it might not but the market is trying to stand up with some success.

Don't rub it in! Actually, I was warning you about the main trend that started from April. I'm not sure that it is over, yet.. You have been spotting the turn better than me, no doubt about that.

Split

 

[Vaco]

Elefteros,

That's certainly an impressive trade. But you haven't closed it yet, mate

I had a FTSE swing trade that at one point showed a nice profit but it ended up a losing one. Of course, I was too greedy.

And then there's risk/reward ratio. A day trader know exactly (well most of the time) how much he/she might lose if the trade does not go his/her way. For us 'swingers', there's a slight risk that the market may gap up or down the day after we sell or buy and the risk is higher. And when you take higher risk, of course you're entittled to higher return.

But it was a very good and brave call from your side. The double bottom pattern on the hourly chart actually just finished forming on Thursday.

Good trading,

Hung

With regard to the increase risk hung its not true, i can trade the dow anytime day or night and my stop loss will be filled in the same way, the only time i am vulnarable to a gap is from 9pm friday to 9:30 pm sunday.

My only real increse in risk comes with the distance to my stop which you all know is 100 pts on the dow, buts thats just the way i trade others can have tighter stops if they wish.

In terms of risk per trade it works out at 5% which sounds high but i trade about once a week so compared to a 1% risk trading 2-3 times a day i am comfortable with it. As for the risk/reward ratio it stands at about 1:3 .

Those figures mean that as long as i dont get it wrong more then 50% of the time I'm gonna have some great returns. This month was tough cause i got out of my short too soon and my dabbling in the ftse burnt my fingers. the dow though has done wonders to my account trading this way. :cheesy:

 

[hungvir]

I am glad to hear your upbeat story. Thanks for sharing it.

With regards to stop loss, I assume you use guaranteed stop loss then?

Good luck with the rest of the trade!

H

 

[hungvir]

Hi Hung,



...



Don't rub it in! Actually, I was warning you about the main trend that started from April. I'm not sure that it is over, yet.. You have been spotting the turn better than me, no doubt about that.

Split

Sorry, Split

And I do hope we'll see the price level of 2-3 weeks ago soon. But I don't bet on it to go much further than that.

H

 

[Vaco]

Hung no its not guaranteed, cmc just trade it even if it is triggered out of hours

I used to get caught out all the time out of hours when my stops were very tight cause the dow easily moves 20+pts between 8 am and 2pm before opening at 2:30.

The out of hours charts give you a great insight into what the dow will do in the first hour of trading and if i was day trading they would definatly play a part in my strategy.

I've attached a 15min 2 day chart below notice how the dow moves up before the open then comes back down for 2:30 before moving up to the out of hours high, this is a reguler occourence.

 

[Splitlink]

Split and Jon,

Staying out of it altogether when in doubt is very wise. My record loss of 200 points plus on XTA was because I put on a trade when I was not sure which way the market would go. And I still went long after a lower low was made. Big mistake.

I now listen to the market very carefully. If a lower low is made, I either stay out of wait for a pull back to short (not long . I am not sure if you use the same strategy, Split but if I go short I would wait for a pull back and open a short trade when the previous low was breached. My stop loss distance is a whole bar but then the market shows its weakness more clearly. I I try to short it at the top, the risk of it going higher is very high.

Later,

Hung

Thanks, Hung,

I'll try your entry method. It means a larger risk but my stops could be too close.

Split

 

[hungvir]

Hung no its not guaranteed, cmc just trade it even if it is triggered out of hours

I used to get caught out all the time out of hours when my stops were very tight cause the dow easily moves 20+pts between 8 am and 2pm before opening at 2:30.

The out of hours charts give you a great insight into what the dow will do in the first hour of trading and if i was day trading they would definatly play a part in my strategy.

I've attached a 15min 2 day chart below notice how the dow moves up before the open then comes back down for 2:30 before moving up to the out of hours high, this is a reguler occourence.

The chart looks nice. Thanks!

I've stopped trading with CMC simply because they don't take market price. But you've been doing alright with their quotes so may be it was just me.

H

 

[hungvir]

Thanks, Hung,

I'll try your entry method. It means a larger risk but my stops could be too close.

Split

You're welcome, Split.

Let's hope (oh dear, hope again ) that larger risk would bring larger return or at least increase the odds of it

Enjoy the rest of your weekend there!

Hung

 

[Vaco]

The chart looks nice. Thanks!

I've stopped trading with CMC simply because they don't take market price.H

This is something to do with what the quotes are based on, the dow cash or dow futures.

I could be wrong as its a little unclear to me but i think that some charts like use the dow cash for the price and others use the futures,

cmc use the futures prices.

Maybe a wiser member will come along and explain it for us

 

[barjon]

I'm not entirely certain of my ground here (and I'm certainly not wiser ) but, as I understand it, all the sb companies derive their cash quotes from the futures via some sort of algorithm. This, in part, causes the apparent "bias" that you see sometimes when their quote differs quite sharply from the actual index value.

I suppose they work from the futures since those futures are their only route if they need to hedge - but that's just guessing.

good trading

jon

 

[hungvir]

They should have explained their pricing policy more clearly IMO, especially to newbies.

I always base my stops on market price and was stopped out a few times with CMC and Worldspreads when I went along with their quotes. But as Fins takes market price, my problem is sorted. I don't need to know how they arrive at their quotes because my orders will only be filled when the market get there not when their quotes get there.

Cheers,

Hung

 

[hungvir]

Placed a stop order to sell Rex at 486, stop loss at 499.

 

[Splitlink]

They should have explained their pricing policy more clearly IMO, especially to newbies.

I always base my stops on market price and was stopped out a few times with CMC and Worldspreads when I went along with their quotes. But as Fins takes market price, my problem is sorted. I don't need to know how they arrive at their quotes because my orders will only be filled when the market get there not when their quotes get there.

Cheers,

Hung

This is interesting, because I am undecided about it. I have been pleasantly surprised, more than once, when I have got home, to discover that I am still in a trade that bounced when the price had pierced, by several points, the market price.. On a market stop, they have to trigger, no matter what. I am not saying that they are doing this to be nice, it is to their benefit, but I benefited as well. It doesn't always happen, either!

Split

 

[hungvir]

Hi Split,

I am a bit confused here . Does it mean that you always go with their quotes?

As I use market price, when it's triggered then I'll definitely be out. It's just a matter of time for Fins to locate the triggered order and sort it out.

I would be very suprised if they don't do the same with 'their quotes' trigger. I assume it's an automatic and computerised process so it's the kind of ''the computer says yes/no'' sort of thing

I don't think I'll have much time to look at the market this week. At the moment I have two hours worth of tape to be listened to and translate from Vietnamese into English and about four hours of interviews to edit But it looks like I'll make about a thousand from the translation job so it will be worth it. More money to fund my market bullet rillded account

Good trading,

Hung