Diary of a swing spread better

[Vaco]

The basis of trading in any time frame is so simple. Buy low and sell high. So why is it so difficult to get it right?

Perception is still the number one factor in trading successfully IMO. This is all in the mind not in the charts. I cannot change your perceptions for you, only you can do this. I sense my words are falling onto deaf ears which only serves to emphasise that the personal journey of a trader should in the main be kept personal.

Perceiving the market as a living breathing entity rather than a video game is a good perception for example. How you perceive yourself will be reflected onto how you see the charts. This is why I consider it pointless to say buy when line A crosses line B only on a Wednesday.
Good trading to all!

Personaly Rols i have come to the conclusion that it is not a 'great' strategy that is the secret to trading success it is good money management.

As for the perception you are right but very few traders (even successful ones) will trust their gut instinct/perception to make their trading decisions, this is where the strategy comes in people buy when line a crosses line b not because its the only way to make good trades but to stop them trying to trade every move.

With the right stop loss and profit target i could flip a coin to choose whether to buy or sell on each day and still end up with a similar percentage winners as your crossover example, but that would not leave me feeling very clever :|

Perception vs method

I think most traders need a method to control perception.

 

[Vaco]

Intraday trading on the Dow does that to you!. You know what I think of that but, since you made 23 points the day before you lost 22 you still have a point for a cup of coffee and Monday starts a new leaf.

Someone on another thread said that he traded a share that follows the Dow very well, without the volatility and he trades overnight. That could be a way to go.

I know one thing. since I have taken an interest in this thread I have shortened my timeframe
considerablely and I know that, for me, that is not good, which is why I have stepped back. Also, from the number of pages posted, more than I can possibly get through, I have the impression that you are all infecting each other with the excitement of opening and closing trades and that losses are explained away as lessons to be learned. Lessons that are ignored in the excitement of the next trade, if that trade is a win.

This thread is getting very feverish- take it easy. London trading overnight is a more restful pastime but no one does it anymore

Split

.

Spot on Splitlink,

This is evident this week in my trading as i was at home all week and by thursday i was day trading the dow when i normally hold for 2-3 days, on friday i made 3 round trips!!! and although it went my way if i did it every day without a plan i'm sure i'd be sorry.

 

[rols]

With the right stop loss and profit target i could flip a coin to choose whether to buy or sell on each day and still end up with a similar percentage winners as your crossover example, but that would not leave me feeling very clever :|

.

Your perception of my perceptions differ somewhat if you know what I mean. :cheesy:

Re. the above quote. Am I to deduce that you have discovered a Holy Grail? Who cares about feeling clever?

Please share then I can automate it to rake in the spondoolicks while I concentrate on the finer things of life such as reducing my golf handicap and doing sweet FA!

 

[Vaco]

Your perception of my perceptions differ somewhat if you know what I mean. :cheesy:

Re. the above quote. Am I to deduce that you have discovered a Holy Grail? Who cares about feeling clever?
Please share then I can automate it to rake in the spondoolicks while I concentrate on the finer things of life such as reducing my golf handicap and doing sweet FA!

No holy grail, all i am saying is that any strategy you u use whether you find it in a book, the internet or make it up yourself can give you a return as long as the money management and stop loss discipline is there,

as for the finer things in life change the timeframe you trade to eod and you can play golf till the cows come home.

 

[barjon]

Intraday trading on the Dow does that to you!. You know what I think of that but, since you made 23 points the day before you lost 22 you still have a point for a cup of coffee and Monday starts a new leaf.

Someone on another thread said that he traded a share that follows the Dow very well, without the volatility and he trades overnight. That could be a way to go.

I know one thing. since I have taken an interest in this thread I have shortened my timeframe
considerablely and I know that, for me, that is not good, which is why I have stepped back. Also, from the number of pages posted, more than I can possibly get through, I have the impression that you are all infecting each other with the excitement of opening and closing trades and that losses are explained away as lessons to be learned. Lessons that are ignored in the excitement of the next trade, if that trade is a win.

This thread is getting very feverish- take it easy. London trading overnight is a more restful pastime but no one does it anymore

Split

.

well said, split.

I suppose it depends why one is doing it. If it's for the thrill of the chase, then all well and good. If it's to build a substantial retirement pot, then I'd say "no chance".

As I've said before, I've spent over 30 years trying to prove that you can build more money playing the ups and downs than by straightforward buy and hold techniques - I have failed miserably but I've really enjoyed the journey .

Now I know that may say more about my abilities as a "trader" than anything else but I wouldn't mind betting that most of the worlds top traders who hit hot streaks and built a fortune have most of that fortune locked away in "buy and hold" type investment with only a very small proportion of it used for continuing trading.

In fact the biggest "edge" to be found is the long term bullish bias in the market - it's been going up for 300 years - and for any young person looking to build a retirement pot that's the "edge" to look for. All imo, of course :cheesy:

good trading

jon

 

[Vaco]

A good point Barjon,

The best way to build a fortune is to save your money in cash then buy every 10 years or so when the market is near rock bottom, although when the time comes its a little tricky to guess where the bottom is.

But lets face it most traders dont do it for a retirement pot or for the thrill of it they do it cause they want to get rich quick, the thrill comes when you feel like your on your way.

 

[Splitlink]

Whatever trading is compared with, I don't think it is the same as tossing a coin. Tossing a coin is heads or tails. There is no variation, only on the size of the bet. The only happy thought is that it is over as soon as the coin hits the ground- plenty of time afterwards to get in a game of golf. , in fact, you could train the missis do do it while you are on the 11th.

On opening a trade, one is never sure of the profits but one should be able to limit the loss. There is a recent article on probabilities on this site. The author states that it is the only thing that we can control. Increasing the law of probabilityi of winning to better than 50:50 is where we should be concentrating our minds. Limiting the loss should be fairly easy. Why do we fail? I am no better than anyone else. I mentioned , only last week, that I lost 12 points when it should have been no more than 7. That is like giving the market a tip for me losing!

Split

 

[hungvir]

I enjoy your disco there. Just had a walk around central London and am having a rest before going to Hyde Park. What a beautiful day and there're lots of beautiful things/cuties out there.

With regards to trading, I am happy that I am still its master and it's still my servant I hope this will continue.

Have a great day where ever you are!

Hung

 

[Vaco]

Whatever trading is compared with, I don't think it is the same as tossing a coin. Tossing a coin is heads or tails. There is no variation, only on the size of the bet. The only happy thought is that it is over as soon as the coin hits the ground- plenty of time afterwards to get in a game of golf. , in fact, you could train the missis do do it while you are on the 11th.

Split

Ok, so maybe comaparing it to flipping a coin is a little over the top and i do seem to be coming under heavy fire for saying it, but if winning trading strategies were so hard to come by they would be closely guarded secrets however theres enough half decent profit making free systems on this site alone to show that its all about the end user not the system. I may be completely missing Rols point here but i believe he is saying to focus on price action and how you interpret what the crowd will do next in order to profit from it, indicaters strategies and rigid rules are not needed if you can read the tape, just buy low sell high.

I still believe that strategies are the to help us prevent loses, How many times have you read posts 'i made a loss cause i didnt stick to the plan, i was too eager or i couldnt kill the trade'

I'm rambling on now, which is what happens when i try to explain something i probably dont understand

Bottom line None of it matters just make your money and live happily ever after whatever methods you wish to employ in your trading life.

 

[Splitlink]

Ok, so maybe comaparing it to flipping a coin is a little over the top and i do seem to be coming under heavy fire for saying it, but if winning trading strategies were so hard to come by they would be closely guarded secrets however theres enough half decent profit making free systems on this site alone to show that its all about the end user not the system. I may be completely missing Rols point here but i believe he is saying to focus on price action and how you interpret what the crowd will do next in order to profit from it, indicaters strategies and rigid rules are not needed if you can read the tape, just buy low sell high.

I still believe that strategies are the to help us prevent loses, How many times have you read posts 'i made a loss cause i didnt stick to the plan, i was too eager or i couldnt kill the trade'

I'm rambling on now, which is what happens when i try to explain something i probably dont understand

Bottom line None of it matters just make your money and live happily ever after whatever methods you wish to employ in your trading life.

Hi Elefteros,

Rols will have his method of trading, as do all of us. As you say, the bottom line is making the money. You, also, made a good point on money management. My post on coin tossing was just a mild protest in defence of my trading abilities

Split

 

[rols]

Hi Elefteros,

Rols will have his method of trading, as do all of us. As you say, the bottom line is making the money. You, also, made a good point on money management. My post on coin tossing was just a mild protest in defence of my trading abilities

Split

The main purpose of the boards I hope is to stimulate debate and give each other a helping hand. My original reason for entering into your forum was because it seems to have recently shifted from a swing trading equities into a day trading the DJIA. As this is something I feel I have some experience with plus the fact Hung was about to embark on his 8th losing trade I felt the urge to contribute and I apologise if in doing so I am ruffling any feathers - not the intention I can assure you!

Anyway that's all over and done with now and let's look forward to another weeks good trading.

All the best to all you SBs and may you prosper!

rols

 

[chindl]

Increasing the law of probabilityi of winning to better than 50:50 is where we should be concentrating our minds.Split

Let us all remember, we are not playing a 50-50 game. When you enter a 50-50 game it starts even, 0-0, when we enter a trade we are already losing and have to come from behind. As a Blackburn fan, this is something I have got used to as my life has been conditioned that way for a number of years, especially my earlier years!!!!!!

 

[Splitlink]

The main purpose of the boards I hope is to stimulate debate and give each other a helping hand. My original reason for entering into your forum was because it seems to have recently shifted from a swing trading equities into a day trading the DJIA. As this is something I feel I have some experience with plus the fact Hung was about to embark on his 8th losing trade I felt the urge to contribute and I apologise if in doing so I am ruffling any feathers - not the intention I can assure you!

Anyway that's all over and done with now and let's look forward to another weeks good trading.

All the best to all you SBs and may you prosper!

rols

You are not ruffling feathers. On the contrary, I think you'd better stay around! I hadn't been counting Hung's losing trades- too many pages!

Regards Split

 

[Vaco]

Rols your contribution is more then welcome,

I dont mean to come accross as ruffled but hey i'm greek so the word debate always comes with the word heated attached to it :cheesy:

 

[Vaco]

Hi Elefteros,

Rols will have his method of trading, as do all of us. As you say, the bottom line is making the money. You, also, made a good point on money management. My post on coin tossing was just a mild protest in defence of my trading abilities
Split

As i said we like to feel clever as well as make money

 

[hungvir]

Hello trading gurus and guru-to-be

Thank you all for your comments, especially when you spent your weekend time posting them!

Thanks to these boards, I feel less lonely as a 'trader' and with this diary being viewed more than 35,000 times I bet that many other would have felt the same. I am very curious to know if and how our 1900 posts plus here have changed other traders' rules of engagement and bottome line.

I'll spend my next post talking about what I think it'll take for a trade to stand much better chance of success. I'll of course incorporate many things that I learnt from you here and would welcome any comments.

 

[hungvir]

There're three things that matter the most for a trade. That's my 3E - Efficient money management, Entry and Exit in that order of importance and they happen to be in that order alphabetically as well.

The size of our bet is the most important thing. If we have £2000 and decide to risk 1900 shorting the DOW, we may end up making £19000 if the DOW indeed moves down 10 points. What about if it moves up 10 point. This is an extreme scenario but it shows the importance of capital preservation as we never know if our next trade will be a losing or a winning one.

Another important point in favour of putting money management before anything else is we can stay calm and composed if the trade does not go our way immediately. If we're risking too much, the emotion involed will also likely to be too much and this is a terrible start of a trade.

With Entry, we must make sure that we get in when there're enough evidence to support the direction that we think the market's going. For me it's the slope of the EMA, new highs/lows, RSI's status and other time frames' conditions plus pivot points.

For Exit, I favour trailing stops and let the market take me out instead of jumping out because of fear of seeing profit evaporating before our eyes. For daytrading the DOW, I tend to move my SL to BE as soon as It has moves five points in my favour. If I am stopped out, I may consider getting back in again if all conditions are still satisfied but it's important to limit my losing trades. They have a way of affecting my confidence that I don't like. After that first stop adjustment, I'll trail it along new lows/highs and watch RSI and BB. It's rare for prices to stay at RSI extreme reading or outside BB for long and stops need to be tightened when we see these. I may even consider taking profit with a hope to get back in at a cheaper price later on when I see these extremes.

With regards to the DOW, there're lots of traps around. I assume there must be people hunting for stops, tricking traders to get in for them to get out at better price,... I touched upon this in my other posts.

And last but not least is PATIENCE. In this day and age, not many can afford to have it. This is more difficult when we trade the fast moving DOW from our computer screen on our own. I think it would be much better if we can trade in pair. That way we can discuss, double check our reading of the market and if it is at the expense of missing a few trades in a fast moving market then be it.

That's a long post already. Let me know what you think. This trade is a lonely and boring one without you guys.

Enjoy the rest of a beautiful day and good luck to our chaps in Stuttgart. I don't mean our holligans.

Hung

 

[hungvir]

You are not ruffling feathers. On the contrary, I think you'd better stay around! I hadn't been counting Hung's losing trades- too many pages!

Regards Split

I hadn't been counting them either, Split I wonder why Rols knew

Cheers,

H

 

[HarryHill]

Hi guys....I'm new to the site and would like to convey my thanks to all posters for their informed views which have helped me tremendously.I am currently trading the ftse and dow.The killer for me on the dow is the 4 point spread.......did I read somewhere about trading dow futures on a one point spread?

 

[hungvir]

Welcome to the board, Harry Hill!

The one point spread is offered by Worldspreads. But I myself find it more difficult to make money with them than with Finspreads which has four point spreads. The reason being they don't offer as many types of orders as Fins plus they have their own quotes that sometimes bear little resemblance to the market.

Hope this helps!

Good trading,

Hung