Best Thread US day traders thread.

[Mr. Charts]

I've never said it is easy to begin with either. With time and some experience, it gets easier.
For example, here's my first trade today - it lasted about 50 seconds.

Bought 40.45
Sold 40.99

If you are trading:

2000 shares = $1080 profit
or
1000 shares = $540 profit
or
100 shares for beginners = $54 profit

Return on capital employed for 50 seconds 1.33%
Risk 5 cents
Reward:risk 11:1

Whatever way you want to view it........

Price currently down to 40.00...........yes $40

Richard

 

[Anonymous]

Mr. Charts,

Sorry to interrupt, but

Bought 40.45
Sold 40.99
=0.54

If,
Risk 5 cents
Why
Reward:risk 11:1 ?

0.54 - 0.05 = 0.49
0.49 / 0.05 => 9.8 : 1
isn't it? (excluding commissions, fees etc.)

 

[boy]

Just over 18 mths ago.

 

[SOCRATES]

Mr. Charts,

Sorry to interrupt, but

Bought 40.45
Sold 40.99
=0.54

If,
Risk 5 cents
Why
Reward:risk 11:1 ?

0.54 - 0.05 = 0.49
0.49 / 0.05 => 9.8 : 1
isn't it? (excluding commissions, fees etc.)

No, it is because the stoploss is 5 cents worth, therefore 54 divided by 5 = 11 approximately.
Therefore risk reward is inverted and magnified, thus 11 : 1 reward / risk ratio., which is the correct speculative viewpoint to adopt.

 

[SOCRATES]

I expect you don't mind me commenting on this as I know you are busy at the moment.

Experienced and successful traders are not frightened by risk. Risk is always present and is there to be confronted and effectively dealt with.

Inexperienced and / or unsuccessful traders view risk as dangerous.

Successful and experienced traders factor in risk and indeed welcome an element of it if it is judged to be controllable and manageable.

Hence the first group view the opportunity and act accordingly and therefore the measure is reward against risk.

The second group are not able to view anything in its correct context and hence view all of this as dangerous, and therefore for them the measure is risk against reward.

I respectfully, and helpfully submit the above explanation, as this has been the subject of endless discussion both on these boards and elsewhere.

I hope and expect that this clarifies the matter.

 

[Mr. Charts]

Welcome to this thread, Socrates. I look forward to your contributions. ;-)
Thanks for your penultimate explanatory post; it's saved me posting.
Richard

 

[Mr. Charts]

As to your last post, indeed, professionals embrace and control risk unemotionally.
Richard

 

[Naz]

Inexperienced and / or unsuccessful traders view risk as dangerous.

Successful and experienced traders factor in risk and indeed welcome an element of it if it is judged to be controllable and manageable.

Hence the first group view the opportunity and act accordingly and therefore the measure is reward against risk.

The second group are not able to view anything in its correct context and hence view all of this as dangerous.

Well put, but i would expect no less from someone as astute as yourself.

Naz

 

[Naz]

To make things even easier for US traders i'm beta testing a new scanner that will give intra day calls as they happen, to make things even easier for Nasdaq traders.

Each day i will select the most favourable stocks that are poised to move,then the scanner will give calls at the best intra day set ups.

Further in the future a trader will be able to click on the call and a brokers trading screen will appear to enable the trade to be taken.Looking even further in the future if the trader accepts the validity of the trade i expect the software will take and manage the position for him/her.But that will be a little way off yet.

Naz

 

[SOCRATES]

Naz, Mr Charts, thank you gentlemen, for your welcome and your comments.

May I say what a pleasure it is to deal with consummate professionals such as your goodselves, for a change, on these boards.

 

[Mr. Charts]

Thank you for your comments, Socrates.

I thought maybe anyone interested would like to see what the ARCA book looked like when I exited my post market trade in AMZN a few minutes ago.
It gave me a run of $1.98 per share, not as much as that $20 run in GOOG a few days ago, but still a very nice move.
Richard

 

[Mr. Charts]

Here is the second trade I did in JCOM earlier this afternoon.
This was a gentle and relatively slow sort of move lasting 14 minutes.
Shorted on 5 minute candles as shown below.
It had tested its early high and been strongly rejected and micro-analysis confirmed lack of support and clear selling pressure.
Richard

 

[Mr. Charts]

And here is the exit.
The actual gain was 65c per share.
Looking only at the chart there would appear to be no reason to cover the short, but micro-analysis (level 2, buy and sell pressures, participant behaviour, time and sales) suggested the downwards move was coming to an end. In fact after that it just drifted around for the rest of the day.
Richard

 

[Mr. Charts]

If you look at the moves on the Nasdaq (and the Dow) today you'll find it was a narrow range day with very little movement. The point is that if you trade stocks rather than futures, indices etc., there are almost always good trending and bouncing opportunities to find in different intra day time frames - whether it's a minute, ten minutes or an hour or two even on a "go nowhere" day. That and the relative transparency of the market is why I prefer this type of trading. Of course, everyone has to find the style which suits them personally.
Richard

 

[a320]

For someone who trades futures , this thread is a pleasure to read through, for the "equity" side of things

 

[Mr. Charts]

Good, I'm glad you find it interesting, a320.
I do feel very strongly that with thousands of shares to choose from there are proportionately so many more opportunities than with futures, FX etc., but hey, that's just my opinion.
If you go to Vegas for the seminar you mentioned elsewhere, do consider staying at the Mandalay Bay.
It's very luxurious with gold and marble bathrooms, great views over the Strip, its own beach and pools etc. My favourite hotel in the world.
Richard

 

[a320]

Between you and me I think its going to be held at that Very place....

I totally agree, I love the Mandalay bay & also the Four seasons on top... Anyway I don't want to spoil ths thread with my fav hotels

Pleasure as always Richard..

CJ

 

[Mr. Charts]

Aha! Excellent.
Enjoy.
Richard

Mmm. .....I'll be in NYC and Boston in October, maybe we'll pop over to Vegas for a few days as well for a little warmth.

 

[Anonymous]

Socrates,

True. Thanks.

 

[seguna]

Trade Examples

Thank you for your comments, Socrates.

I thought maybe anyone interested would like to see what the ARCA book looked like when I exited my post market trade in AMZN a few minutes ago.
It gave me a run of $1.98 per share, not as much as that $20 run in GOOG a few days ago, but still a very nice move.
Richard

Mr C

Thanks for sharing your trade ideas. They are certainly beneficial and educational. On looking closely at your AMZN screenshot, I noticed the spread was $1.52 yet you made $1.98. How does this work. Or more precisely, hiw did that work?!!?