Dynamic Risk to Reward

[Dynamic Risk to Reward]

I have always though RR varies with each tick though seems surprisingly little material on the subject.

 

Yes. There is surprisingly little material on dynamic risk to reward. Actually I have not read any except one poster mentioned it in another forum.

[Trader P/L 2009]

Thales, the end of the day, traders are predators. The food that is on the table is not vegetarian. You make it sound like we are living in a fairy tale world where we can help eachother out, if only we can get in touch with our inner self. You don't seem to understand, or are suppressing the fact, that we are helping eachother in hurting eachother, starting with the weak. It is counterproductive to a trader's profession to share their trade secret with other traders. Unless the traders are part of a team that shares profit. In trading forums, people are not in a profit sharing team. They are, by the nature of the game, enemies. Though lots of them seem to share their knowledge, or some knowledge, because human nature is social.

[Trader P/L 2009]

Richard Dennis once said that he could publish his trading system in the Wall Street Journal, and it would not attract enough adherents who applied it properly and consistently enought to change its effectivenes.

 

I think he is absolutely correct.

 

 

 

There is not a winner for every loser.

 

For every winner there are many losers! And there are more than enough losers (witness Mightymouse and his many daytrading friends) to fund the few who win consistently.

 

The only enemy you need to conquer is within your own soul.

 

I was helped by a few folks, and none of them have suffered for it.

 

I like to think that I have helped a few folks in turn as well. I have not suffered any ill as a consequence.

 

Best Wishes,

 

Thales

 

I admire your nice mentality, but I'm not convinced that traders are not enemies. The few folks who helped you might not have suffered from it. But then, someone suffered from your success.

[Trader P/L 2009]

Abe,

 

my conclusion on your question would be, that every post, not misleading others, would be one to much.

 

But somehow, why not just share something, just the the things you like;

this is a lonely business, and there is enough on the table to eat.

 

All my my life, I tried to be honest, and I will go on with this.

I post my opinion, not misleading, or I stay quiet (i.e. I don't lie!).

 

But, whenever I finally have success, I will be able to enjoy it,

helping poor people who never had a choice.

 

Or in other words, I try to stay clean, just going my way.

 

How should I say; greed is not my problem.

 

 

Regards,

 

Hal

 

 

P.S.: If anyone is misleading anyone, why do such forums exist?

 

Why are you still here? (I ask in peace, as food for thought.)

 

The answer to your question of why such forums exists, is because humans are social creatures. Other transactions between humans are for the most part not so one sided. You pay a carpenter for services, and chances are you both come out winners. In trading, one is the loser and one the winner. I think people come to these forums because by nature, there is a social, symbiotic side to humans, eventhough the trading profession does not appear to me to be symbiotic, except trades done between hedgers and traders.

[Trader P/L 2009]

You don't really believe that, do you?

 

The only person you have to beat as a trader is yourself.

 

If a trader helps other traders out on how to make money then there is too many people doing the same thing, and the method won't work anymore. For every winner there is a loser in the market, so helping other traders out is helping your enemy. That's the way I see it. I hope I'm wrong.

[Trader P/L 2009]

A side effect of posting here on this thread is,

that with time, we learn from each other,

and we try to help each other.

 

But as traders aren't we enemies? Why help eachother out and make our enemy stronger, when the point of trading is to win?

[Dynamic Risk to Reward]

Anyone use dynamic risk to reward, where let's say, you choose a 1:2 risk to rewards setup, but take your profit at 1:1, because at this point, technically, you are risking 2 to get 1, if you count your profit as risk.

 

Probably the best way I think is to take some profit at 1:1, and leave some runners perhaps. Or, move your stop to break even or near break even, though that really depends on your entry. Sometimes it might be best to just exit or tighten your stop closer to current price rather than move it to breakeven.

[Tradestation warning]

Thanks. Good to know. I did upgrade already, yesterday I think it was, whenever it first became available. Thankfully nothing happened. Does that mean I'm in the clear? Either way, I back up my computer often.

[Platforms That Support Paper Trading]

Tradestation is by far my favorite platform. And yes, they do have paper trading, but remember it will cost $100 a month if you don't meet the minimum trade requirements.

 

If you are looking for something more affordable, IB has papertrading account, though their charting is worthless. Why such a major broker has such poor charting is beyond my understanding. You will need a separate charting software for it. Ninja Trade is one you can use. Think or Swim also has paper trading, and if you are into futures you can check out Open E Cry, though last I remember they charge about $25 per month for paper trading if you don't have an real account I think. These are all the ones I can think of right now.

[Futures Vs. Forex]

No surprise this forum is filled with futures cheerleaders. Probably lots of those people earned a good living from those futures exchanges trading their other products, and like a GM or Chrystler employees they are very proud of their company and drive only American made cars when in fact everyone knows it is of lower quality. As for me, I must admit Forex is much better choice than futures. I opened a $300 account with Oanda earlier this years. Forex is especially good because you get to control the tick size like grains of sand. YOu can make each tick be very little money with a micro account, or alot of money with the huge leverage that you are offered. This is not so with Futures, which are more like rocks or bricks. In other words, each tick is like a big chunks. That may be ok with some, but for beginner traders who don't want to spend lots of money learning the market, it can be too much. Also, the grains of sand trait of Forex makes it easier to trader longer time frames, which will require smaller position size.

 

The beauty of Forex is that it goes both ways, it give you very high leverage too, so you can have the big chunks as well.

 

And Forex is more liquid. It is the most popular market, traded all over the world.

 

I'm not too concerned with the less regulation in Forex. Forex is becoming more regulated. And Oanada seems to be a trustworthy company and comes highly recommended by traders.

 

Here is info from Oanda site about it's reliability:

Why Trade Forex Online with OANDA? - OANDA FXTrade

 

OANDA has offered online currency exchange information since 1996 and forex trading services since 2001.

OANDA is registered with the U.S. Commodity Futures Trading Commission (CFTC) as a Futures Commission Merchant (FCM) and is a member of the National Futures Association (NFA # 0325821).

 

Financial regulations require OANDA to maintain capital reserves at specified levels. OANDA’s reserves exceed these levels many times over.

Our investors are industry and technology leaders confident in OANDA's technology and its use of that technology to redefine currency trading.

We manage risks with sophisticated hedging algorithms and strict hedging policies. Any net exposure above predefined thresholds is hedged with third-party banks at the current market spread. Hedging mechanisms are real-time, fully automated and always on.

OANDA is never exposed to customer losses.The FXTrade platform automatically closes positions with a margin call before a customer’s losses can exceed their balance. Customers will never owe us money (we guarantee it in our customer agreement).

OANDA is a trusted partner in the forex market, providing forex rates used by financial institutions and the big four accounting firms. Our FXTrade technology is a proven white label forex platform for financial institutions.

[Bond Futures, Not Sexy but Worth a Look!]

Barron's includes the Treasury announcements and auctions HERE.

 

 

Excellent. Thanks. I used to use the Econoday calendar, but Forex Factory has a very nice setup so I've been using it instead. I'm suprised Forex Factoy doesn't have that info, because the USD also dropped alot at that time.

[Bond Futures, Not Sexy but Worth a Look!]

Treasury sells 30-year bonds at 4.72%

 

MarketWatch.com Story

 

This caused a huge rally in the ZB today, and a rally happened at the same time in the indexes.

 

The ZB rallie looked very easy to trade if you were prepared for it. But Forex Factory calendar made no mention of the treasury sale. Where do I get the schedule for these Treasury sales?

[Bond Futures, Not Sexy but Worth a Look!]

Commissions is one part of the equation.

 

Taxes are a HUGE part of the equation as well. You can't beat futures taxation (currently).

 

Also, 1 tick on the ZB or ZB is $15.625.

 

Ok. What about electing MTM on the equities? Is it still better to stick with futures, with the lower commission of equities taken into account?

[Bond Futures, Not Sexy but Worth a Look!]

One of my faves to trade Abe.

 

If that is too jumpy, also look at the ZN or ZF.

 

Thanks. I'll check them out. Actually I traded the TLT etf today, which appeared to be following closely the ZN. ZN is too expensive per tick for me and where I'm at with my trading currently, but I like the way it moves. How much is commission with ZB, ZN, and ZF? You might get cheaper commission if you trade the TLT with Inteactive Brokers. Less than $2 round trip for 700 shares I think, which would equal one ZB contract, both will move about $7 per tick, but probably lower commission with the etf.

 

That's how I trade the YM actually, through DIA etf, and pay less than $2 commission round trip, and get to lower my risk per tick as well.

[Bond Futures, Not Sexy but Worth a Look!]

Thanks for the info Brownsfan. ZB looks great.

[Freestockcharts.com]

Hi Abe,

 

Have you heard anything concerning your problem?

 

Thank you,

 

Thales

 

Thanks for asking. No, I haven't heard anything from them. For a while the window stopped popping up, but then one day I signed off, and when I opened it up again later it started popping up again. So it might be related to signing off. I have it on automatic sign in, and since then I didn't sign off, just closed the browser when finished, but no luck until today, for some reason it is not popping up today.

[Freestockcharts.com]

Hi there Abe,

 

I have not experienced that in my use of the software. I went to the online help and could find nothing that would address why that window keeps opening for you.

 

I would suggest that you email your screenshot with your above comment to feedback@freestockcharts.com and see whatthey might suggest. Of course, with the holiday weekend, I wouldn't expect a response until Tuesday at the earliest.

 

Best Wishes,

 

Thales

 

Thanks Thales. I sent them an email with the screenshot 4 days ago but haven't received a reply.

[Freestockcharts.com]

Thanks. Thats a great free charting software. But the Change Symbol window keeps popping up right on top of the chart for no apparent reason. See attached. Is there a way to keep this from happening, or is it a bug?

[A Look at a Stock Trader's Day]

Since you already have the answers Abe, don't bother coming here looking for advice.

 

You OBVIOUSLY know the answer YOU want, yet you want to continue the banter here.

 

Either trade stocks or don't. The choice is yours.

 

This thread turned into a trainwreck real quick. I wonder if a mod can take Abe's 'discussion' and turn into it's own thread b/c we had a nice thread going here.

 

I was just correcting you Brownsfan, that's all. You said buy/sell a sector to hedge a stock, which I dissagree with. The whole point is you can't hedge a halted stock by buying the sector when it is halted on stock specific news, especially if it is not a heavily weighted stock. I Don't mean any disrespect to stock traders, or you. Not saying stocks suck, or stock traders are suckers. So, please do not take offense. Just correcting you, that's all. I didn't think you would take it personally.

 

Didn't you used to trade stocks, and have been a trader for quite some time? Frankly I'm surprised you would lack such basic knowledge about the stock market.

[A Look at a Stock Trader's Day]

Thanks Thales for the very detailed response. My apologies if I offended you in any way, and sorry for making false conclusions about your intentions.

[A Look at a Stock Trader's Day]

In your first sentence you say:

" YOu seriously believe I expect to know exactly how much a stock can trade against me when halted?"

and then you proceed to ask (even bold it):

"How much CAN a halted stock reopen against me?"

 

You are answering your first question yourself in bold. This is exactly what you are asking.

 

How about taking a moment to reflect about what you really are asking. And I mean, really think. I know you are itching right now to just bang out another insult on your keyboard and start with the name calling again, but take a moment and think about it. Just because you don't like an answer in a reply, doesn't mean it is stupid. If you pay more attention to what people are telling you and less effort to insult people, you actually might learn something.

 

I think trading stocks is obviously too risky for you and best to be avoided. Coming to think of it, some maniacs might fly a plane into a building again, closing the exchanges for several days, so futures trading is probably too risky as well. You might resort to FX trading but could end up with another Refco, so FX is out also. As you can see, there are just too many risks with trading, so it is probably best to burry your money in several locations in fire, water and rust proof containers and avoid trading at all cost. For that matter, crossing a street too. You never know when some driver will ignore the stop sign. And don't even get me started on shark attacks...

 

PS: Aren't you the guy who offered to provide some free psychological advice a while back in another thread? Maybe time to take yourself up on the offer and figure out what the real issue is...

 

Please, spare me your jokes. I don't need a whole paragraph of jokes and criticizm. I told you already, I'm not asking EXACTLY how much a stock will move against me. I just want to get an idea of how much CAN a stock move against me. And what is the likelyhood of that? What possible scenarios are there? If you don't believe that then there is nothing more to discuss. But please, don't waste my time and other readers' time by responding with jokes. When you don't know the answer it is best to be quiet and wait for someone with knowledge to be kind enough to respond. Believe it or not some people actually are reading the threads for information and don't want their time wasted with nonsense.

[A Look at a Stock Trader's Day]

Lol .......... ..........

 

no, you cannot hedge company specific news.

but you can hedge...

if you chose not to hedge,

or if you decided that nothing is good enough as a hedge,

then do like s said... don't trade,

which is what you have already stated anyway...

that's the decision you have made,

and that's the decision i have made too...

great!

we are all in agreement

 

I'd like to know how severly can a halted stock move against me when it reopens. And anyone with even half a brain should be wondering the same thing. Technically it can move 100% or more against you. That is not what I'm asking. I want to know, has anyone seen a halted stock reopen 5%, 10%, or 20%? What if you got a day trade on a stock, it gets halted, and reopens against you that much, that would be a huge loss if you only plan to lose .3% for example. And that is very scary thing about stocks so I'm trying to figure out how likely is that, and are there ways to protect against it.

[A Look at a Stock Trader's Day]

You seriously expect anyone to be able to tell you exactly how much a stock can trade against you when halted? Really?

 

BTW, this was not an ultimatum; Just common sense...

 

No. YOu seriously believe I expect to know exactly how much a stock can trade against me when halted? All I asked was CAN it reopen 5%, 10%, or 20% against me? That is what I, and anyone with common sense, which you obviusly lack, should know before they risk their money on day trading stocks.

 

Yet the only replies I got so far from you is, don't risk your money on stocks if you're not comfortable with the risk. I'm trying to figure out the risk. How much CAN a halted stock reopen against me?

 

It is in bold now to help. But obiously you are just a troll and don't know the answer, so don't waist peoples time with your stupid replies. And thales clearly either doesn't know is avoiding the question.

[A Look at a Stock Trader's Day]

The point is Abe is that you CAN hedge your position. Sevensa told you how - you can buy/short similar stocks or a market ETF or a market futures contract.

 

So let's say you are short RIMM and it halts. If you are panicked, you could go long the NQ, long a Nasdaq based ETF or a stock similar to RIMM. Is it perfect? Probably not but there are options to hedge the position.

 

Same thing if the CME goes down (which a few years ago was happening routinely it seemed) - you could hedge w/ an ETF, but it won't be perfect either.

 

Nonsense. One reason people trade ETFs is to protect against company specific bad news. So they buy the whole sector incase the specific stock has some bad news. If youre trading that stock and it gets halted, the ETF will not be a good hedge.

 

But with index futures they indexes follow eachother very closely. If one index is down you can either buy the etf, or a similar index. That's a much better hedge than buying the sector of a stock that got halted on stock specific news.

[A Look at a Stock Trader's Day]

Why can't you do the same thing with a stock? You can hedge it with another stock in the same industry, or with a ETF. Bottom line, trading has risks. If you are not comfortable with the risks, then don't do it.

 

You can't hedge a stock if the news that caused it to halt is stock specific. Then you are stuck with a day trading position on a halted stock, the stock reopens against your position, and you had no way to hedge against it. What if that stock reopens 5% against your day trading position that is designed to take less than 1% loss? Your stop loss will get filled at that 5% level because it gapped up against you, not at the .3% where you placed your stop loss. Could it reopen 10 or 20% or more against you?

 

That's why I asked thales if he knew how badly a halted stock can open against your position. Probably he doesn't know or is not saying for some reason. So yeah, ofcourse I'm not comfortable with trading stocks if I don't know this important information, which thales failed to answer, and you are not helping to answer, but instead giving me ultimatums that I should not trade stocks if I'm not comfortable with the risk. Well that's what I'm trying to find out. And I wonder why thales thanked your stupid ultimatum reply to me? Very fishy of thales.