Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

JLJ

Glum Swing Trader - Was Doing Great Until a Couple Weeks Ago

Recommended Posts

:( I was actually making money swing/momentum trading - tho admittedly the market was very good in Sept which helped a lot. I was gaining much more than I was losing. I buy smallish lots (200 shares sometimes 300) and hold for anywhere from a day or two to a week or so. I always have a stop loss in place. Always.

The past couple weeks, I've lost most of my gains of the past few months. My account is currently not much above where I started.

I know that the whole market has been down - the international backlash against QE2, China's inflation problems, and now Ireland - but I don't know what I should do differently. Problem is, my stops (I allow for pretty good wiggle room - I usually set the stop about 8% below the purchase price) have been repeatedly hit, generating losses. (Sadly, after my stop is hit the price usually goes right back up.)

Of course _when_ I buy is important - I look at stocastics to see when prices are likely at the peak or bottom so I can avoid buying just before the price starts to drop. That method used to work, maybe 70% of the time, but with everything down it's not working, except in hindsight. None of the stocks I've bought in the past week or so were much in the green ever, because everything started dropping, so when my stop is hit I lose, and that's happened several times lately.

As soon as it became clear a couple days ago that we were heading for a 'correction,' I started selling what I had left and moving into cash so I'm less exposed.

I'm OK so long as I can identify my mistakes and not keep making the same ones, but I just don't know what I should do differently in the future. Short of buying a crystal ball.

Thanks for any input.

Share this post


Link to post
Share on other sites

One little dirty secret of trading is that almost everything works in the direction of the trend. So your challenge is the learn to identify the trend and trend change that matches the time frame you trade. For swing trades, find and objective way to spot trend changes on the weekly chart or daily chart. You can start by looking at the reversal bar on the weekly chart last week.

Share this post


Link to post
Share on other sites
None of the stocks I've bought in the past week or so were much in the green ever,

 

Often this is an early warning sign to cut a position...... you dont need to wait until your stop is hit.

I have often waited around too long for something to happen when clearly the trade is not doing what I anticipated it to do......

Share this post


Link to post
Share on other sites

Hindsight and backtesting your "edge" are fine as the other posters above mentioned. The real issue is understanding overall market structure and changing with it. You are buying or selling based on lagging indicators which can stay overbought/oversold for longer than you can stay solvent. As one of the other posters mentioned you must be quicker to admit you are wrong. When a position your are in is not acting correctly based on the premise you used to enter the trade, a full stop out is not only not necessary but it is psychologically damaging to a trader. You don't have to be in the market all the time. Patience and discipline and better understanding of trend and change of trend will really help. Experienced traders were not trying to buy and hold long positions near the S & P 1220 level.

Share this post


Link to post
Share on other sites

I wouldn't use mental stops if I were you. You may use them in conjunction with hard stops, but keep your hard stops in place. You will get crushed and go broke if you get rid of your hard stops.

 

Also, if you've lost all of your gains from the past couple of months during this small downturn then you need to reevaluate your system and in particular your money management. You never mentioned what your profit targets are, just your stop loss at 8%. Are you losing far more on losers than you make on winners?

 

Do you short? You may want to have one of your positions be a short when the market starts looking toppy.

 

Just make sure you make up for your recent losses over the next several weeks when the S&P 500 goes back over 1225.

 

Good luck and keep learning. It's not easy.

Share this post


Link to post
Share on other sites

Dear JLJ,

You are going to have to start all over again

And using stocastics without price action is a losing method.

The market will stay oversold / overbought longer than you will stay solvent.

Look on this site for threads on price action. There is some excellent info.

Be careful of Brooks. Thats scalping. And his book takes a while to grasp.

But dont dispair. It takes a while and a bit of cash.

And I think a 8% stoploss is too big -Look at the average move per time period over 20 time periods.

This will determine your stop, maximum 3%. If a share moves on average 8% a day (time period), dont trade it. Find something less volotile.

Do you understand how the market works?The Institutions drive the market .The analysis will determine the EXPECTED FUTURE EARNINGS of a share.An order will be placed for 1 million shares at lets say $50 with a maximum of $55. The market moves up . At $55 the big buyer steps back and waits for a pullback.At $50 he starts buying again unless he has filled his order. Thats why you wait for him and trade on his momentum.

Wait for a pullback.

You also need to know the consensus view of future earnings so you have a rough idea of where the share is heading. So you combine fundamental analysis with a chart.

And finally trading is a full time job.You need 10000 hours to become proficient. Thats 8 hours a day for 5years!!!

The biggest problem with this advise is its too brief, so go and read Soultrader where there is 1000 pages of info.

Been there, done that.

bobcollett

l

Share this post


Link to post
Share on other sites

Some great advice here so I would say yes to all of the above. A few other thoughts came to my mind.

 

One, as mentioned before it sounds like this trader is all "directional" to the buy side. That's tough unless you are averse/against shorting -- if you are, you need something that tells you to stay on the sidelines during those downswing periods. There's going to be plenty of those and you sound like you're just forcing the action and the momentum simply isn't there.

 

Think of all the genius traders that were floating around in 1998 - 2000 - when the markets did nothing but go up and even if you had a down day the next day your stock would go up $30 further reinforcing trader genius disease that was going around. And then the crash hit and it never came back. We all know what happened next.

 

I think it's tough with a long only bias to succeed.

 

In addition, what I've found in my system development which includes tens of thousands of trade observations is it's amazing how often a system/approach you've developed feels just so good and like the holy grail. Then all of a sudden something changes and it completely collapses. You can't even imagine how often I have thought I have developed a breakthrough for myself and it seems incredible for a sustained period then simply breaks down miserably and goes in the trash heap.

 

You really have to develop your strategy to take into account many different market conditions or it's doomed to fail in time.

 

MMS

Share this post


Link to post
Share on other sites

yes....what they said on the last two posts expounding on my comments. Excellent advice folks....10000 hours is absolutely correct. Learning to trade is a full time job.

Share this post


Link to post
Share on other sites

Bobcollett talked about a 20 day average true range. Check out the work that Charles LeBeau has done on chandelier exits using an exponential ATR. That sets your stop loss based on the volatility of the stock you are purchasing.

 

In addition, you might want to watch different time frames to see what the overall movement is, and be watching some market averages to see when we are getting either a reversal, or into a trade range.

Share this post


Link to post
Share on other sites

Thanks everyone for the thoughtful replies. I do know about how institutional investors drive prices, the importance of expected earnings, etc. However I don't know what 'reversal bar' and 'price action' are. I need to find some really basic info on technical analysis - the info I've read assumes you're familiar with a lot of terms I don't understand, so it's above my head.

What I did was to buy based on fundamentals - using my primitive knowledge of stocastics to avoid buying when the price is peaking - then I'd ride it up for a while, then sell. It was working great until a few weeks ago when the market started going down.

I lost about two-thirds of my gains in the past few weeks. No, I didn't lose all my gains. I think I had good 'beginner's luck" - I benefited from a good market in September and October.

Interesting that I don't hear a lot of people here saying "you can't make money the way it's been the past 2 weeks" - does that mean you can, if know what you're doing? I'll admit that I don't :)

I don't have a problem with admitting I made a bad buy and should sell before the price drops further. In the beginning, if the price dropped much after I bought, I'd sell - and it cost me. I keep detailed records of all my trades and I spend a lot of time looking at what I did, when, and why, then I look at the charts and see what the price did _after_ I sold. What I saw was that almost every time I sold, the price would come up, often substantially, anywhere from minutes, to a day or two, after I'd sold. Once I realized I was selling too soon, I began to hang on and the price would go back up and I started to have good gains. ...Unfortunately, that also meant when the market started to fizzle a couple weeks ago, my stocks would go down - down - down then my stops were hit.

However, even then, most of the time when my stops were hit, the price only dipped a few cents, maybe 20 cents max, below my stop - then it came back up, often quite dramatically. (There was only one stock that continued to go down and stay down.) So if my stop had been 8.25% below what I'd paid (as opposed to 8% below) I would not have been stopped out and would have still been there when the price came back up. I think a closer stop would backfire. Obviously my position sizes should be smaller so I don't lose as much if the stop is hit. Or I could buy stocks that are less volatile, as one of you guys here suggested.

The thing is, I've often done well with volatile stocks because it would go up a couple bucks a share in one day, I'd sell, then when it would drop I'd buy it again. I've made great gains from buying and selling a small number of stocks, repeatedly. If they don't have pronounced price swings this isn't possible (in the short term, at least).

I'm willing to spend the time to learn. I appreciate folks here reminding me that it takes a long time to get good at this.

Share this post


Link to post
Share on other sites
I need to find some really basic info on technical analysis - the info I've read assumes you're familiar with a lot of terms I don't understand, so it's above my head.

What I did was to buy based on fundamentals - using my primitive knowledge of stocastics to avoid buying when the price is peaking - then I'd ride it up for a while, then sell. It was working great until a few weeks ago when the market started going down.

I lost about two-thirds of my gains in the past few weeks. No, I didn't lose all my gains. I think I had good 'beginner's luck" - I benefited from a good market in September and October.

.

As a suggestion: read Trading for a Living, and Come Into My Trading Room, both by Dr. Alexander Elder. I don't believe he focuses on stochastics, but he does focus on swing trading and I think both may be helpful.

 

Having a tighter stop will cause more losses, but smaller ones. Everything is a trade-off, but with good trades chosen, good position sizing, good stops, and knowing when to exit will hopefully prevent such a large loss of gains.

 

there is a lot to learn. Some of the best learning comes from making mistakes; but it also helps to know why the mistake was a mistake - or there is no learning at all. On the other hand, there is value in learning what has been a mistake for others; at least in can help prevent making unnecessary mistakes.

 

The market has had a number of hiccups since March, 2009, and doesn't seem to want to make a steady bull market out of the chaos. And scan of any number of stocks will show gains since then, but not without some dips here and there, for who knows what reason. Don't give up; I think if you read those two books (and you may want to read them numerous times, as they are loaded with information) and learn from this go-around, you will do well. Rome wasn't built & etc.

Share this post


Link to post
Share on other sites

Elder's multitimeframe approach is valuable. High for trend; Mid for setup; and trigger on some price action (you only need two timeframes here not 3).

 

(Moderator: Removed 3rd part URL)

 

Focus mainly on pins, buobs, ibs etc. But remember that price action without context (the higher trends say and the pullback point) is just another way of losing money. You need both.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Similar Content

    • By adamal7
      Hello guys,
      I'm starting to swing trade commodities, especially soft commodities (corn, sugar, coffee, cotton, soybean, ...). I'm also checking gold and oil.
      My problem is I'd like to know what is the best broker for trading those markets (regulated, large commodity choice) ? For CFD trading.
      I'm thinking of IC MARKETS who are very good with forex and have good trading conditions.
      The concern I have is that I need a broker that offers MT4 as a platform, and also I'd like to be able to open mini lots positions for a better risk management.
      As a swing trader, I'm less concerned by the spread but looking at the financing fees.
      Wish you have a nice day, and thanks in advance.
      Alexandre.
  • Topics

  • Posts

    • Date : 26th October 2021. Market Update – October 26 – Bonds and stocks rallied to start the week. USD (USDIndex 93.89) – first rate hike was pushed up to June, with two quarter point tightenings priced in for 2022. Wall Street firmed too on the back of strong earnings with more new record highs on the USA500 and the USA30. Also underpinning sentiment are expectations that the fiscal package will make it out of Congress. Fed Chair Powell warned that inflation could be higher and more persistent than previously expected. US Yields – 10yr backed up 0.9 bp overnight to 1.64%. Equities mixed – USA100 paced the advances though, climbing 0.9% amid support from the slip in yields – 4582. USA100 bounced to 15602. Facebook reported mixed third quarter earnings on Monday, slightly missing revenue estimates but continuing to grow its user base. FB +2%. TSLA (+12.6%) joins the$1 trillion market cap group after 11 yrs – took AMZN 22 yrs. It’s bigger than the combined value of the next 9 biggest car makers but it sells less than 1% of world car sales. Elon Mush added $36BN to his net wealth yesterday alone. UBS beats on revenue – but sales are mixed. USOil holds up again on supply concerns & trades close to 7-year highs at $82.50. Gold spiked at $1808. FX markets – EURUSD 1.1600, Cable bounced 1.3778, USDJPY – reversed from 113.97 highs to PP at 113.86. European Open The December 10-year Bund future is down -20 ticks at 168.45, underperforming versus US futures, although in cash markets the US 10-year rate is down from overnight highs, but still up 0.4 bp at 1.63%, as a 0.5% gain in the USA100 is leading US stock futures higher. GER30 and UK100 are posting gains of 0.2% and 0.1% at the moment, after a somewhat mixed session across Asia. Today – Upcoming central bank decisions will remain in focus, with ECB and BoJ set to announce their decisions on Thursday. Earnings: Microsoft, Alphabet, Visa, Eli Lilly, Novartis, Twitter, General electric, UBS, Robinhood. Today’s economic calendar will be of interest as well, and features October consumer confidence and September new home sales. Biggest FX Mover @ (06:30 GMT) NZDJPY (-0.28%) Reversed overnight gains from 81.88 high tp currently 81.50 area. Faster MAs, RSI & Stochastic turned lower, while in contrast MACD signal line & histogram keep rising, implying to a potential limited pullback. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HotForex Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Andria Pichidi Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Date : 25th October 2021. Market Update – October 25 – Big Earnings Week Ahead, USD Cooler. USD (USDIndex 93.50) cools a tad & again tests 4-wk low (93.44). PMIs biased to the upside as Powell talked taper but no rate rises yet, Democrats narrowed their differences on the $3.5b infra bill & Yellen talked new taxes. Yields hold up, Equities mixed Friday, FUTS down. Big week for Earnings – Oil up again on supply concerns, gold back to $1800. Evergrande – Restarted 10 building projects over weekend, announced move away from real estate towards EV production. US Yields (10yr closed higher at 1.665) & – now 1.6500% Equities mixed – USA500 -4.88 (-0.11%) at 4544 (NASDAQ –0.82%) – Big movers – SNAP -26.59% & INTEL -11.68%; Big Earnings misses, FB -5.05%, GOOGL & AMZN –3%, TSLA +1.75% – USA500.F back to 4540. Asian equities weaker. USOil up again on supply concerns & trades close to 7-year highs at $83.00 Gold very volatile Friday ($1782-$1813-$1793 on close) Back to pivot at $1800 now. FX markets – EURUSD 1.1650, Cable 1.3770, & USDJPY – (after a strong day on Friday (113.40 low) now at 113.60. Week Ahead Earnings from 5 x tech giants (FB today), plus major European Banks. Policy meetings from the ECB, BoJ & BOC, economic data includes US Q3 GDP & PCE. Plenty of CB speak, the UK Budget and month end too. European Open December 10-yr Bund future up 23 ticks at 168.51. DAX & FTSE 100 futures up 0.15% & 0.25% respectively. Inflation risks remained in focus as oil prices continue to climb higher while bottlenecks in supply chains lead to rising cost pressures. The combination already weighed on manufacturing PMIs last week & are likely to also depress the German Ifo confidence reading today ahead of Thursday’s ECB meeting. Fed Chair Powell signalled on Friday that inflation could stay higher for longer & that the taper is coming. ECB by contrast has pushed decisions on PEPP & APP back to the December meeting, which means this week’s ECB will be watched mainly for signals from Lagarde at the press conference. TToday – German IFO and BoE’s Tenreyro. Earnings: Michelin, Facebook, Restaurant Brands. HSBC surprises with 74% rise in Q3 profit and $2bln buyback. Biggest FX Mover @ (06:30 GMT) AUDJPY (+0.45%) Recovering from a strong day run fro JPY last week. Up from 84.50 tlow on Friday to test 85.00 now. Faster MAs aligned higher, MACD signal line & histogram rising, RSI 51 & neutral. H1 ATR 0.189, Daily ATR 0.817. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HotForex Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Stuart Cowell Head Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Date : 21st October 2021. Market Update – October 21 – Stocks & USD slip on big Earnings Day. USD (USDIndex 93.55) cools a tad and again tests 2-week low (93.47) Yields stronger again, Equities closed up, but FUTS are down (Nikkei -2% on stronger YEN and Yuan). Big day for Earnings – TESLA beat but revenue numbers disappointed some. Oil up on drawdown. Evergrande – Bad News $1.7bn sale of 51% of HK unit to Hopson OFF, $1.7bn sale of HK HQ OFF, $83.5m coupon default triggers tomorrow. Good News $260m bond coupon, extended by 3 mths US Yields (10yr closed higher at 1.63) & – now 1.6533% Equities moved ground higher USA500 +16 (+0.74%) at 4536 (NASDAQ –0.05%) – Big movers – Verizon +2.41% & ABBT +3.3% (PayPal – 4.91%) – USA500.F back to 4500. Asian equities weaker. New VIX contract at +1.49% at 19.60 USOil up on drawdown n strong demand at $82.00 after EIA inventories showed -400K vs build of 2.1m Gold holds at 4-day highs – $1785 FX markets – a recovering USD – EURUSD 1.1646, Cable down from 1.3830+ to 1.3800, & USDJPY – off 4-year highs and pivots at 114.00. European Open The December 10-year Bund future is down -16 ticks, US futures are also in the red. DAX and FTSE 100 futures are both down -0.45 and US futures are also in the red, with the NASDAQ underperforming again, after already closing slightly lower yesterday. Indices remain at high levels, but tapering concerns, the global energy rout and supply chain concerns are capping the outlook for global growth. Markets will continue to watch earnings reports and central bank comments, especially in the UK where officials clearly are laying the ground for an early lift off. Meanwhile the announcement of Weidmann’s departure has raised hopes that the ECB will push even more to circumvent the no-bailout clause permanently – after the end of PEPP, which already helped BTPs to outperform yesterday. Today – US Initial Jobless Claims, Philadelphia Fed Business Index, Existing Home Sales, EZ Consumer Confidence, EU Council Meeting, Fed’s Daly, Waller, RBA’s Lowe, Earnings: AT&T, Intel, American Airlines, Southwest Airlines, ABB, (bottleneck problems) Vivendi, Hermes, (beat) Pernod Ricard,(beat) Barclays, (Revenue big beat) Unilever (Sales miss). Biggest FX Mover @ (06:30 GMT) AUDJPY (-0.50%) Rejection of 86.25 this morning as Yen lifts after a very weak October. Faster MAs aligned lower, MACD signal line dips and & histogram slips significantly lower, RSI 40.00 off OS level, H1 ATR 0.189, Daily ATR 0.817. Always trade with strict risk management. Your capital is the single most important aspect of your trading business. Please note that times displayed based on local time zone and are from time of writing this report. Click HERE to access the full HotForex Economic calendar. Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! Click HERE to READ more Market news. Stuart Cowell Head Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Meet a maverick on Blockster   Blockster is a cryptocurrency social platform.   Blockster connects everyone within the blockchain industry into one place—all the cryptocurrencies, the teams behind the projects, as well as, the traders and investors. Communicate and network with the very core of the blockchain industry, and stay ahead of the market trends via Blockster.   Get insightful posts, reviews, breaking news, interesting comments, and latest updates from the world of cryptos, from Azeez Mustapha: https://blockster.com/AzeezMustapha46102 
    • Nice article send in here, do sharing other such articles and also share your experience of Forex Trading.
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.