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ALSI Trades


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#28561 Sunesis

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Posted 28 October 2013 - 04:52 PM

Even the Best Trading Strategy Won’t Save You

 

Trading strategies, systems and methods always look great on paper, but when it comes to trading in the real world, market chaos and human unpredictability often make even the best strategies seem inadequate to the task. The hard truth all traders eventually learn is that trading is far more difficult when your chips are down and the pressure is on, even if you have a very effective trading strategy.

Whilst the trading method you use is extremely important, it simply isn’t enough by itself. There are essentially three main components to successful trading: Mind, Money and Method, and if you don’t have all three pieces of the puzzle in proper working condition, you are going to be like a lost sheep, lacking long-term consistency in your trading.

 

mind-money-method.jpg

 

Note, whilst I have said that a concrete trading strategy alone is not enough, I am not trying to suggest that you don’t need a good strategy, because it’s obvious that we need an effective trading edge to get us into high-probability trades. However, IF that is all your looking for, you’re going to end up broke, poor, bankrupt and depressed, because the other two parts of successful trading, mind and money, are just as important as the method you trade with.

 

You need to think of trading as 3 things: Mind, Money and Method

Successful trading is an art and a skill and unless you are firing on all cylinders; mind, money and method, you aren’t going to make it. When we have our real money on the line, it fires up our emotion, and the more money you risk, the greater your emotional responses to the market will be. Therefore, the simplest and most effective way to keep your emotions in-check as you trade and to make sure the “Mind” component of successful trading is working properly, is to manage your risk intelligently and logically on EVERY TRADE you enter.

mind2.jpg

 

Managing your risk properly will go a long way to helping you achieve the proper trading mindset, because it will keep your attachment to trades at a low level and will help you ignore the feelings you have after losing or winning money in the market. However, this is not the only piece of the Mind puzzle unfortunately. Traders still tend to over-trade and over-analyze the market, even if they are managing their risk properly. Thus, if you really want to be sure that you have the Mind portion of the three M’s in proper working order, you need to only practice proper risk management, but you also need to have patience and discipline to follow your trading plan / strategy and not over-trade. You also need to know how to trade during market uncertainty and volatility and not become obsessed with economic news and over-analyzing the market.

 

Money management seems to be like the elephant in the room that all traders are aware of but few want to discuss or be honest about. After all, facing the fact that you should only risk R6 per pip because you only have a R 50 000 trading account is not really something that excites many traders. But, the reality is that if you don’t practice proper money management, you will never succeed as a trader, even if you have your Mind and Method in order.

 

Proper money management makes controlling your mindset and emotions significantly less difficult, in this way, money management is like the “glue” that holds everything together in your trading. If you don’t practice proper money management, your mindset is probably not going to be calm and consistent enough to make money even if you’ve mastered your trading method.

 

Beginning traders often understand the importance of money management, but due to greed and other emotional errors, they think they can get away with putting it off its implementation until some later date after they’ve made XYZ amount of money in the market, this day never comes. Whether you have a R10 000 account or a R1 000 000 account, if you do not manage your risk and money properly as you trade, you will never make money over the long-run, even if you’ve somehow managed to master your mindset and your method is solid

money.jpg

The trading method, strategy or system that you use to trade the market with is obviously important, but as I’ve stated above, it will not reward you in the way it is supposed to if you don’t have your Mind and Money in proper working order, so keep that in mind.

 

If you’ve been following my posts for a while, you know that I trade the trend. I’ve been a huge proponent of simplifying one’s trading strategy "buy the dip", simply because it makes sense and it works. If we were in a bear market, i would say sell the rally. Also, trading with a simple bare-bones trading method like buy the dip, has a very positive effect on Mind and Money.

method.jpg

Traders who trade strategies or systems that require them to have indicators and other such nonsense plastered all over their charts are also usually over-analyzing their trading and thinking too much. This obviously is a problem for the Mind aspect of your trading because it makes achieving a calm and collected mindset nearly impossible.The moment you start thinking while trading, you are usually f*cked. I call the market a b*tch, it's out to f*ck everyone. 

 

Focus on what works in the real world, not what looks good on paper or what sounds good

 

Viva La Bull :P  :P  :P  :P  :P 


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#28562 joker

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Posted 28 October 2013 - 04:30 PM

Made my 75 points aka 1500 bucks from the mini dip. Longs closed. 


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#28563 Olymphia

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Posted 28 October 2013 - 03:52 PM

If i can get 60-80 points it will be good. Just make sure you are there around 21h00-22h00 tonight. Just to see what effect Apple has on the market


Thanks S
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#28564 joker

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Posted 28 October 2013 - 03:42 PM

Interesting. 

 

Haha. If I get 80 points up I'm closing. It's resources with the biggest gains today. I'm sensing a bigger dip coming soon.


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#28565 Sunesis

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Posted 28 October 2013 - 03:33 PM

The question is how will Apples's results affect our ALSI and why would it have an effect. I'm curious. Sitting on 2 longs now. Bought the mini dip a few minutes ago.

The market moves by sentiment, If the is enough sentiment to bring the market down just because of a Apple earnings. Markets globally will come down as sentiment changes.

 

Just remember US buys goods and products from China. China buys resources from South Africa.

The world is interconnected.

 

It would be impossible for the US stock market to have a deep correction without the rest of the world following.

 

Just keep your longs


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#28566 Argento

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Posted 28 October 2013 - 03:33 PM

The question is how will Apples's results affect our ALSI and why would it have an effect. I'm curious. Sitting on 2 longs now. Bought the mini dip a few minutes ago.

Sit tight with your longs..come friday and your gonna smile! :D

 

A


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#28567 joker

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Posted 28 October 2013 - 03:24 PM

The question is how will Apples's results affect our ALSI and why would it have an effect. I'm curious. Sitting on 2 longs now. Bought the mini dip a few minutes ago.


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#28568 Sunesis

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Posted 28 October 2013 - 03:14 PM

S

Wats your target?

If i can get 60-80 points it will be good. Just make sure you are there around 21h00-22h00 tonight. Just to see what effect Apple has on the market


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#28569 Olymphia

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Posted 28 October 2013 - 03:10 PM

Those who play russian roulette buy this dip 40515


S

Wats your target?
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#28570 Sunesis

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Posted 28 October 2013 - 02:52 PM

Those who play russian roulette buy this dip 40515


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#28571 Sunesis

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Posted 28 October 2013 - 02:32 PM

S

 

Agap up r down?

 

O

It depends on the Apple numbers. Markets will find a season to sell if the numbers are bad. Shorts will be sqeezed if the numbers blow the lights out


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#28572 Olymphia

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Posted 28 October 2013 - 01:44 PM

S

 

Agap up r down?

 

O


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#28573 Sunesis

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Posted 28 October 2013 - 01:31 PM

US stock market will open at 14h30 today until 3 November

 

Apple will release earnings around 21h00, highlight of the day. Those who can't trade after hours might wake up with a gap.

 

Apple,Microsoft,Google,Oracle,Intel,Cisco,Amazon make up 50% weight on the Nasdaq.

 

Apple has the biggest weight and its rising before US open. Maybe signs of a bullish day.

 

Apple can pull the whole stock market, Apple is as good as Retail Sales, a good market indicator or consumer spending indicator.


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#28574 Lekkerry

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Posted 28 October 2013 - 01:21 PM

At this pace of limited market movement (intraday):

  • begin day: enter / exit trade
  • end day: exit / enter trade
  • begin day < in-between > end day: do something else, i.e. surf the web or snooze

 

It could not get more simple / boring / mundane / uneventful / calm <-- take your pick  -_-  


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From your perspective, Lekkerry is faceless and to a degree nameless, so any opinions expressed are just that, opinions from someone on the Internet  :D


#28575 Sunesis

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Posted 28 October 2013 - 01:02 PM

The unstoppable stock market machine: A bubble or a lack of technicals?

 

I was thinking to myself over the weekend about the situation in stocks. A huge part of trading is technical analysis and it’s general ability to become a self fulfilling prophecy. If everyone is trading off the same levels then it adds depth and definition to the market.

 

Take stock markets at all time highs, what if there is no tech?

 

How do all the tech heads trade against a trend or find levels to enter into the market, except in one direction only? With history, technicals provide points to trade both ways in a market but for stocks, they’re in uncharted territory so there’s nothing to the upside to lean against. Given the average trader’s often overwhelming mental reaction to try to pick tops and bottoms how do you trade against thin air.

 

Does the lack of upside technical resistance mean that traders are in fact only trading one way, i.e up, meaning that the the market becomes overly supported due to the lack of technical sellers, and that the only available technical analysis is for support level buying? Is this why we’re seeing the virtual straight line up in stocks rather than the QE trade?

Do these situations force religious technical traders to focus on fundamentals for two way direction?


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#28576 Argento

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Posted 28 October 2013 - 12:41 PM

 

Something interesting to note...and maybe some has already picked it up and others not!
 
US holidays..sometimes the prevailing trend runs until then and turns on that day...we have one coming up on Monday the 11th November, so that friday before should mark an important low on the ALSI. So taking in account the 04th November being a possible high (with another down leg next week), as the market should rally into the 1st as per pattern and November being bullish (against seasonal trend though but looking at the charts..)
 
TA very important in this game and market patterns repeats itself due to human nature and plays a big part.
 
Just keep it in the back of your mind..changes are good it won't play out...or it just might and means lekke kudo's! :rolleyes:
 
A


Reasons to hold that long for the week:

Charts (Bullish triangle/flag breakout)
FOMC Meeting Wednesday (Bullish week)
Seasonal trend is up

Medium term I strongly believe we have started a top pattern so November should be very volatile with big moves up and down (new highs)..US also getting stretched but need to form a top pattern first (2-3 weeks) before a good correction..!

A

Edited by Argento, 28 October 2013 - 12:41 PM.

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#28577 Scotsman

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Posted 28 October 2013 - 12:28 PM

Thanks for the advice Sunesis. I will concentrate my efforts on those points to get to understand the market better. At the moment I am shooting in the dark. Just as I think I understand what I am doing, I enter a losing trade. I entries are a real issue right now!


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#28578 Sunesis

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Posted 28 October 2013 - 11:54 AM

Hey S, thanks for your posts. I have been hovering around and reading what you all have been doing the past couple of weeks. I am still learning and find everything posted very interesting.

I see that you punt buying the dips often, and it seems to be working for you pretty well. I also read somewhere that you use a stop of 500 points with your trades. My question is really how do you know how far a "dip" will go, before you buy, and what is your trigger to buy at a certain point of a dip?

Thanks for the posts, very informative and interesting how you all see the market.

The best place to buy a dip is by the demand area, support zones example S1 S2 S3.

But if you miss the support zones, you have to start playing russian rollette with the market and buy on any tiny dip you can get.

1st is to look at the sentiment for the day. If BAT,SAB,NASPERS,RICHEMONT,BHP,ANGLO, MTN,STANDARD BANK,FIRSTRAND are up in the morning. It usually means the day will be bullish.

 

Also have a look at the market sentiment in Asia around 3am. If Tencent and some Chinese Banks are bid, that's usually a good sign to buy dips on open.

Our ALSI moves with Asian sentiment. If Asia is bad, trust me stocks like richemnont,sab,naspers,bhp won't go anywhere.

 

Overall is to teach yourself every tradable intrument, like gold,oil,forex and bonds.

 

Right now i have a long position on oil,gold,AUD/USD, NZD/JPY, GBP/JPY,ALSI,NASDAQ,Euro50

 

Once you get a feel of all these markets, you will find it easy to trade because they are all correlated. That's how Paul Tudor Jones traded


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#28579 Sunesis

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Posted 28 October 2013 - 11:31 AM

Reminder to indice traders. Since 1995, S&P 500 rose 16 times from Oct 28 to Nov 6 vs just 2 dips


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#28580 Scotsman

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Posted 28 October 2013 - 11:29 AM

Bought the dip 40572

Hey S, thanks for your posts. I have been hovering around and reading what you all have been doing the past couple of weeks. I am still learning and find everything posted very interesting.

I see that you punt buying the dips often, and it seems to be working for you pretty well. I also read somewhere that you use a stop of 500 points with your trades. My question is really how do you know how far a "dip" will go, before you buy, and what is your trigger to buy at a certain point of a dip?

Thanks for the posts, very informative and interesting how you all see the market.


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