35854 replies to this topic

[fabes]

Guys thanks again for the excellent advice. It's really appreciated. One tend to get caught up in big profits not realising that all the small profits eventually become big profits. The small profits make way for bigger trades as these can be used towards stop losses i think.

 

Chubby, I won't trade that divi tomorrow, unless the bulls run and we sitting at 38600 tomorrow which is not likely. Have heard to many times on the forum "the trend is your friend".

 

Tomorrow is another day. Enjoy guys.

[Trainee Trader]

spot on. Its all about risk mx. and then having the conviction to let your winners run and allowing your stops to close out your losing trades.

 

In the long run if you do this even a 50/50 success rate will result in a profit. Once you start getting up to 60-70% you're probably world class!

 

this might all seem simple but took me a long time to figure out...and then a longer time to actually have the discipline to adhere to the principle. And ask around here you'll probably hear that discipline in unemotionally accepting you are wrong about a trade is probably the hardest thing about trading!

Lol "The trade will turn soon" is the quickest way to wipe out your account hey Gams

 

I know this one all too well.

[gamma]

no of contracts is less important.

 

if your capital is 100k you should not risk more than 2k on a trade.

If you trade one R10 contract make sure your stop is not more than ~200 points from your entry (ignoring commissions)

 

you can increase the distance of your stop by trading less contracts but in this case you would need to go to a smaller contract (R2) since you can't trade a fraction of a R10 contract.

 

Thanks Gamma. I hear you. Gear your trading mindset towards risk management instead of profit. Successful risk management would result in less losses and more profits.

 

 

spot on. Its all about risk mx. and then having the conviction to let your winners run and allowing your stops to close out your losing trades.

 

In the long run if you do this even a 50/50 success rate will result in a profit. Once you start getting up to 60-70% you're probably world class!

 

this might all seem simple but took me a long time to figure out...and then a longer time to actually have the discipline to adhere to the principle. And ask around here you'll probably hear that discipline in unemotionally accepting you are wrong about a trade is probably the hardest thing about trading!

[Trainee Trader]

Hey Fabes, Trainee..

 

You could take a gamble tomorrow and try to play the Div...But it would be just that, a gamble. Rather do yourselves a favour and stick to your trading strategy but be mindful rather than focused on the Divi. In all likelihood you will just get yourself in a tight jam with no way out. Trade what the charts say and not what you think will materialize. Know where your stops are and stick to them like Gamma and Karl suggested. I have tried to play the divi payout 5 times and was only successful twice..The last time getting spectacularly blownup on a long play to collect  the divi only to see my 120 point divi being swallowed up by a 350 point drop.

 

Hi Chubby

 

I hear what you saying. If you LONG the divi then on EX-DIV because everyone wants to cash-in on it, then by the time you try to close your position to get the DIVI, the market would have dropped. Now if i'm SHORT from tomorrow before market closes, then I will have to pay the DIVI... will the drop be enough to cover it?

Thats the gamble..How do you know the market will drop? Lets assume you want to catch the short play on the divi and want to catch the drop . So you sit most of the day and watch the market rally..At 16:30 you decide that the market must start dropping so you go short hoping to catch the dip..but the market doesn't dip and carries on upward..So your short is now a loss and you collect the Divi and have to pay back and the market carries on its upward move after 17:00 and your loss is compounded further.

So now not only did you miss out on the positive move on the stock you also suffer a loss on your short and you pay back the Divi. 

 

This is the worst case scenario and one that has happened to me as well.

 

Things can get complex quite fast. So assuming tomorrow the market is bullish, so I go LONG. Come 16:30 I decide to cash in on the long movement, so I close my positions. Then come Monday morning I SHORT, so I can cash in on the expected price movement down. Is this a good way of trading this scenario?

[Trainee Trader]

Forgive the questions if they seem basic... same level as Fabes...

 

Oh and one more thing!

 

I don't want to be greedy, but I also don't want to cut myself out of potential profits. So based on my capital, how do I decide on a reasonable number of contracts to trade?

 

no of contracts is less important.

 

if your capital is 100k you should not risk more than 2k on a trade.

If you trade one R10 contract make sure your stop is not more than ~200 points from your entry (ignoring commissions)

 

you can increase the distance of your stop by trading less contracts but in this case you would need to go to a smaller contract (R2) since you can't trade a fraction of a R10 contract.

 

Thanks Gamma. I hear you. Gear your trading mindset towards risk management instead of profit. Successful risk management would result in less losses and more profits.

[gamma]

Forgive the questions if they seem basic... same level as Fabes...

 

Oh and one more thing!

 

I don't want to be greedy, but I also don't want to cut myself out of potential profits. So based on my capital, how do I decide on a reasonable number of contracts to trade?

 

no of contracts is less important.

 

if your capital is 100k you should not risk more than 2k on a trade.

If you trade one R10 contract make sure your stop is not more than ~200 points from your entry (ignoring commissions)

 

you can increase the distance of your stop by trading less contracts but in this case you would need to go to a smaller contract (R2) since you can't trade a fraction of a R10 contract.

[Trainee Trader]

Forgive the questions if they seem basic... same level as Fabes...

 

Oh and one more thing!

 

I don't want to be greedy, but I also don't want to cut myself out of potential profits. So based on my capital, how do I decide on a reasonable number of contracts to trade?

[Trainee Trader]

Hey Fabes, Trainee..

 

You could take a gamble tomorrow and try to play the Div...But it would be just that, a gamble. Rather do yourselves a favour and stick to your trading strategy but be mindful rather than focused on the Divi. In all likelihood you will just get yourself in a tight jam with no way out. Trade what the charts say and not what you think will materialize. Know where your stops are and stick to them like Gamma and Karl suggested. I have tried to play the divi payout 5 times and was only successful twice..The last time getting spectacularly blownup on a long play to collect  the divi only to see my 120 point divi being swallowed up by a 350 point drop.

 

Hi Chubby

 

I hear what you saying. If you LONG the divi then on EX-DIV because everyone wants to cash-in on it, then by the time you try to close your position to get the DIVI, the market would have dropped. Now if i'm SHORT from tomorrow before market closes, then I will have to pay the DIVI... will the drop be enough to cover it?

 

 

[gamma]

Yip. I'm atleast making some money(change), bur rather that then making a huge loss. Markets was way too volatile earlier and afterhours we tend to follow us, so i wasnt prepared to throw away money<br /><br />

 

Fabes, a volatile market is exactly what you want when day trading!

 

Nothing worse than trying to trade a market in the doldrums. Worse than watching paint dry!

 

Chubby is spot on. Forget what you know and trade the charts. 

 

Investing...a different story entirely

[fabes]

Yip. I'm atleast making some money(change), bur rather that then making a huge loss. Markets was way too volatile earlier and afterhours we tend to follow us, so i wasnt prepared to throw away money<br /><br />

[gamma]

Thanks for the wake-up call. i didn't open a large position. took 4 R2 contracts, but to risk an unnecessary loss is stupid. closed two anyway just to be safe.

 

BC i don't know how to hedge effectively, tried it, but failed miserably...

 

Don't stress if you don't know how to hedge...

But stress if you don't take Karl's advice! 

Control your risk before you enter the trade. And stick to your stops!

[fabes]

Right!

 

Rule number 1 of trading - never risk more that 2 (3% max) of your capital on any trade.

 

 

Fabes, are you perhaps opening positions which are a little bit too large for (your) comfort? When entering any trade you should decide upfront how much you can lose, and stick to a S/L! The ALSI is a volatile beast at the moment and swings can be violent in both directions. I went for smaller positions with a wider S/L and it has worked wonders.

 

 

Fabes you at IG.Maybe concider a long hedge to 38250, I think if we reach that the Yank traders will be of the good numbers high and start thinking o **** fed Qe is gonna be taken away hence the good figures o and the fight with Syria and we should go down again. This is what my feeling is but I am a absolute novice, Chubby Argento and those guys should give much better view!

Thanks for the wake-up call. i didn't open a large position. took 4 R2 contracts, but to risk an unnecessary loss is stupid. closed two anyway just to be safe.

 

BC i don't know how to hedge effectively, tried it, but failed miserably...

[Trainee Trader]

Historically, a significant number of shares in the TOP40, increase in price on LTD so that they can claim the DIV on EX-DIV.

 

I'm assuming that the TOP40 Index lends itself to the same trend.

 

However, given the current market conditions, do you guys think that it's a good idea to LONG TOP40 tomorrow? I know that chart analysis says that it will be going down tomorrow - but this week lots of trends have been broken?

[gamma]

Fabes, are you perhaps opening positions which are a little bit too large for (your) comfort? When entering any trade you should decide upfront how much you can lose, and stick to a S/L! The ALSI is a volatile beast at the moment and swings can be violent in both directions. I went for smaller positions with a wider S/L and it has worked wonders.

 

Right!

 

Rule number 1 of trading - never risk more that 2 (3% max) of your capital on any trade.

[K~~]

sorry for all these questions guys, but my pockets are very shallow, so I'm concerned at alot of movements.

 

afterhours we tend to follow the global markets from what i have seen. should i rather get out not wanting to risk my position or should i hold. i see we climbing again.

 

advice much appreciated.

 

Fabes, are you perhaps opening positions which are a little bit too large for (your) comfort? When entering any trade you should decide upfront how much you can lose, and stick to a S/L! The ALSI is a volatile beast at the moment and swings can be violent in both directions. I went for smaller positions with a wider S/L and it has worked wonders.

[bear catcher]

Fabes you at IG.Maybe concider a long hedge to 38250, I think if we reach that the Yank traders will be of the good numbers high and start thinking o **** fed Qe is gonna be taken away hence the good figures o and the fight with Syria and we should go down again. This is what my feeling is but I am a absolute novice, Chubby Argento and those guys should give much better view!

[Lekkerry]

This is feeling, not an observation, but going for the divi is on the cards if the momentum can be maintaned past 11:30 tomorrow AM.

[fabes]

up or down guys? Got a short that's gonna hurt if we push over 38200.

 

this action is making me nervous and the overseas markets are looking greener then green.

sorry for all these questions guys, but my pockets are very shallow, so I'm concerned at alot of movements.

 

afterhours we tend to follow the global markets from what i have seen. should i rather get out not wanting to risk my position or should i hold. i see we climbing again.

 

advice much appreciated.

[fabes]

up or down guys? Got a short that's gonna hurt if we push over 38200.

 

this action is making me nervous and the overseas markets are looking greener then green.

Edited by fabes, 29 August 2013 - 04:59 PM.

[Beorn]

My short target for my current short trade is +-37450

 

There is a nice H&S formation on the 90min chart also, and we are on the neckline.

Edited by Jakes, 29 August 2013 - 03:29 PM.