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Steve,
We knew we were early, even though we made money on the previous trade. My
brother is in the semi conductor industry (which comprised a majority of our
holdings) and we knew about the profit picture ahead of time (from his rep
firm and their clients, he sees what they're buying). As you know, we need
to trade the system even if we know we might be wrong. Now, later in the
month, we're expecting the earnings in the semi equipment area to be weak.
We'll see. At least the loss to date is quite small and 12 points could fix
everything. :)
Good luck,
Guy
Paranoia...you only have to be right once to make it all worthwhile!
-----Original Message-----
From: owner-metastock@xxxxxxxxxxxxx [mailto:owner-metastock@xxxxxxxxxxxxx]On
Behalf Of Steve Karnish
Sent: Thursday, July 13, 2000 7:01 AM
To: metastock@xxxxxxxxxxxxx
Subject: Together again.
Guy,
Took profits on our two long S&P contracts (1468 & 1456) and for the "wild
hairs" we went short on the opening. The more conservative money is now on
the sidelines, waiting for what many would call a failure swing.
Steve Karnish
Cedar Creek Trading
http://www.cedarcreektrading.com
----- Original Message -----
From: Guy Tann <grt@xxxxxxxxxxxx>
To: <metastock@xxxxxxxxxxxxx>
Sent: Wednesday, July 12, 2000 6:49 PM
Subject: RE: Risk of ruin, amount per trade formula?
> Jean Jacques,
>
> I can appreciate the use of stops, it's just that whenever we've used
them,
> they have cost us money. That's why we went over to visual stops. I have
> found with stops and commodities, they are almost useless. Take those
> multiple limit days when the market is running against you. Your stops
> invariably take you out near the absolute top or absolute bottom. In that
> instance, I don't consider those stops to be a safety net at all. In
fact,
> I consider it to be terrible trading. If you're not working with multiple
> limit days in one direction or the other, you can always get out. Oh yes,
I
> forgot to mention, we never trade a thin market. Ever! Learned that
lesson
> years ago trading eggs, hides and bellies. Then you're just asking for
> trouble.
>
> Whenever faced with multiple limit days, we have waited for a pull back to
> exit the trade. Thankfully, we haven't seen that in years, since we're
only
> trading S&P futures and have never seen the day when we couldn't exit the
> market if we had wished to. Additionally, we try to trade with adequate
> capital reserves, so as not to put ourselves in that sort of predicament
of
> having to exit a trade due to a margin call. Since this is a secondary
> business for my brother and myself, and we don't use it to live on, we're
> better able to weather these draw downs with a little less emotional
> involvement. Again, it's a moot point in my opinion, but again that's
what
> makes trading so much fun and why we can be on opposite sides of a trade
and
> each make money.
>
> In terms of our equity trading, our approach is to try to balance our
> portfolio so as not to have all of our eggs in any one basket. On our
last
> long position (executed 6-23-00, I believe), we bought 28 different stocks
> in various industries, trading a like dollar amount of each (unless the
> stock was selling for more than $100 a share, then we bought just 100
shares
> regardless of price). While a few went against us, eventually a bunch
went
> our way. I guess you could say we were trading a mini-fund and trying to
> spread our risk over the entire trade. We did have about 20 options each
> that went up and down but eventually finished in our direction as well.
>
> Since we're trading basically in the direction of our S&P futures signal,
> we've done fairly well since our signal has been right a lot. We're
> currently on a losing trade, but again we don't look at intermediate
> results, other than to commiserate with each other when it goes against
us.
> :)
>
> Guy
>
> Paranoia...you only have to be right once to make it all worthwhile!
>
> -----Original Message-----
> From: owner-metastock@xxxxxxxxxxxxx
[mailto:owner-metastock@xxxxxxxxxxxxx]On
> Behalf Of Macromnt@xxxxxxx
> Sent: Wednesday, July 12, 2000 4:21 AM
> To: metastock@xxxxxxxxxxxxx
> Subject: Re: Risk of ruin, amount per trade formula?
>
> Guy,
>
> About the stops, it is my almost 30 years experience that you can put NO
> STOPS at all. There may happen a completely unforeseen event that will
> triger
> a huge move and you need a sfety net. It does not mean that stops should
be
> used as a normal way to get out of a position. Your stops may ne very far
> (and in such a case your position shouls be reduced accordingly) and never
> get hit. But they are there just in case.
>
> As for the initial margin, teh exchanges take into consideration the
> volatility to ask for the initial margin. In fact taking into
consideration
> the initial margin as a mesure of the risk, you are indirectly taking into
> consideration the volatility, which makes sens . But you can not really
rely
> on the exchange for that because they have their own policy which does not
> take into account exclusively the volatilty into account. I have seen
> initial
> margin raise from 3 or 4 % of the contract's value to % of the contract
> value. That's a big risk!
>
> Jean Jacques
>
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