hello all! Im looking for a technical trading system that can make just a measly 3-6% ROI (not including fees and taxes) every day. I currently use alchem charts and will not be switching so don't suggest other services. a 6% ROI with a stock like TSLA is only a 1.5-2 points move in my direction from my entry point. this happens with ease and regularly. I am currently using the 5 min chart using a combination of DMI+-, MACD Histo, MACD and Signal Line ,Fast %K and %D, I look for +DI or -DI to be below 5 (each stock has its own line for this I back the chart out and draw lines to catch the upward movement on the +DI -DI ) %K to be above or at 95 %D to be below 5 (each stock has its own line for this same process used for +DI and -DI) I also use the histo bar and apply the same process as above although this changes and not that reliable but it does give me a nice warning when a high or low point has hit. I might adjust this weekly to catch all the highs and mid highs. The only Time I do not enter the market is if the MACD line has crossed 0 within the last 10-15 min. this is usually a fake out. If you look at the attached chart. this setup happened 2 times today. I purchased on the open got in at 235.90 (pre market had the signal) I "dripped" this position taking profit at 2% all the way up to 10% I noticed the high histo bar and sold everything off at the open of the next candle and at 11:05 I I purchased at 244.05 set a sell point at my 6% ROI mark and was out in about 15 mins can anyone perfect this system or maybe run tests on it via software to see if its a consistent winner? or maybe someone point me to a technical system that can help achieve my goal? thanks all!
With 3-6% a day you will be the richest man known to mankind in no time yet you used the word 'measly'. With $10,000 initial capital, assuming that you are making on average of 4% a day. 1st year = $122 Million 2nd year = $1.4x10^12 In less than 2 years you will be the richest man known to mankind. May I know your real name because I would like to have an autograph of yours when you are in the front page next year titled 'The Richest Man Ever'.
He is either a new newbie that been brain washed by one of those get rich fast scum seminars, or.. He is a vendor that want to sell something here.
What he is not a where of is there are limits of safety, say you get up to 10,000 contracts of ES, you stick a stop on computer and it gets hit during lunch time, you can have slippage 5-6 points or say you are targeting profit of 4.00 points and you put in your limit price, the entire whole will see it on the dome, want to bet big brokerage houses won't allow price to get there? And at some point it not going to work for you when you reach certain sizes as those willing to take other size will simple not take other side. I have for fun coded possibilities of taking huge sizes and trade and most winning days of doing a one lot were losers if you openingly used hard stops and limits. Plus of course you doing so much size, someone will notice you and take a real good interest in how you getting in and out, it not that tough to brake other folks systems if you have designed and back tested other peoples stuff for years. Plus, most people don't realize how much risk there is in day trading, it truly is so huge compared to what you make and for many how much you lose. Doing ten trades per day risking $100 to make $200, so the risk to reward for the day is 5 to 1. Day trading I believe is toughest business to learn and depend on yourself to make a living cause of all the hidden factors of learning oneself. And the freak chance that markets close again like 911, and history repeats itself of exchanges closing again, or they hit limits, and your last trade was long, you be wiped out hugely when exchanges open again. It is the 1% that back testing can't take into consideration, but you really have to if you want to trade for years. Of course, he could have meant 4% on original sum of $10,000 being $400 per day if his account was $10k.
fair enough on all accounts. however I understand that nobody knows what the market will actually do next. its completely random and each moment in the market is unique in its own right. the only thing we can do is recognize patterns and come to a conclusion of probability that a certain action will occur due to signals,patterns etc. Im also aware that patterns can and will change due to new traders coming into different stocks. Im aware that you will have losses. there is no perfect system. but the probability of winning more than losing is real and possible. however looking at it from a numbers standpoint using only a select few stocks it is possible and probable. if you look at what 6% actually is (each stock is different) TSLA for example if purchasing puts or calls oct15 ask and bid price has about .20 to .15 difference. and the bid price usually increases by .05 every .10-.15 points in the stock. now to reach a 6% ROI off of say an $8 option you would need the bid price to reach $8.5, no we know there is $.20 difference from our purchase price so our stock will need to rise $.5+$.2=$.7 movement. and if the bid price moves up in $.5 increments every .10/.15 points the stock moves we are looking for (14 ".05 increments" x.15)=2.1 points or (14 ".05 increments" x.10=1.4) using TSLA as the example over the past week Monday had 13.18 gap between a high and low Tuesday 9.27 gap between a high and low Wednesday 10.06 gap between a high and low Thursday 11.37 gap between a high and low Friday 12.77 gap between a high and low your telling me its not possible that you cant get your 1.5-2 move with that much movement? can someone inform me of how my logic is flawed? and really this thread was about a technical trading system not the ROI. thanks for all the excellent input
I'm not saying whether your system is right or wrong -- I'm just saying to you, and all the other people asking similar questions on ET...is to just DO It. and see for yourself. doing is your Best Teacher. You don't need positive or negative confirmation from random people on forums. Your own Experience from Doing is all the confirmation you need.
I would never go above 100k in my options trading account and even then I follow a rule of 50% of trading account at risk and no more than 25% of that at risk in any given trade. so the risk of blowing up a position is not a concern. Im not looking to make 1-5 trades a day. Im looking for a 3-6% ROI off of my 25% total. when I hit that i'm done. and Yes I want to trade for years and never need to work for anyone but myself ever again. And any extra money I make when my account is at its max 100k will be moved into long term blue chip stocks and collect on dividends while selling calls as insurance.
I have been doing and in the example above it was successful i have done it 20 times now and as of right now winning. I cwanted to see if anyone had any input to make it better or learn something new or to test it with software in simulations.
It all comes down to experience and back testing you rules. In futures it can be done so long as contract size don't get staggering high and the percentages never increased and always based on same amount and not account appreciation. It much tougher in stocks cause you not going to have the leverage as you do in futures. I only been trading options on stocks/ETFs two years and not gotten close to 3% daily returns, am profitable but it is longer duration method, I only know of Bone who day trades options pretty well and longer term, I wouldn't try it as my specialty is day trading Indexes and long term commodities. And I doubt I will ever get 3% returns any more as my desires for bigger profits been swallowed up to concentrating on not losing often. Day trading losses for me is so much greater than what I generally make daily, three losses in a row for me, if be 6-8 weeks to recover for one day of losses, however, the stats of the past, and real time trading has shown to be very consistent. You should be at a stage where you know better than to ask forum for help, as most that are here can't or wouldn't help you if they knew how. Very few traders share anything worth while here, but you get many spring up vendors. I get a kick out of breaking down their methods, some people like crossword puzzles and I like....