overall, do you have better success with Longs or Shorts? Because the market has an upward bias, the shorts may not RTM as well as longs. is your max position on a short smaller than on a long position in the same stock? the potential loss on a short is much higher than on a long.
Lescor, I too was hit hard by MXB on that day (2-Mar-10). If you don't mind, what did you do as it was rising beyond twice its usual range? Just kept averaging up? If yes, until when would you continue doing that? Also, Mcsi (MXB) was in the news on that day and day before. Did you pay any attention? Thanks.
i can sympathize with your pain on MXB, if i hadn't decided to play basketball that afternoon, i might have gone in it as well. one thing i've noticed, on some of the trades that are pure RTM trades, is when they go wrong, they can eat up several 'good' trades. in hindsight, it's real easy to say "here's the point to enter, look at how small your risk reward is, and you wouldn't have had the pain" - but it doesn't show how the trade looks in realtime, and how many other trades present profits in realtime but don't give you such an 'obvious' chart entry. it's not for everyone, of course. and my most important lesson when i'm trading reversion is, after it's calmed down from being crazy, to know when the bounce (drop) won't happen, and to not get stubborn at that point. take the loss, and onwards.
Stock has a tiny gap or no gap at all...starts to move on high volume.....we know there is a catalyst or engine behind move as most of them would need one in order for trade to setup like this. Assume you fade this move.....also assume it continues moving against you. In considering an initial trading plan - or as a rule of thumb - how many times would you add to this position?
MXB did a lot of damage because I had it on with size early in the day. It wasn't actually a pure rtm trade at that point, but was part of a portfolio of a bunch of other trades. Later in the day it hit the criteria as an intraday fade trade. It wasn't a strong signal and I might have skipped it if I wasn't already in a bit of a revenge trade mood with it. Of course I lost money with it in that account too. That's about as bad as a single trade gets for me. I'm mulling over ideas for some kind of override rule to see if there's a good way to cut those losers off sooner. In hindsight I didn't screw anything up with this trade. If the same situation came up again the outcome would be the same. It just happens.
Walk away from the computer. Seriously, if I know things are covered and systems are running as they should, sitting there and fretting over a crappy pl is about the only time I get stressed and it's pointless. The longer I sit there, the more likely it becomes that I'm going to muck something up with a system override. So I leave and work out.
Lescor, suppose, you've got a strategy which is completely new to you, you start with a minimal size as you mentioned. Strategy shows positive signs. How soon will you normally decide it's time to increase and how big? A week, month? Two times, 10-fold? From your experience.
Oh so close to the best week of the year if not for one stock. MXB cost me about 12 grand on Tuesday. Other than that it was uneventful and pretty quiet. +20,862 on 601,000 shares traded. P/L each day was +5, 0, +3, +4, +8
Lescor, If you found out that you could automate your strategy would you be happy or sad? Also, once you started making good consistent money how would you ensure that no broker, prop firm, etc. would flag your account and start to frontrun your orders thus eroding your edge?