How many Trades?

Discussion in 'Trading' started by tradertravi, Apr 2, 2011.

  1. All

    I am a Swing/Position Trader. I enter with the idea of getting 20% on a stock whether it takes a week or 2 mos. I try to leave a portion of a trade on thru Earning if I am doing well to see if I can keep building on it as time goes on but I consider those gravy..

    With that said..I have been working on a technique that so far is in my opinion better than 50% success...taken couple years to work out and fine tune.

    After 10 trades over 3 mos I am up 35%...How mant trades do any of you recommend I put in before I can realistically think that I may have a system that is somewhat workable for now and I can look to start increasing my size a bit. I trade only stocks btw...

    I am thinking 20-25 trades but hoping for some experiences from others..


  2. quynyth


    How many trades..We can say almost all trades can be done are so useful for everything.

    10 key typing test
  3. Going long in a bull market might make you feel like you are a genius but going long in a bear market might result in having your head handed to you. The problem is when does one start and the other end. Right now you may have something and then again you may not. After twelve years, my experience suggests that daytrading is the safest alternative.
  4. not really interested in Day trading but appreciate the suggestion...and I know how to read the general market averages so I am not buying in a correction or Bear Market...Even in a Bull Market you can lose your shirt if you dont buy/sell correctly
  5. TT

    When I started stock swing trading 20 some years ago in the early 90s I had wild P&L swings over the span of the first decade. It would do great for maybe a year or two and then it would all change on dime and I started losing. It was frustrating. I kept thinking my technique was all wrong when the losing streaks hit. I thought “am I was missing something?” So every time I got frustrated, I decided to tweak the technique. And as you might guess, I lost my balance in trading and I would eventually wipe out.

    Finally I learned one of my biggest problem was I did not understand the markets I was trading in. So after some back testing I learned I could not use my techniques any time I wanted to with the markets. I learned to take what they gave me when it should work. Then my P&L leveled out. It was frustrating because I was no longer made the big gains I once did, but the best part of it is I left behind the big drawdowns that wiped me out and I learned to control my risk better.

    Hoodoo is right, The old saying is “Don’t confuse brains with a bull market.” During Bull Markets traders over estimate their trading skills and take on way more risks than they should (I know I did this several times). First we gain over confidence from trading the bull and begin to push it by risking more. Next we talk ourselves into putting aside our money management rules so we can grab a big piece of the market. Then it collapses. We get humbled when the market shifts to say a bearish consolidation and our risk heavy trades get killed. But we don’t give up. We stay with the bigger risks. Right up to the point our accounts collapse.

    If you can trade your method through the next 3 or 4 years (and make consistent profits) then you will have something. The toughest thing you will have to do is learn when to trade and when not to and to believe in your methods through all kinds of market conditions. For example for me 3 or 4 max consecutive loss drawdowns in a row are the norm for bullish swing trading during consolidations, but 4 to 6 max consecutive loss drawdowns in a row are the norm in higher volatility bearish swing trading. Trading through the pain of 6 consecutive losses in bad times is a mental nightmare. However, these are the thing that make or break you as a swing trader.

    So I would not worry about size until you have demonstrated to yourself that you can trade through almost any set of market conditions.

  6. If you can make 35% in three months, you are better than anyone in here. You no need to be here to ask any question as none of us are qualify to give you any advice.
  7. TY rabbitone-

    Appreciate the personal experience. I will do what you suggest..Whats the rush, right? Markets arent going anywhere and neither am I.

    Are you still swing trading? How long do you try to stay in a stock? or are you just shooting for a certain % return?

    As an example of my style....I picked some shares of TDSC on Friday ...good looking small cap stock with some room to run on the upside I hope. I figure I sit thru a week or two of consolidations after this recent move up and then its off to the races if it can stay above recent resistance at 53 area..Hopefully add more to a winner if it holds up..regardless..I am breakeven on my stop loss now...worse case its a scratch trade.
  8. 10000 trades or 50 years of backtesting using random data generator,10 years of high modality over at least 10 instruments
    Or, theoretically proved no loss system with market neutrality.
  9. TT
    Yes, I still manually swing trade some. Most of my swing trading is now automated. I am almost shut down now. I’m retired and I am getting ready to spend the summer at the lake. I will take a few more manual swing trades until the weather cooperates.

    How long I stay in a swing trade varies all over the map depending on the technique and target. A long trade in this market with fast technique may be 4 to 7 bars, average technique is 9 to 12 and long position technique may be 14 to 20 bars. But this varies with market conditions. Short trades are much less. However, this is a business and I usually don’t count price bars I only use performance and metrics.

    I am not shooting for a % return. I am shooting for consistent performance based on my risk to return model by technique. For example an average 3% return per trade makes no sense if I have to have an average 2% risk per trade.

    I looked at TDSC. Nice stock. Glad you are at break even. That’s a wise move. But you may get stopped out more with this stock today than you think you will and you should be prepared for it. Here is why - with TDSC volatility has risen. To look at a simple case of volatility add an ATR indicator to your chart. You can see from last summer the ATR has gone from the $0.60 to $1.00 range to more recently $2.00 to $3.50 range.

    One technique (documented in Tharp I believe?) I have used a number of times before is to reduce my position size based on this increased volatility. That way the losses are in line with the volatility. Because all it takes is a few big high volatility losses to wipe out weeks or months of low volatility gains.
  10. Rabbit-

    Appreciate the thoughts on volatility..I pay attention to it but have a slightly different take on it..My experience is that markets move from low to high volatility and high to low volatility..I kind of have always seen from personal experience that if a move is legit and it moves like this in (3) needs some time to digest gains and calm down..since this seems to be constructive price action to me although a bit "overboard'..hopefully it will settle down and start acting a little more normal..anyways..who knows...I was tempted to take profits at the close Friday but figured I am not in this to take 12% gains and get out..but like you said..I could be stopped out by Wednesday...time will tell!

    The longer I trade the more I see its as much feel as it is working within your system and process....
    #10     Apr 2, 2011