Ok. no question about this one then -- NYSE listed stocks. Trade 100 shares... on a really really bad day you'll lose $200... most days wins/losses will be less than $50 unless you're doing something wrong. There is the pattern day trader issue of course so you may have to borrow money to get to that limit, but really you only need risk say $1,000 or so for your education... if you trade 100 shares and go down a thousand (gross, forget commissions... for now finance that out of your pocket) then you're doing something wrong and need to regroup. make sure you go with a cheap broker too. you dont want to be paying $8 / trade on 100 shares or something like that. absolutely no doubt in my mind that these are the best markets to learn to daytrade in. especially if you have a small account, you don't have any business trading futures. do the math and figure out how leveraged you are on each trade... you can't trade like that.
hi bxurbx, there are a lot of questions here. let me see what i can do: 1. measure of trend... yeah that's not easy. i dont like up weeks... forget ADX or DMI or anything like that. you might be able to create a proxy trend indicator from a fast MA - slow MA type indicator, a slope of MA indicator, or a linear regression line. the problem with all of these is that they will often boil down to a binary (yes or no) answer with regard to trend... and i don't think it's always a yes or no. when you play with it and tweak it it doesnt capture the uncertainty at the turns that a trader would see. it's hard to beat higher highs and higher lows as a measure of uptrend... but it will take some work to code. my results using systemized versions of this have been less than satisfactory. 2. yes. maybe risking to a previous pivot on the individual stock... maybe risking a % of average daily range... make sure you're comfortable with whatever you choose and that you really understand the implications. 3. targets. i think for a system like this maybe no target is appropriate... not sure... you could scale out at multiples of your risk. i'm a big fan of that.. you never have your full size for the big moves but you will have many trades that would be losers that you end up making money on. i dont think this is "basic stuff" and anyway i love "basic stuff". the most successful traders i have trained are the ones who have most immersed themselves in the basics... hand charting, hand backtesting (a big fan of that btw, but you have to do it right), keeping a journal, reviewing their trades, etc etc. success isn't about the sexiest trading system or having the highest yielding limit order script on some website somewhere. it's about relatively simple concepts coupled with behaviors that go against our nature for the most part... and about practicing until those behaviors are second nature. basics and fundamentals over and over. very few people will submit themselves to the discipline, shed their preconceptions and do what it takes to be successful. put me in front of a screen with nothing but the last price of a stock flashing every trade, give me a pencil and paper, and i can outtrade most of the systems, algorithms and other traders out there because of years of focus on the basics. never apologize for basics!!!
thanks! my thoughts on the trend direction are based on a break of a pivot and last two connecting pivot lows. once i see a close under them, i change direction of stocks i play. if im wrong, ill accept the draw down and switch back once the pivot changes. this is the part of the system i am most concerned about. i am expecting some losing DD at some point, but because I developed this after March of last year, it has been during a raging bull. I need atleast a correction to see how this pans out. on a side note, i am affraid of using any indicators, even for trend analysis. i was scared away from them after trial and error.
i think you have the right idea but probably not quite there yet on trend identification. you also should consider highs and probably the character of the move off the lows... hard to quantify but if you're going to do something like that it needs to be accounted for.
interesting. i guess a million dollar concept is to be able to always be on the right side of the trend, but what areas of the trend are quantifiable? if i am looking at the weekly move off the bottom of the ES since march, my screen time suggests it is not a bottom. when i use the daily, i am in an uptrend but overall downtrend off long term highs. i guess that is why i was using weekly pivots to determine a trend change on the weekly but part of the identification was the last 6month of the daily. the reason i use the weekly as the pivot is because my trades dont last more than 2 weeks and the daily pivots make it too volitile and i would constantly be switching positions. any thoughts on validating a trend without indicators? if this is too off base on the thread, just let me know and ill try to refocus
that is the way trends work... interlocking conflicting timeframes... you have to figure out some way to reconcile that. remember too a trend change will show first on the lowest timeframe.
so a trend change should be looked at as the guide on the lower timeframe or just for the change? i managing my trades off the daily and using the structure of the weekly to identify entries. the actual direction of the weekly wasnt a concern. it was the last 6 - 8 months of daily I focus on for trend direction. the only issue is i was considering it a trend change when the weekly tl and last pivot was broken with a close.
I find it a little complicated too, but it could really help out other traders. I just hope there will be new posts
he is bang on that most members don't have huge funds to invest however, i couldn't disagree more about the notion that the system is too complicated. it is one of the simpler strategies i have seen and the core concept is ultra simple - buy stocks entering the sp500 to ride the wave of institutional money chasing the stock. all systems need liquidity. it is almost always preferable to not move the market. having little cash is actually a benefit in these regards - you can trade the illiquid names and you are very unlikely to move the market.