If so many people are unsuccessful traders...

Discussion in 'Trading' started by IronFist, Jan 26, 2007.

  1. here is a simple yet profitable trading method I have been using for several months:

    At 10am sharp, goto yahoo finance and click on "most actives"
    then "top % gainers"

    Print out this list:

    Enter this list on your streaming quotes. I use Scottrade.

    Check if each stock has traded over 100k shares. If not, take it off the list.

    Now, take the top 6 stocks on the list. Write down these stocks and the exact Ask price at that very moment.

    If you have between 25k and 75k in money, you will have 4x margin and enough to buy 1000 shares of each of these top 6 stocks each day.

    You can just check this approach for 15 days before deciding if it agrees with what I am saying.

    If you do end up real trading these, buy 1000 shares each, 500 at the bare minimum. Anything less will make this profitable method a loser.

    Hold these stocks(all of them!) until a)you are up $3000 b)you are down $1800 or c) its 3:55 and time to sell all positions.

    I came up with this method because I would look at the % winners and losers every day and for the life of me could not pick enough winners to be profitable.

    I have noticed with this method that, as many have eluded to, the winners of this list tend to be VERY BIG winners, and the losers of this list tended to be much smaller.

    Overall, the list of 6 will yield only 3 winners. Does not sound great right? However, the winners easily outweigh the losers and overall its profitable over any 15 day period.

    Test it out for yourself without actually buying first.

    Here is the list today and the prices I bought at:

    WFR (in at 50.15..10:03am)
    NVL (in at 34.45..10:03am)
    TPX (in at 22.60..")
    KND (in at 29.74..")
    IRF (in at 41.08..")
    NTY (in at 51.83..")

    notice that NTY is a big loser today, but my stop loss is set for the entire daily portfolio. If I am down $1800 for the day, I sell off the entire portfolio.


    I can post the last 3 months of results if you would like to backtest the strategy.

    This is just a plain and simple method that has been working. It's not earth shattering. I average about $225 profit per day.

    Take care.
     
    #31     Jan 26, 2007
  2. #32     Jan 26, 2007
  3. Very interesting... Have you tried the REVERSE and gone short on the biggest decliners ?
    I wonder if your long-only method is working only because we're in a bull market right now ?
    If BOTH long and short techniques work most of the time, I'd say you got a winner here. If not, your long-only systematic approach will die with a bear market....IMHO.
     
    #33     Jan 26, 2007
  4. dac8555

    dac8555

    right...it isnt the position that makes or loses money (becuse if someone buys and loses money, it may have been a lousy short as well based on a lack of good r:r or discipline...not based on the trade itself.

    time is also another factor.
    at the core...it is true...DO THE OPPOSITE OF WHAT THE LOSER DOES.

    but the opposite is not the inverse position, the opposite is hard work, discipline, study, technique, revision etc.
     
    #34     Jan 26, 2007
  5. lescor

    lescor

    If no one had to pay spreads or commissions, there'd be a lot more successful traders. Fading a loser won't solve that problem.
     
    #35     Jan 26, 2007
  6. Dustin

    Dustin

    Funny, our methods are nearly identical (using Yahoo at 10am). I have 14 charts to put up my favorite winners and losers from this list. But we differ a little in the fact that I will take these long or short, and take either direction. WFR was a great long this morning (im still long some), but NTRI was also a great long. Got to be flexible. I think COLM and VPRT could be great long breakouts still today, and WFR should have a little steam left.

    This month I've averaged around $800/day just doing this stuff.
     
    #36     Jan 26, 2007
  7. dac8555

    dac8555

    come on. speads these days are virtually nil in anything liquid, and comissions are as cheap as they have ever been and getting cheaper.

    the cost of entry into this business and the ongoing costs (slippage and comissions) are cheaper than any business in the world (well maybe with the excetion of being a head hunter...all oyu need is a phone and computer).

    I dont even count these as one of the top 5 factors.
     
    #37     Jan 26, 2007
  8. My thoughts on this, are that it isn't the decision thats taking out the trader. It's the MMs and brokers watching the clients order flow. Once you enter real money, you become their target. Heck, they can even moniter your trading patterns and when you give in.

    I've had trades, where i should have been 100% correct on direction. For instance, indexes were soaring, particularly SOX and i bough MRVL on takover rumor (reverse psychology). That day they tanked mrvl 6% for no reason on thin volume. The moment i cut my loss, then they turned it on a dime back up in tune with the market. I see a lot of that.


    Am i the only one that sees this often?
     
    #38     Jan 26, 2007
  9. Pekelo

    Pekelo

    I posted this in the Reverse psychology thread a year or so ago:


     
    #39     Jan 26, 2007
  10. billsims

    billsims

    Based on my own bitter experience (not to mention tons of money paid in "tuition"):

    - Develop a comprehensive trading plan that specifies setup criteria, entry, stop, and profit targets. Parameters should ensure that you take (many) small losses and (lots of) large gains. Be sure the plan includes consequences for not following the plan (eg suspend trading for a day, a week, etc, revert to minis until rehabilitated, etc).

    - Follow the plan

    - Follow the plan

    - Follow the plan

    - Etc, etc
     
    #40     Jan 26, 2007