Managing multiple positions

Discussion in 'Trading' started by DayTraderNYC, Aug 22, 2002.

  1. Does anyone trade multiple positions? like 30 - 100 different open positions? If you do, how do you efficiently manage them? There are several very successful traders at Worldco who does this but, of course, they won't tell me their secrets. I do know they have both long and short positions....and as to how they pick the stock, I don't know. Also, if the market turns around on them, how do they manage to curtail their losses if caught in the wrong side of the market? They do have a bias towards how the markt is doing...but what is amazing about them is that their down days are very small...and each of those down days are very small losses comapred to their winning days.
  2. talk to RS7
  3. Sure, we have a number of traders who handle 100 or more "opening only" positions almost daily. It takes calm nerves and a plan. Monitor the postion window, with P&L in green and red accordingly, by sector (so you can more effectively read the whole group at once)...and either scale out or exit at a time where the overall market is either peaking or reversing.

    I obviously don't recommend this to the faint hearted or newer traders. And as far as "managing" a portfolio for longer time frames, volatility moves with volume are easy enough indicators to use for exits.

  4. Don I think daytradernyc was referring to the physical aspect of managing those positions... like, i need to exit 20 losers RIGHT NOW... is there an efficient way of doing that? if i had to enter orders for each of them individually it would take ages..and i'd get killed with shit prices (by the time i get to the last few).. i've got a lot of nice ideas i want to try out with mass multiple positions..but managers the suckers screws me i really need to get accurate exits (since the difference in size between losers and winners is not that great)
  5. Exiting bunch of positions at once is not really a problem for me since my execution allows me to cover all or one or anything in-between with press of a couple of buttons. Let me get a bit more specific about what Im looking for:

    1) How do you pick the stocks you will trade that morning. The trader Im referring to is 100% technical. He comes in at 5AM each morning (!) and he starts to enter his oders at around 8AM. It takes hime 1 1/2 hours to finish his orders. He avoids those stocks that have any significant news on them - I think because he doesnt want to get whip sawed and get stopped out easily. He picks mainly thin to mid cap stocks...mostly under $500K a day avg vol. - again, to weed out the mulptile players in that stock I think.

    2) He also has filter that he uses to purchase/short stocks mid-day. I think he uses some basci TA rules like (on the buys) stocks that goes above the high of yesterday with uptrending last few days,,.etc etc. (I started another thread on this topic before..but didnt get too many replies).

    3) Once he gets filled on his orders, he puts a strict 30 cent stop-loss. I think he does this because he has already taken into account for the volatility of the stocks he is trading - and he knows they dont gap up and down by more than 30 cents usually.

    4) He adds to his winning positions and gets stopped out on his losing positions. So it's very typical to see about 30 or 40 losing positiions...all with 30 cents losses, more or less.. and with only initial 600 share position he opened with. Then there will be few winning positions with 1000, 2000 or 3000 shares...with profits of $1000 or more. But he always opens with 600 shares. I dont know where he came up with that number.

    From what I can tell, he makes his money when the markets are trending, of course...either way. He puts up 20 to 50 bullets on any given day. So he is both long and short everyday...with bias towards the way the market is going. The amazing thing is, when he has a losing day, it is not that large, relatively speaking. The biggest losing day Ive seen is maybe $7,000. That was maybe once in every 6 months or so. His usual losing days are in the $1000 to $3000 range. His winning days are huge at times...+ $20,000, +30,000 and beyond. His average per day is, I would say, about $8,000 a day = $2M a year. That was last 3 years. I am not sure how he is doing this year..but I cant imagine him doing much worse than he has done in the past.

    What amazes me is the way he manages his positions. I mean, let's say the market is trending up and he is long 30 stocks and short 10 stocks. It would be nice if the market kept trending up but at some point, it will turn and somehow, he is able to close them out with most of the profits intact. Im sure he is probably off 20, 30% from his high of the day...but, still, a good % retrace on his profit. I have tried buying 10 or 15 stocks when the markt was trending. I might be up $1G, $2G at one point..but as soon as the market truend, I gave back at least 1/2 of it. Im just curious as to if people had any methods to manage and take out as much out of a position as possible with that many positions open.

    OH..this guy is usually done by 12 noon. Home at 1 and walking his dog probably.