What would you do if you had a profitable system...

Discussion in 'Trading' started by IronFist, Feb 13, 2007.

  1. But the system only gave you one or two long or short signals per day, and each one was only good for about 2 cents per share? (assuming a $20-30 stock)

    You can't really keep increasing your position size so that your 2 cents per share per day gain becomes enough to live off of, can you? Say you're buying $60k positions of a $21.80 stock. You make your 2 cents, and that's about $55 profit before commissions. You can't just jack it up to $600k positions and make $550 per day.

    Would you:

    a) Apply this system to more than one stock so your "one or two signals per day" become "one or two signals per day PER STOCK?"

    b) Tinker with it to try and make it more profitable?

    c) something else?

    I'm just wondering. Say hypothetically this system causes you to enter and put a stop loss 2 cents below your entry price. Your target price is +2 cents. That's tight, and is a 1/1 P/L ratio, but you have a 70% success rate with your calls so it's ok. The +/- 2 cents comes because say this system picks up near the end of trends, and you need a tight stop in case you jump in right as it's reversing. Unless it's the beginning of a huge trend following a short choppy trend, but how often does that happen?
  2. $550/day would equal making a 'conventional' salary of around $140000/year or so. Without sitting in the office 70 hours/week. I say, $550/day sounds pretty good.
  3. B - and apply it to 10 to 20 stocks. Thank would be about the limit to manage IMHO.
  4. bluud


    c - 1.use this method for some stocks (if it works at least 99% of the time) 2.find a better method to apply to other stocks

    c -1.forget this method or tinker with it (if there is less then 90% chance that it will work) 2.join IB olympiad and other trading contests maybe you might win 1000$ with it

    c - buy and sell 1M$ worth of stocks with this method (if less than 90% chance && mom and dad will be paying the losses)
  5. I don't want to be a party pooper but

    scalping for 2 cents, is quite frankly rediculous, there are better ways to trade

    I also place 2-3 trades per day, but I have at least 5.00 points to take not cents

    and needless to say, I scale in big, ....hey futures, what can I say
  6. I like it (I choose A)...leave it just like it is...just find more stocks...the trouble is do they all trend at the same time? Can you hire anybody without them discovering how it works?...can you automate?

    Do you have to be glued to the screen for the average of 2 sigs per stock per day?

    Can you trade other methods alongside it?

    anyways...I like it very much and this thread is fun...(I think)

    Your target price is +2 cents. That's tight, and is a 1/1 P/L ratio, but you have a 70% success rate with your calls so it's ok
  7. TD80


    In order of desireability:

    1. Find a better system

    2. Lower your transaction costs and max out capital (prop)

    3. Sell the system to unknowing consumers and retire a millionaire.

    If you think these are not in the proper order, then I would seriously consider whether you want to be a trader or not ;)

    Oh and for you wise guys who say "do all 3", of course that is a viable answer, but that is not the point! ;)
  8. I once had a system that traded the marketmakers individual phsychology of the way he opened the market...

    I scanned for opens that historically displayed certain charatistics and played 10 of them ...all on red... 7 of them would always hit the target b4 the stop...it was fun until it stopped working and I started to treat trading in a "not gambling" way...

    no I did not invent Don Bright's enveloping...so forget it...those guys are doing something entirly different...:)
  9. A two cent scalp is ludicrous. Find a better system. I don't even know how you would know your system is successful for a lousy two cents.
  10. well...a 70% winrate with a 1:1...

    #10     Feb 13, 2007