I don't wanna Stack, I wanna Trade...please help
- Thread starter SS
- Start date
SS: Just for you.
How I turned a few 10oz silver bars into 30oz bars last night.
SS, this is a very simplified account of my trade last night using IG Markets Mini spot silver (500oz). For confirmation of my prior trade set up, and that I am not BS'ing you, see here from 14th Feb: http://forums.silverstackers.com/topic-22187-anybody-else-waiting-for-silver-to-dip-page-2.html. Part of successful trading is the ability to be patient.
All calcs based on one contract.
You can see from the first Pic that there had been tested resistance at $34.44 for a few weeks. A break through should signal momentum upwards.
Thus, reference point is 3444, and entry a little above that (exact entry point depends on your plan). The high of 8 Feb was 3451.6.
My plan called for an entry at 3454. Initial stop loss was 3439 (again determined by plan). Margin required $AUD235. Risk $US150
Next determine where you expect resistance to be encountered - ie if it breaks up, how far do you expect it to go? High of 28 Oct 2011 was 3569.1 - and I expected some resistance. So build in a safety factor and expect it to go to say 3560. Therefore aim to get out at 3560 (again dependant on plan).
Now - determine whether risk is worth it!
Risk = $USD150
Potential reward = 3560 - 3454 = 106 = $USD 530
Therefore risk:reward is 1 : 3.5 (acceptability depends on plan, risk management and your trading expectancy) - acceptable for my plan. Thus entered trade.
Result per contract: Margin $US250
Profit $US530 (212% profit) :lol:
Actually, given the discussion on trading lately, I might make this a new thread.
How I turned a few 10oz silver bars into 30oz bars last night.
SS, this is a very simplified account of my trade last night using IG Markets Mini spot silver (500oz). For confirmation of my prior trade set up, and that I am not BS'ing you, see here from 14th Feb: http://forums.silverstackers.com/topic-22187-anybody-else-waiting-for-silver-to-dip-page-2.html. Part of successful trading is the ability to be patient.
All calcs based on one contract.
You can see from the first Pic that there had been tested resistance at $34.44 for a few weeks. A break through should signal momentum upwards.
Thus, reference point is 3444, and entry a little above that (exact entry point depends on your plan). The high of 8 Feb was 3451.6.
My plan called for an entry at 3454. Initial stop loss was 3439 (again determined by plan). Margin required $AUD235. Risk $US150
Next determine where you expect resistance to be encountered - ie if it breaks up, how far do you expect it to go? High of 28 Oct 2011 was 3569.1 - and I expected some resistance. So build in a safety factor and expect it to go to say 3560. Therefore aim to get out at 3560 (again dependant on plan).
Now - determine whether risk is worth it!
Risk = $USD150
Potential reward = 3560 - 3454 = 106 = $USD 530
Therefore risk:reward is 1 : 3.5 (acceptability depends on plan, risk management and your trading expectancy) - acceptable for my plan. Thus entered trade.
Result per contract: Margin $US250
Profit $US530 (212% profit) :lol:
Actually, given the discussion on trading lately, I might make this a new thread.
jnkmbx
Well-Known Member
btw. You can get a free demo account with IG Markets and with CMC Markets.
I prefer CMC Markets interface.
I never use margin because I am anti-debt
I'm a low risk trader. I may not make massive gains, but I also don't make massive loses.
Obviously any money I put into CFDs is non-essential. I regard anything I can't bone something I don't own.
I prefer CMC Markets interface.
I never use margin because I am anti-debt
I'm a low risk trader. I may not make massive gains, but I also don't make massive loses.
Obviously any money I put into CFDs is non-essential. I regard anything I can't bone something I don't own.
Just set up demo account with IG... see how I go.
Want to have it sussed so that whenever we have GFC2 or even smaller downward event.. will go short big time then load up of physical. Set stop loss's bigtime to prevent losing too much.
Want to have it sussed so that whenever we have GFC2 or even smaller downward event.. will go short big time then load up of physical. Set stop loss's bigtime to prevent losing too much.
LovingtheSilver said:
Just be careful to find the right balance for your stop loss distance.
Silver can be volatile. If you set your stops too tight, you can be thrown out of a good trade by volatility before it gets started. Too loose and it can cost you.
Went short and set stop loss at minimum of 10 pips... probably better to place trade in the morning when you can see the direction the market will be going for that particular day. Went in blind with the one i just did but it is demo, practice for now and still working through the educational side of it.
I've used considerable margin in the past only to haunt me for years. For most traders, except for the extreme professionals, they'll lose a lot. I'd take the advice of the experts and leave margin trading to them. But if you feel you really have to try it, I'd recommend trying a very small amount and learn to lose it graciously. See how it feels when you go to bed at night. If you can handle it, then try more but eventually you'll get to a point that you'll over do it and then it may become too late as emotions get in the way (for most people). At that point you'll be paralyzed to create an exit strategy that cuts your losses. Good luck, but you're not missing much - trust me, only gaining heartache.
LovingtheSilver said:
You need a trading plan - preferably a written strategy. You need to have a trading strategy that cherry-picks the highest probability trades, presenting themselves within acceptable risk parameters only, fitting with your risk management criteria. Enter these trades at a preset and predetermined level (on-stop orders) - at the most favourable time, exit these trades at a preset and predetermined level, using stop losses.
You are trading. Don't, under any circumstances, take a position just because you feel you have to be in the market (this would be considered longer-term investing). Be patient. Only take a position when conditions are favourable for a positive outcome, and are in line with your trading plan.
EagleOne said:
If you follow the points I mentioned above with self-discipline, you can't get yourself into this position, and you should sleep fine.
Hey Wrcmad, Thanks for all this, I am learning alot already. Many thanks!
Igmarket has been pretty helpful. I just opened an account yesterday and they called me up this morning. The rep spend 30mintues going through their platform with me.
I am still trying to figure out what stop loss I should use, it's very volatile. when it was around 34 the volatility was ~1.50, when it was 35.5 it was 0.50, when it was around 37, it was ~0.40.
I am going to play around with very small numbers with A$1 contract for now until Bpaid gets processed
Using your previous 'momentum' move, the next resistance is at 35.70, therefore I think I will put an order at 35.80 and stop loss at 35.60
I don't know if the current smack down from 37 is a raid. I believe Silver followed gold. When Bernanke spoke, it came down and that triggered the momentum players. Lease rates are still at -0.48. Strange that ECB just released 700billion and gold went down. What do you mean by Buy the Rumors, Sell the Facts?
Thanks again Wrcmad.
Igmarket has been pretty helpful. I just opened an account yesterday and they called me up this morning. The rep spend 30mintues going through their platform with me.
I am still trying to figure out what stop loss I should use, it's very volatile. when it was around 34 the volatility was ~1.50, when it was 35.5 it was 0.50, when it was around 37, it was ~0.40.
I am going to play around with very small numbers with A$1 contract for now until Bpaid gets processed
Using your previous 'momentum' move, the next resistance is at 35.70, therefore I think I will put an order at 35.80 and stop loss at 35.60
I don't know if the current smack down from 37 is a raid. I believe Silver followed gold. When Bernanke spoke, it came down and that triggered the momentum players. Lease rates are still at -0.48. Strange that ECB just released 700billion and gold went down. What do you mean by Buy the Rumors, Sell the Facts?
Thanks again Wrcmad.
SS said:
SS,
You haven't gone wrong, my typo.
I went back and pulled up my trade history:- My initial trade stop loss was 3424, giving a risk of 3454-3424 = 30 pips * $US5 = $US150.
At around midnight before calling it a night (and sleeping well), price had moved clear enough of my entry, and I adjusted stop loss to 3439. (This is what I was seeing when I posted pics the next day).
So risk calc doesn't change.
SS said:
Not sure what you mean by "put a limit in this trade"?
I don't use limit orders. For exits I always use on-stop orders, so as soon as my price target is touched (for longs or shorts) my trade will exit at market. I generally don't tighten my stop-loss either as was done in the above example. Moving stop-losses can be dangerous to your plan because your emotions can tend to cause irrational, on-the-spot decisions. Also, you have to be watching the price action constantly - something I don't have time or inclination to do.
If you want, you can use trailing-stop orders. I generally don't because I have been knocked out of some good trades before price target has been reached. Although I have used them for shares where you get a long, extended run.
Wrcmad,
So I believe you would use "on-stop" orders. I presume that "limit" orders is the same thing. When you open a ticket at Igmarkets, there is a "limit" order just below the "stop-loss".
In this case one need to predetermine the price targets and use "on-stop" orders when one is "trading". I guess it depends of the volatility? If the market is volatile like silver, it is best to set an "on-stop" order. If not, such as some shares, it is best to use "trailing-stops"?
Am I correct?
So I believe you would use "on-stop" orders. I presume that "limit" orders is the same thing. When you open a ticket at Igmarkets, there is a "limit" order just below the "stop-loss".
In this case one need to predetermine the price targets and use "on-stop" orders when one is "trading". I guess it depends of the volatility? If the market is volatile like silver, it is best to set an "on-stop" order. If not, such as some shares, it is best to use "trailing-stops"?
Am I correct?
Aaaahhhhh, OK.
Now I understand.
I use mostly on-stop orders, and I prefer them, because my trading plan (philosophy, experience, or whatever you want to call it) is based on the premise that "once price does this, then it is most probable that it will then do that". ie., like an 'if then' statement. A lot of people will dismiss this sort of thinking as hocus pokus, but there is actually a science behind these price moves and why they occur, which I can explain another time.
There is a difference between stop and limit orders:
A 'Stop' order to open is an order to open a position at a less favourable price than the current market price. That is to say, if you are buying, a price higher than the current price. If you are selling a, 'Stop' order to open would be an instruction to sell a price lower than the current price.
An instruction to deal if the price moves to a more favourable level is a 'Limit' order to open. For example, if you are buying, a limit order would be an instruction to buy at a price lower than the current market level. If you were selling, a Limit Order would be an instruction to sell at a price higher than the current market level.
The 'Type' field in IG markets 'order to open' window will automatically complete itself based on the direction and order level that you have specified.
Whether you use 'stop' or 'limit' orders depends on where current market price is compared to your target entry price level, and what kind of event is going to trigger a trade entry. It also depends on your plan and what trading style suits you.
For example, if you are going to buy on a break above a resistance level, you will probably use an 'on-stop' order once price has breached the resistance by a predermined buffer (your plan). ie, once price rises to your entry target, the buy order will be placed. Vice versa with price breaking downward through a support level. Eg.:
A limit order may be used if a bounce is going to be traded. for example, iIf your predetermined trade entry trigger price is breached on approach upward by price to say a resistance line (as shown below), you would use a limit sell order. This implies to sell at a minimum of the trigger entry price. Eg:
Once a position has been opened, a trailing stop is basically a stop-loss order that moves with the order direction, but not against it. For example, if your trade is long, and price begins to move upwards, the stop-loss level moves up with price, but trails price by a pretermined level. If price moves down, the stop level remains fixed at the highest level it has reached, and if touched by price the trade is exited. However, in volatile markets, price can move around a bit and hit the trailing stop before the target profit level is reached.
You should always use predetermined price targets for both entry and exit levels BEFORE PLACING ANY ORDER. If you don't do this, you are not trading to a plan, you cannot calculate your risk and determine whether it fits you strategy, and in all likelihood, you will make a bad call due to emotional trading.
I find on-stop orders fit my plan better, because it is about price levels being reached by the market, not what price I can get once I have determined I should be in or out of the market. Markets can move fast and can get away from you while you are chasing that price.
Trailing stops can be useful in steadily trending markets, much like you find in some bluechip shares, where volatility is lower, but again, it depends on your trading strategy.
Hope this helps (and is not too long-winded)
wrcmad.
Now I understand.
SS said:
I use mostly on-stop orders, and I prefer them, because my trading plan (philosophy, experience, or whatever you want to call it) is based on the premise that "once price does this, then it is most probable that it will then do that". ie., like an 'if then' statement. A lot of people will dismiss this sort of thinking as hocus pokus, but there is actually a science behind these price moves and why they occur, which I can explain another time.
There is a difference between stop and limit orders:
A 'Stop' order to open is an order to open a position at a less favourable price than the current market price. That is to say, if you are buying, a price higher than the current price. If you are selling a, 'Stop' order to open would be an instruction to sell a price lower than the current price.
An instruction to deal if the price moves to a more favourable level is a 'Limit' order to open. For example, if you are buying, a limit order would be an instruction to buy at a price lower than the current market level. If you were selling, a Limit Order would be an instruction to sell at a price higher than the current market level.
The 'Type' field in IG markets 'order to open' window will automatically complete itself based on the direction and order level that you have specified.
Whether you use 'stop' or 'limit' orders depends on where current market price is compared to your target entry price level, and what kind of event is going to trigger a trade entry. It also depends on your plan and what trading style suits you.
For example, if you are going to buy on a break above a resistance level, you will probably use an 'on-stop' order once price has breached the resistance by a predermined buffer (your plan). ie, once price rises to your entry target, the buy order will be placed. Vice versa with price breaking downward through a support level. Eg.:
A limit order may be used if a bounce is going to be traded. for example, iIf your predetermined trade entry trigger price is breached on approach upward by price to say a resistance line (as shown below), you would use a limit sell order. This implies to sell at a minimum of the trigger entry price. Eg:
Once a position has been opened, a trailing stop is basically a stop-loss order that moves with the order direction, but not against it. For example, if your trade is long, and price begins to move upwards, the stop-loss level moves up with price, but trails price by a pretermined level. If price moves down, the stop level remains fixed at the highest level it has reached, and if touched by price the trade is exited. However, in volatile markets, price can move around a bit and hit the trailing stop before the target profit level is reached.
SS said:
You should always use predetermined price targets for both entry and exit levels BEFORE PLACING ANY ORDER. If you don't do this, you are not trading to a plan, you cannot calculate your risk and determine whether it fits you strategy, and in all likelihood, you will make a bad call due to emotional trading.
I find on-stop orders fit my plan better, because it is about price levels being reached by the market, not what price I can get once I have determined I should be in or out of the market. Markets can move fast and can get away from you while you are chasing that price.
Trailing stops can be useful in steadily trending markets, much like you find in some bluechip shares, where volatility is lower, but again, it depends on your trading strategy.
Hope this helps (and is not too long-winded)
wrcmad.
Thanks WRC,
I apologize for mistaking the terms. I understand the philosophy/strategy but I have mistaken the terms.
I have mistaken ["contingency Stop and Limit" which should have read "stop-loss and exit point in pips"] VS [order types: Stop order and Limit order]
When i asked: "would you limit this order?", I meant to say would you put an exit point? which you have answered as yes (ALWAYS)....yep got it!
On-Stop Order VS Limit Orders-Bounce:
On-Stop Order: you are going with momentum when the resistance/support has been breached. If your buffered entry point is not triggered, then you do not loose money.
Limit Orders-Bounce: There is always a possibility that resistance/support will be breached and does not bounce back. If that's the case one loose the trade. Before any "limit order - bounce" strategy is placed, one needs to make sure it is a very strong resistance/support level such as the current $26 in silver.
From the above it seems that On-Stop trade has a higher probability of winning but requires more patience.
Wrcmad : "not too long-winded"....not at all, in fact it is very precise. The more the merrier. I actually study each one of your post.
I understand it depends on individual plans, but what is your acceptable risk ratio?
SS
I apologize for mistaking the terms. I understand the philosophy/strategy but I have mistaken the terms.
I have mistaken ["contingency Stop and Limit" which should have read "stop-loss and exit point in pips"] VS [order types: Stop order and Limit order]
When i asked: "would you limit this order?", I meant to say would you put an exit point? which you have answered as yes (ALWAYS)....yep got it!
On-Stop Order VS Limit Orders-Bounce:
On-Stop Order: you are going with momentum when the resistance/support has been breached. If your buffered entry point is not triggered, then you do not loose money.
Limit Orders-Bounce: There is always a possibility that resistance/support will be breached and does not bounce back. If that's the case one loose the trade. Before any "limit order - bounce" strategy is placed, one needs to make sure it is a very strong resistance/support level such as the current $26 in silver.
From the above it seems that On-Stop trade has a higher probability of winning but requires more patience.
Wrcmad : "not too long-winded"....not at all, in fact it is very precise. The more the merrier. I actually study each one of your post.
I understand it depends on individual plans, but what is your acceptable risk ratio?
SS
This is true to some extent, but often bounce trades are used for trading trend channels, such as the one in silver late last year depicted below:SS said:
You can also use stop-loss orders for less aggressive bounce trades by entering as price moves away from the resistance line. This lowers the probability of price breaching and causing a loss, as pictured below:
SS said:
I use risk:reward ratio of 1:3 or better. What you use will depend on your systems' demonstrated positive expectancy, which can be calculated.
Regards
wrcmad
Wrcmad,
I loss my first trade
Here is the plan: On-Stop Strategy (Shorting) (trend is coming down following Cartel Smack Down)
Current Point When Ticket Was Made : ~ 3340
Entry Point : 3254
Exit Point : 3170 (86 pip)
Stop-Loss: 3282 (28 pip)
Risk Ratio : 1:3
Hindsight:
1. Maybe 3264 was not a very good support as it only has touched once???? where in you previous example/trade the resistance was touched 5x.
2. The trend is still going down on a daily chart. maybe my stop-loss was too tight. But if I loosen it, my risk ratio will be less than 1:3
3. Then again maybe 3160 is not a good support as it has only been touched once. The support maybe lower???? which allows me to loosen up my stop-loss.
Can you kindly critique my move? Please don't sugar coat it. I must admit, I only learn by making mistake and I am having fun here.
By the way I take FULL RESPONSIBILITY in EVERYTHING I DO!
If it is OK, can you tell me what you think?
Many thanks
SS
I loss my first trade
Here is the plan: On-Stop Strategy (Shorting) (trend is coming down following Cartel Smack Down)
Current Point When Ticket Was Made : ~ 3340
Entry Point : 3254
Exit Point : 3170 (86 pip)
Stop-Loss: 3282 (28 pip)
Risk Ratio : 1:3
Hindsight:
1. Maybe 3264 was not a very good support as it only has touched once???? where in you previous example/trade the resistance was touched 5x.
2. The trend is still going down on a daily chart. maybe my stop-loss was too tight. But if I loosen it, my risk ratio will be less than 1:3
3. Then again maybe 3160 is not a good support as it has only been touched once. The support maybe lower???? which allows me to loosen up my stop-loss.
Can you kindly critique my move? Please don't sugar coat it. I must admit, I only learn by making mistake and I am having fun here.
By the way I take FULL RESPONSIBILITY in EVERYTHING I DO!
If it is OK, can you tell me what you think?
Many thanks
SS
Im still trying to find my feet but all good with demo.
At the moment im just waiting on negative news to go short on whatever i think will be affected. Portugal, Spain, Aust 200 indices... silver etc.
At the moment when i sell to go short i only set stop, not limit.. Basically keep an eye on it until profit is up an amount im happy with then complete order with a buy.
Have done well doing this but have lost when ive gone with gut feel thinking i can predict very short term moves.. It just doesnt happen. But negative news is a guarantee to work.
At the moment lost 7 of the original 20 but have been experimenting quite a bit
At the moment im just waiting on negative news to go short on whatever i think will be affected. Portugal, Spain, Aust 200 indices... silver etc.
At the moment when i sell to go short i only set stop, not limit.. Basically keep an eye on it until profit is up an amount im happy with then complete order with a buy.
Have done well doing this but have lost when ive gone with gut feel thinking i can predict very short term moves.. It just doesnt happen. But negative news is a guarantee to work.
At the moment lost 7 of the original 20 but have been experimenting quite a bit