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mika
131 posts
msg #30152
Ignore mika
12/6/2003 1:21:56 AM


What percentage of your total portfolio capital do you risk per trade?




mika
131 posts
msg #30153
Ignore mika
12/6/2003 1:30:29 AM

Followup question:

I'd like to set up a money management system for myself..
In my trading experience 1 in 4 trades will be unsuccessful. Unsuccessful trades lose 4%. Successful trades win 8%. How do I divi my portfolio to minimize/maximize risk/reward?


TheRumpledOne
6,358 posts
msg #30159
Ignore TheRumpledOne
12/6/2003 4:38:48 PM

Put all of your eggs into one basket and keep your eye on that basket.


risjr
102 posts
msg #30176
Ignore risjr
12/7/2003 9:21:48 AM

Here's my money management system Mika(Still developing)

CCI 10

RSI 12

SLOW STOCHS 5,3

EMA'S 9/18

MACD'S (FAST/SLOW) OF 8,17,9

Wait for the Stochs xover and up to begin. A few white candles are nice, but not necessary, cause many picks will Gap Up for no reason.

I use the daily slow stochs to exit and enter. It can vary anywhere from 5-20% in a day, 2, 3 at the most.

A good example is ULTE! In and out twice. Some people call it a rolling stock. I use the term "Rythym"

I look for the daily stochs and hourly MACD to be in unison.!

But any time you can get 10% or more with stock, like TMAR. Ring the cash register! I made alot of profit in one day. But in continued to go up the next day.

Such is life! I use the daily stoch to enter and exit, and sometimes the hourly macd(fast/slow) to bail as well

Hopefully this helps

Good Tradin

RON




risjr
102 posts
msg #30177
Ignore risjr
12/7/2003 9:24:14 AM

Mika

Forgot to mention

CCI must have spiked up within the last day or so. If it's going down I DON'T BUY!! This eliminates alow of false starts

Take Care

RON


EWZuber
1,373 posts
msg #30181
Ignore EWZuber
12/7/2003 3:07:30 PM

risjr
Interesting. TMAR came up on a new screen I've been playing with for a few days. It looks for a new volume high and a cross of the stochastic fast line above the slow line on Daily charts.
It looked like short term capitulation and turned out to be.

Show stocks where volume reached a new 124 day high and Slow Stochastics(5,3) Fast %K crossed above Slow Stochastics Slow %D within the past 2 days and Average Volume(30) is above 100,000 and close is between .4 and 15


EWZuber
1,373 posts
msg #30182
Ignore EWZuber
12/7/2003 3:40:13 PM

mika
There is no way to keep a close enough eye on a basket to prevent a catastrophic aftermarket decline.
When LOOK came out with aftermarket news, trading was halted. When it re-opened a while later the best bid was way, way down.
It would have been more devistating had all my money been in that one. There was too much as it was.
The risk of holding overnight is uncontrollable, with the exception of buying puts ( downside insurance ) against a long position.
How much capitol to put in each position will depend to a great degree on how much capitol there is to work with.
For someone like me where capitol is severely limited I usually will buy at least one higher quality stock which will take at least half of my capitol, then buy 1 or 2 low priced stocks.
Right now I'm holding 3 low priced stocks.
If you have say $100K then it becomes so much easier to diversify and spread out the risk. In that case one could easily hold 8~10 positions in quality stocks.
You could afford to buy the growth leaders in several sectors. These are stocks that have a record of consistent growth and continue to appreciate while the stocks of companies that are not not fast growing and profitable, decline as the Indexes move into longer term distribution. Positions in the sector leaders, I believe, can help mitigate the overnight risk.
Your system of trade management differs from mine considerably and I think I have expressed before that I don't like the idea of cutting off a winning position at an arbitrarily chosen percentage. To me it makes no sense to intentionally limit your potential gains in a position that is working.
A loss of 4% is not bad but I think that number can be cut in half with a lot of trades with well chosen entries. It will depend to a degree on how actively one is willing to or is able to trade.
JMHO




EWZuber
1,373 posts
msg #30183
Ignore EWZuber
12/7/2003 4:09:01 PM

risjr
Looking at ULTE, the longer term charts are positioned where the indicators would support a longer term move higher.
Quarterly chart stochastics have converged.
Monthly chart stochastics are converging.
Weekly is trying to rise but is foundering right now because the daily chart stochastics are in distribution.
The 25 DMA is flattening and is usable as support now. Daily stochastics are in distribution but the price is consolidating, a bullish indication.
The stock is becomming long term oversold.
ULTE has come up against resistance at the resistance trendline that began on 9/8. A break of that trendline while not overbought could be a good entry.
One very big thing that is not good is that the company earnings declined from the 2nd quarter of 2001 to the 1st quarter of 2003. Thats 8 consequtive quarters of declining earnings. Then the decreasing earnings turned into losses in the 2nd quarter of 2003. Since then losses have increased dramatically. This is a very bad development in the fundamentals and the opposite of what drives stocks higher.
This qtr. ULTE lost ( -$0.43 EPS ) where as the same qtr. last year they had a profit of +$0.12 EPS. What is that about ( -450% ).
I suspect that a good quarter or two of improved earnings would produce a dramatic rise in price. Without it, it seems the stock could have an oversold bounce but probably would not be sustainable. JMHO



risjr
102 posts
msg #30187
Ignore risjr
12/7/2003 4:53:59 PM

When I look at a stock, I just glance at the fundamentals, and that's about it, cause it helps take the emotion out of things!

My main filter I picked up from coveredcalls.com, which is a basic bollinger band philosophy, if the price touches the lower bollinger band, and the rsi(14) is below 30, you normally get a bounce

I adjust the volume acchordingly, and usually get about 3-7 picks a days a day. All I need is about 3-5, the fewer the better, since I like to be very selective in my picks.

That's where the stochastics comes in! If the cci(10) spikes up, in unison with the slow stochs xover, you usually get a 10% pop, or with ULTE, 16%. This is also confirmed by the macd(fast over slow xover as well)

I place my buy orders at the beginning of the day, check on it about 2-3 times before lunch, and check out the charts at lunch.

I sometimes use a 40/3 stochs on the hourly chart to try and stay with the multi-day runners. But I'm still playing with that. The cci(10) spike, with a slow stochs confirm and compliment each other well

That's the frustration alot of the muddy folks, trying to pick the bottom, without getting stopped out. But there looking for more beaten down stocks, 3days or more! I don't have that in my filter, since I'm more patient, can wait, for the bottoms to show themselves in the slow stochs

Hopefully, this helps

Good Tradin

Ron


risjr
102 posts
msg #30188
Ignore risjr
12/7/2003 5:05:41 PM

Another good example is KRY, CCI(10) spike, with a nice, smooth, upturned slow stochs! A really beautiful chart.

Just bought a thousand!

Should have a good run for a day or 2

Ron


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