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  • Trading NAB | Online Stockmarket Trading Update
    rally to continue or simply closing out the position Recent Trade National Bank NAB A recent trade taken by our clients was to buy a NAB Calendar Call Spread two weeks prior to the November options expiry National Australia Bank NAB shares had suffered a 15 slide since its recent peak when it was trading at over 27 00 The share price had fallen to around 23 00 and was trying to establish support around this level The 22 50 support level has held for the past 18 months and this was a trade for a bounce from these levels While the chart looked oversold there was a chance NAB would just trade sideways around the 23 50 level so the trade was entered to profit from a sideways and bullish move on NAB while helping to reduce the risk To profit from this view we opened a NAB Calendar Call Spread The objective of this trade is for NAB to ideally be below the sold call strike at expiry So instead of trying to profit from a sharp bounce from NAB we were looking to profit from a steady recovery of NAB near term To put it more simply we felt NAB would hold around 23 51 before November options expiry 29 Nov 12 and trade higher from then on The maximum possible profit on this trade would be achieved if NAB held just below the short strike 23 51 level at November options expiry The maximum risk on the trade was the initial debit this would occur if NAB is above 23 51 at November options expiry or significantly below that level CHART 1 National Bank NAB Calendar Call Spread Trade Details In this trade we entered the position when NAB was trading around 23 84 two weeks prior to expiry The trade was established by Buying to Open NAB 2350 DEC12 Call for 58c and simultaneously Selling to Open the NAB 2351 DEC12 Call for 36c The total cost was limited to the initial 23 cents premium paid Payoff Diagram at Expiry CHART 2 Payoff Diagram at Expiry for the NAB Calendar 2351 NOV12 DEC12 CALL Spread Note if your view changed during the trade you could have bought back the short call or closed the trade prior to expiry Risks and Profit Potential The Calender Call Spread profits when the stock price trades sideways or finishes below the short strike price The maximum risk is limited to the initial premium paid for the option spread The maximum profit is also limited In summary the Calendar Call Spread strategy offers limited upside profit while the maximum risk is limited to the Net Debit Paid These risk rewards are shown in the Payoff diagram above Note the Calendar Call strategy can be used in order to gain an exposure to National Bank while limiting the outlay and risk to the premium paid Result NAB shares traded sideways up to expiry and we were of the view that they

    Original URL path: http://blog.traderdealer.com.au/tag/trading-nab/ (2013-02-02)
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  • The Top Five Fundamental Indicators | Online Stockmarket Trading Update
    of Market Environments This entry was posted on Friday December 7th 2012 at 10 08 am and is filed under Market Analyser 7 Trading Software Trading Strategies You can follow any responses to this entry through the RSS 2 0 feed You can leave a response or trackback from your own site Leave a Reply Click here to cancel reply Name required Mail will not be published required Website RSS Feed Twitter Follow Us Sign up to our free weekly e newsletter Feel inspired Start trading Recent Post Markets Cap Best January Performance for Over a Decade Weekly Market Wrap The Covered Call Collar Part 3 1 of Options Trading for All Types of Market Environments Stock Market Analysis Markets Cap Best January for Over a Decade Stock Market Analysis Traders Take Profits Stock Market Analysis Markets Reach Bull Market Territory Stock Market Analysis US Markets Ease Near All Time Highs Markets Higher As Investors Play Catch Up Weekly Market Wrap Investing in 2013 continued Part 9 Stock Trading Tips for All Types of Market Environments Stock Market Analysis Markets Higher As Investors Play Catchup Stock Market Analysis Markets Cautious Ahead Of Chinese Data Archives February 2013 January 2013 December 2012 November 2012 October 2012 September 2012 August 2012 July 2012 June 2012 May 2012 April 2012 March 2012 February 2012 January 2012 December 2011 November 2011 October 2011 September 2011 August 2011 July 2011 June 2011 May 2011 April 2011 March 2011 February 2011 January 2011 December 2010 November 2010 October 2010 September 2010 August 2010 July 2010 June 2010 May 2010 April 2010 March 2010 February 2010 January 2010 December 2009 November 2009 October 2009 September 2009 August 2009 July 2009 June 2009 May 2009 April 2009 March 2009 February 2009 January 2009 December 2008 November 2008 October

    Original URL path: http://blog.traderdealer.com.au/2012/12/07/webinar-playback-the-top-five-fundamental-indicators/ (2013-02-02)
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  • Company Fundamentals | Online Stockmarket Trading Update
    Post Markets Cap Best January Performance for Over a Decade Weekly Market Wrap The Covered Call Collar Part 3 1 of Options Trading for All Types of Market Environments Stock Market Analysis Markets Cap Best January for Over a Decade Stock Market Analysis Traders Take Profits Stock Market Analysis Markets Reach Bull Market Territory Stock Market Analysis US Markets Ease Near All Time Highs Markets Higher As Investors Play Catch Up Weekly Market Wrap Investing in 2013 continued Part 9 Stock Trading Tips for All Types of Market Environments Stock Market Analysis Markets Higher As Investors Play Catchup Stock Market Analysis Markets Cautious Ahead Of Chinese Data Archives February 2013 January 2013 December 2012 November 2012 October 2012 September 2012 August 2012 July 2012 June 2012 May 2012 April 2012 March 2012 February 2012 January 2012 December 2011 November 2011 October 2011 September 2011 August 2011 July 2011 June 2011 May 2011 April 2011 March 2011 February 2011 January 2011 December 2010 November 2010 October 2010 September 2010 August 2010 July 2010 June 2010 May 2010 April 2010 March 2010 February 2010 January 2010 December 2009 November 2009 October 2009 September 2009 August 2009 July 2009 June 2009 May 2009

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  • Market Analyser | Online Stockmarket Trading Update
    its announcement of a profit drop of 40 You can right click on any share in the Market Map and select a D2MX Chart to take a closer look at any company In this way you can quickly identify a few companies to take a closer look at for potential trading opportunities The information is updated live throughout the trading day and if you are watching the market during the day you can identify shares that continue to move strongly as the day goes on This may provide short term trading opportunities for those that choose to jump on board and trade with the momentum of the share The Market Map is a great visual tool for quickly sorting out potential trading opportunities by identifying shares that are moving against the trend of the market or sector These shares can be identified by the colour and size of the square on the chart allowing you to quickly move in to your more detailed analysis Try it today and see what opportunities you can identify By Jeff Cartridge Education Manager Tags asx companies d2mx ma7 Market Analyser market map sector analysis Trading Software Trading Strategies Posted in Market Analyser 7 Trading Software No Comments New Webinars Announced Friday July 20th 2012 Our next series of webinars has just been launched This program is aimed at giving you new ideas for your trading and insights into how to use your Market Analyser 7 software effectively Get the full program here What s coming up A Top Down Approach to Trading August 2 With Top Down trading you start out by looking at the bigger picture of what s currently happening in world markets From here drill down into the strongest sectors and within those sectors identify the strongest companies More A Bottom Up Approach to Trading September 6 In this webinar Jeff will show you a way to quickly zero in on companies that may present good trading opportunities and avoid getting lost in an overload of reports and information More Intro to Technical Analysis October 4 So many successful traders rely on technical analysis Find out how the chart indicators and tools in The Bourse 7 can improve your trading More The Top Five Technical Indicators November 1 In this free webinar Jeff Cartridge will share his five favourite technical indicators and how to use them as the basis of a trading strategy More We look forward to seeing you online Tags ma 7 Market Analyser technical analysis technical indicators Trading Software Trading Strategies Posted in Market Analyser 7 Trading Strategies No Comments Simple Trend Finder Scanning Method Part 1 Stock Trading Tips for All Types of Market Environments Friday July 20th 2012 In the past year economists have been complaining that the RBA has been setting monetary policy for the states that have been racing ahead because of their exposure to the mining sector It is only in the last couple of months that we have seen interest rates pull back in deference to the rest of the Australian economy Retailers builders and consumer related companies have been doing it tough in the past couple of years Our new IRESS based trading platforms including Market Analyser 7 and The Bourse 7 give clients access to our proprietary D2MX Trade Tool set Today we re going to use these tools to identify stocks that are challenged in this economic environment and those that are outperforming Get a free software trial here Figure 1 D2MX Trade Tools Menu Scanning for Outperforming Stocks First we look for stocks that are in a rising trend and are making new highs Using the Analyser Wizard tool we scan for stocks with Rising medium term trends with the 40 day moving average above the 150 day moving average Plus rising short term trends with the 13 day moving average above the 40 day moving average And to ensure that there is short term momentum we make sure that the stock price has made a new high in the last 10 days Figure 2 The D2MX Analyser Wizard Uptrending Stocks Scan Scanning for Underperforming Stocks Here we look for stocks that are in a falling trend and are making new lows Using the Analyser Wizard we scan for stocks with Falling medium term trends with the 40 day moving average below the 150 day moving average Plus falling short term trends with the 13 day moving average below the 40 day moving average And to ensure that there is short term momentum we make sure that the stock price has made a new low in the last 10 days Figure 3 The D2MX Analyser Wizard Downtrending Stocks Scan The Results One of the recurring criticisms about this market is the lack of liquidity and trading volumes which are as little as 50 of what they were just over a year ago With this in mind we used the ASX 100 for our list of stocks that we are interested in trading The Uptrending Stocks scan produced a list of 22 potential trading candidates that are in an uptrend in the medium and shorter term and have recently made new highs see the list below An interesting aside is that this list has a high proportion of companies that are delivering high yields which says something about of the state of investors psyche at the moment Figure 4 Results of Uptrending Stocks scan run on 18 July 2012 The Downtrending Stocks scan produced a list of 17 potential trading candidates that are in a downtrend in the medium and shorter term and have recently made new lows You will note that this list is dominated by stocks from the mining and energy sectors which have clearly underperformed in the Aussie market in the run up since last October Figure 5 Results of Downtrending Stocks scan run on 18 July 2012 Sample Trades To give you an idea about the types of stocks the scans highlighted I have provided a couple of sample charts for CSL and Macquarie Bank below Chart CSL CSL in a clear uptrend and moving higher Chart Macquarie Bank MQG in a clear downtrend The Trade There is no doubt that this is a challenging market for investors but using some simple tools that D2MX can provide through its IRESS Trader platform you can quickly highlight stocks that are suitable for your investment outlook This analysis can be done on a regular basis and should take you no more than five minutes If you want to try a Long Short strategy you can do that too through the use of Mini Warrants which have been discussed in earlier articles by going Long the outperforming stock s while Shorting the underperforming stock s Refer to Warrant Trading for All Types of Market Environments Series Part 1 Shorting With Limited Risk Using MINIs Part 2 Boosting Dividend Yield Using Warrants Utilise the D2MX features in the IRESS Trader platform to select your trades according to your market view You will save time and potentially increase your returns by trading with the trend Contact me at D2MX Trading on 1300 610 024 and I can help you trade using a number of strategies that will give you the tools to navigate this market and help you boost your returns on investment Michael Hevern Investment Adviser D2MX Trading This report was prepared by Michael Hevern It represents the views and opinions of the author It is not intended for use by any third party without the approval of Michael Hevern While this report is based on information from sources which are considered reliable its accuracy and completeness cannot be guaranteed Any opinions expressed reflect my judgment at this date and are subject to change Contracting Hevern Pty Ltd is a Corporate Authorised Representative No 408868 of D2MX Pty Limited ABN 98 113 959 596 AFSL No 297950 D2MX and Michael Hevern has been appointed as an Authorised Representative of Contracting Hevern Pty Ltd Opinions conclusions and other information expressed in this report are not given or endorsed by D2MX unless otherwise indicated The information contained in this Report is General Advice only as the information or advice given does not take into account your particular objectives financial situation or needs Disclaimer Using leverage to invest can be a two edged sword as it can magnify your returns when the stock price rises but will in turn magnify the losses if the trade does not perform as expected For Buy and Sell recommendations on ASX listed companies register for a free trial of MDS Financial Research The D2MX Financial Advisory Services offers general advice on trading options to generate consistent steady income on your investment portfolio Call 1300 610 024 for further information Tags asx100 d2mx d2mx trade tools down trend Iress Market Analyser market scanning uptrend Posted in Trading Software Trading Strategies No Comments Placing Orders with Trader Dealer Friday July 13th 2012 It s possible to link up the new Bourse 7 and Market Analyser 7 trading platforms to your Trader Dealer accounts allowing you to execute orders directly from the platform Linking your trading account to your software platform can save you money via rebates based on the number of trades you complete If you have a Trader Dealer account and it s not linked to your trading platform then contact Trader Dealer on 1300 853 856 to get the account linked If you don t have an account you can quickly and easily open one with Trader Dealer as well Once your account is linked you can then place and monitor orders directly from your trading platform The Orders menu contains a number of choices allowing you to place and monitor your orders and your open positions You can also right click on any company name or code to buy or sell shares You can place a wide variety of orders using the Trader Dealer interface including Market Limit and Contingent orders There are also advanced features available allowing you to tailor when an order is executed and how it is executed Orders can be good until cancelled good until a set date Fill or Kill and Fill and Kill Today we ll take a look at these different types of orders and how to implement them Limit Order A limit order allows you to enter the highest price you will pay to buy a share and the lowest price you will sell a share for For example you may be prepared to buy CBA at up to 5360 but not pay more than this To place this order right click on CBA and click Create Buy Order The Security Code is already filled in if you chose to Create Buy Order from the Orders menu you will have to type in the share code The last traded price is visible and all you have to do is enter the volume and the price You can type in the volume as number of shares say 500 or you can type in a target value in dollar terms say 10 000 and the quantity will be calculated for you Enter the price you are willing to pay up to in our example 5360 and click Buy Check your order details and click Ok to place the order Your order will now be executed if CBA trades at 5360 Market Order To place a market order enter the quantity as before either in number of shares or a dollar amount using the Target Value feature Then click on the Advanced button This will give you a range of different choices in how your order is placed For a market order select Best Buy and click Buy Check your order details are correct and click Ok Your order will be executed at the best price currently available in the market A best order is priority queued at the current best bid or ask on the same side of the market As soon as a best order is entered into the market the order is converted to a limit order at the same price as the best bid or ask and will appear in the market as a limit order For example if the market is 17 bid 18 offered the a buy order entered at Best places the order at 17 behind any orders already queued at that price Advanced Orders You may want to use some of the other order types that are available in the Advanced section The order Centre Point Limit will place your order into the market between the Bid and Ask price If the market is trading at Bid 5350 and Ask 5360 you can use Centre Pont Limit to place your order at 5355 The most you will pay for the share is 5355 If you use Centre Point Market again your order will be placed at 5355 however you may pay more than this price when the order executes A Market to Limit order allows you to buy shares at the best price available but with an upper limit on what you are prepared to pay This can be useful if you are attempting to execute a large order without driving the price higher You can use the Order Type to determine how long the order is valid for and how it is to be executed End of Day means the order will be cancelled at the end of the trading day Good till Cancelled means the order remains valid until you cancel it You can also set an order to be valid until a set date and or time which allows you to program in a custom end time A Fill or Kill order specifies that the whole order is to be filled or nothing at all This order is useful for larger traders entering a position to ensure an order does not move the market If there are sufficient sellers at the price you are willing to pay then the whole order will be executed If there are not enough sellers then the order is cancelled Fill and Kill is similar but the quantity that is available will be executed and the rest of the order cancelled If you were trying to buy 10 000 shares at 5360 and there were only 6 000 shares on offer at this price using a Fill or Kill order it would be cancelled but a Fill and Kill order would buy 6000 shares and cancel the rest Sell Orders The process for placing sell orders is the same as placing buy orders except the button will state Sell instead of Buy Contingent Orders Contingent orders allow your order to be executed when a set criteria is met Until the criteria are met the order is not an active order and will not be visible in the market Essentially these can be considered to be IF orders if this happens then do that A contingent order is used to place a stop loss order Right click on any share and click Create Contingent Order Set your order criteria including the appropriate price Last Bid or Ask the direction Less Greater and the Trigger Price You can also set start and end times for when the order is valid An example of the trigger criteria would be If CBA reaches a Last price Less than or equal to 5400 Once you have set the trigger criteria you can then set the Action you want taken Select the action Buy or Sell type in the volume and choose the code of the share you want to trade note this does not have to be the share you set the contingent criteria for but normally would be the same Enter the Order Price and click Ok Check your order is correct and click Ok The Advanced tab allows you to control how the order is executed once the criteria have been met as well as notification by email if the order triggers Ticking the Create OCO Order allows you to set a second contingent order that will only become valid if the first order is executed If CBA was to reach a price greater than 5600 you could buy CBA and then using the OCO functionality place a stop loss order on CBA to sell if it falls below 5400 Conclusion There is a wide range of order functionality available when using Trader Dealer in conjunction with the new Market Analyser 7 and Bourse 7 platforms Give Trader Dealer a call today on 1300 853 856 to find out why they won the Best Broker for Heavy Users Gold Medal from Your Money Magazine Jeff Cartridge Education Manager Tags bourse contingent orders limit orders Market Analyser market orders software training stock market systems Trading Software Posted in Market Analyser 7 Trading Software No Comments Market Analyser 7 Update v1 2 14 86 Monday July 2nd 2012 Today we ve released a new update to the Market Analyser software which includes a number of important improvements and fixes and sets the platform up for the addition of a new User Settings window to be activated later this week For the last couple of weeks our development team has focussed on fixing user reported bugs rather than adding new features When this process is done we ll have a better more robust platform to expand upon Stay tuned for more news on that in the next few days In today s release A new Settings Window has been included which we ll turn on once all members have upgraded This feature includes the ability to change how many years of Chart Data to load The program s install directory has been moved from the Program Files folder to the user s Local Folder area so that users without Local Administrator rights can more easily run and update the software Fixed a bug where the program wouldn t start after

    Original URL path: http://blog.traderdealer.com.au/tag/market-analyser/ (2013-02-02)
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  • Webinar | Online Stockmarket Trading Update
    a screen layout across multiple monitors If you have multiple monitors set up on your computer The Bourse desktop can then be stretched across the two screens To Create a New View Layout An easy way is to be in Classical MDI mode You can do this from the Window menu on on The Bourse You can also select one of the pre formatted pane mode layouts to start off with Start by selecting a pane mode layout Select the Window menu and select a view with 2 vertical panes indicated by this icon The screen will look like this Click on the button with the two right arrows we will call this the Menu button This will drop down a menu From here select My Watch Lists Repeat the same on the other pane and select Chart and your screen will look like this Now size the windows to suit Place the mouse pointer on the division between the two panes and move the division to the left to shrink the size of the Watch List and increase the size of the Chart Your final screen will look like this It is now recommended that you change to Classical MDI mode This will restore the screen layout into normal Windows mode and allow you to better control the window position Do this by selecting the Window menu and clicking on Classical MDI You will notice that the Menu button has been replaced To make navigating through ASX codes easier make sure that you have SYNC ON in the status bar at the bottom of The Bourse screen To switch between sync modes just double click on the SYNC status With sync on you can select a code on the watch list and the chart will also change Most importantly you now need to save your layout Click on the File menu and select Save Enter a name for your layout click OK and the layout will be saved To reload your saved layouts use the File menu and select the Open menu item Alternatively if they have been opened recently they will be pinned to the bottom of the File menu You can have multiple charts multiple time frames or a range of indicators set up in your View Layout Take the time to discover how easy The Bourse is to use and how monitoring shares is a simple process of clicking on the next share in your watchlist For video tutorials on how to get the most out of your Bourse software visit the Bourse Data website By Jeff Cartridge Education Manager Tags Jeff Cartridge layout Stock Market Analysis the bourse trading watchlist webinar Posted in Trader Dealer News Trading Software No Comments RSS Feed Twitter Follow Us Sign up to our free weekly e newsletter Feel inspired Start trading Recent Post Markets Cap Best January Performance for Over a Decade Weekly Market Wrap The Covered Call Collar Part 3 1 of Options Trading for All Types of

    Original URL path: http://blog.traderdealer.com.au/tag/webinar/ (2013-02-02)
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  • The Power of Position Sizing in Trading Shares | Online Stockmarket Trading Update
    Fixed dollar position size A fixed dollar amount can be allocated to a trade ensuring consistent position sizing across a number of different shares This means you would trade say 5000 10 000 or 20 000 on each position and trade as many contracts as required to get close to a position size of your nominated dollar amount This is a far better approach than a fixed unit method because it does take into account the variation in share price If the price is low more shares are traded while a higher price means that fewer shares are traded As with the fixed unit approach this is a static position sizing model and you will need to implement a clear cut method that identifies when it s best to move from say 5000 to 6000 or 10 000 to 11 000 parcel sizes as well as what increments you ll move up in Fixed fraction position size When using fixed fraction position sizing you divide your capital into 10 equal parcels and place the same dollar amount onto each trade The fixed fraction approach is widely used when trading unleveraged instruments such as shares This approach allows a trader to spread the risk of any individual trade and ensures there is capital available for other trade signals as the signals are generated This is a dynamic approach to position sizing As your account balance increases your position size increases and as your account balance decreases your position size decreases It becomes much more difficult to employ this method when trading with leverage as margin requirements do not require you to allocate all of your capital to a trade It is possible to over leverage If you were to allocate say 10 per cent of your capital 5000 as initial margin on a CFD trade or an option trade you have unwittingly taken on a huge amount of risk Fixed risk position size The fixed risk model allocates a set amount to place at risk on a trade If the trade hits your stop loss you will lose the set amount As an example an entry at 50 with an exit at 49 50 on Commonwealth Bank CBA means you are risking 50 cents per share times the number of shares If you bought 1000 shares your risk is 500 To apply the fixed risk model choose the number of shares to trade that will result in the same risk for each trade The fixed risk model works well in leveraged instruments such as currency CFDs or futures where you calculate the risk you are prepared to take on any individual trade It also works very well when trading shares In this way any losing trade in any market will lose close to the same amount If the risk is too high then you simply do not enter the trade A fixed risk model can be applied using a set dollar amount or a percentage of capital The second approach is

    Original URL path: http://blog.traderdealer.com.au/2012/11/30/the-power-of-position-sizing/ (2013-02-02)
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  • Position Sizing | Online Stockmarket Trading Update
    fixed fraction this has the effect of increasing the size of your wins when winning and it will keep the size of your losses to your set percentage when losing A string of losing trades will reduce your account balance and as a result of this will reduce your position size The fixed risk position model is the preferred approach to utilise when trading as it incorporates many of the key elements of successful trading Position sizing is critical to your long term trading success and it is important that you gain a good understanding of the different approaches you can use I wish you all successful trading Jeff Cartridge Education Manager Tags position sizing risk in trading stop loss trading shares Trading Strategies Posted in Trading Strategies No Comments Core Trading Skills Friday January 20th 2012 There is a series of core trading skills that you will be required to develop to trade successfully Mastering these core competencies is essential to mastering trading The core skills start out with analysis first and foremost Following this the position size is determined in conjunction with your entry criteria and your stop placement By religiously placing a stop on every position you cut your losses but still have to work out when to take profits Scaling in can be used by intermediate traders to reduce the risk when entering a trade and scaling out can be used to lock in profits as they occur And then one final skill to master is re entry after you have been stopped out or taken profits on a position It does not matter whether you trade shares currency futures commodities or CFDs the core skills required are all the same Analysis Before you place your first trade you must decide how you will develop a trading edge Your trading edge is your advantage that you intend to exploit for profit and is critical to your success Your edge will come from a thorough analysis of the market you intend to trade It is not essential for you to do all the research yourself as you can utilise analysis from a third party but it is essential that you find an edge before you enter the market Methods of analysis can include a wide range of variables including economic factors technical indicators seasonal influences fundamental criteria relative performance news releases special events and valuation measures It does not matter which school of analysis you subscribe to as long as the method of analysis provides you with an edge Position Sizing Sound position sizing methods are critical to your trading success It is essential to size your positions to control losses No matter how good your analysis is YOU WILL BE WRONG Accepting this is important to survival when trading The market you are trading is made up of thousands of participants all making independent decisions No analysis available can take into account all the possible outcomes of these individual decisions so no analysis will be right every time If you have placed too large a position on the trade then you can blow up in spectacular fashion as the result of a strong move or gap against your position Low Risk Entry Low risk entry points improve your chance of success when trading A low risk entry point means you will lose very little if the trade does not go as planned and by keeping your losses small this can improve your risk reward ratio and your overall profitability There are a variety of methods for determining a low risk entry point however with all of these entries you will quickly know if your analysis was wrong Low risk entry points not only make trading easier they are more profitable overall because when a trade does not work out your loss is as small as it can reasonably be Cutting Losses Before you enter a position you should know where you are going to get out This is critical to keeping your trading account intact When you enter a trade there are only three things that can occur Your analysis was correct and the trade moves into profit your analysis was wrong and the trade moves into a loss or you get lucky and it moves strongly in your favour We prefer the third outcome and the purpose of our analysis is to identify opportunities where we can get lucky but more importantly we want to avoid the situation where we get caught with large losses Develop the habit of always placing a stop loss order into the market when you enter a trade to ensure that you control your losses on any trade Scaling In Have you ever entered a trade and realised almost immediately that you did the wrong thing Most traders have By entering a part position you can test the waters and if the trade moves as you expect then you can add to the position This is known as scaling in Most traders enter a position in one full parcel and exit the same way However another tool you could use is adding to a winning position maximising the returns from a good trade Starting with a position less than your maximum you can add to the position at preset intervals Scaling in is one of the most under used techniques by traders Spend as much time developing your position sizing model as you spend on looking for good entry techniques Holding The world famous speculator from the early 1900 s Jessie Livermore made the following comment in The Reminiscences of a Stock Operator written by Edwin LeFevre And right here let me say one thing After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this It never was my thinking that made the big money for me It always was my sitting Got that My sitting tight Jessie Livermore commented that most money in the market is made from

    Original URL path: http://blog.traderdealer.com.au/tag/position-sizing/ (2013-02-02)
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  • Risk In Trading | Online Stockmarket Trading Update
    balance and as a result of this will reduce your position size The fixed risk position model is the preferred approach to utilise when trading as it incorporates many of the key elements of successful trading Position sizing is critical to your long term trading success and it is important that you gain a good understanding of the different approaches you can use I wish you all successful trading Jeff Cartridge Education Manager Tags position sizing risk in trading stop loss trading shares Trading Strategies Posted in Trading Strategies No Comments Measuring Your Trading Performance Part 5 Stock Trading Tips for All Types of Market Environments Friday September 28th 2012 Trading is a business and investors must treat it that way to be successful in the markets One of the keys to running a business is being able to measure performance and profitability As a trader you know that the only thing you can define before entering a trade is the amount of risk you re prepared to accept How much money are you willing to lose per unit of your investment if you are wrong about the direction of the trade Note there will be times when your loss is greater than your initial risk for example when the market gaps on open Systematic traders will risk a predefined amount on each trade and therefore it is possible to rate the performance of your trading by comparing your profits losses with the amount initially risked in the trade Initial Risk R A key principle for both trading and investing success is to always have an exit point before you enter a position a point where you know that you are wrong about the trade Van Tharp in his best selling book Trade Your Way to Financial Freedom says that trading without a pre determined exit point is like driving across town and not stopping for red lights you might get away with it a few times but sooner or later something nasty will happen Van Tharp has championed the use of initial risk and R multiples to measure trade performance The exit point that you have when you enter into a position is the whole basis for determining your risk or R and the R multiples i e reward risk ratios of your profits and losses can then be measured Stops Determine Risk R A stop is a predetermined exit and should be used to preserve your trading capital You can use a trailing stop which adjusts the stop when the market moves in your favour thus giving you a profit taking exit opportunity Trading Using R A couple of golden rules of trading 1 Never open a position in the market without knowing exactly where you will exit that position 2 Cut your losses short and let your profits run Know When to Exit Always have a predetermined exit point before you enter a position The purpose of that exit point is to help you preserve your trading

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