Search found 85 matches

by Paul King
Wed May 30, 2007 7:04 am
Forum: Trader Psychology
Topic: Times you couldn't take the trade and how you overcame it
Replies: 8
Views: 10321

Don't use it then

2) The Forex leverage is intimidating me. It's fun to gain big, but the losses can be pretty significant as well Being highly leveraged in FX is actually optional. The risk you take is the difference between the entry price and where your stop is multiplied by your position size - just like with you...
by Paul King
Wed Nov 29, 2006 8:35 am
Forum: Money Management
Topic: Relationship between volatility and certainty
Replies: 6
Views: 6827

dispassionate, How are you measuring degree of certainty in this case? My observation is that volatility has little to do with whether a position moves in your favor or not. If you have an exit strategy based on some measure of volatility, then you will simply have position-sizes in proportion to yo...
by Paul King
Wed Nov 22, 2006 10:47 am
Forum: Money Management
Topic: Pre-emptive money management
Replies: 9
Views: 10078

If one uses volatility-based position sizing then the most dangerous time for your trading is when your preferred estimate of current volatility turns out to be very inaccurate. Obvious, and avoidable, examples include scheduled conference calls for public companies. In these cases you can either re...
by Paul King
Sun Nov 05, 2006 2:26 pm
Forum: Testing and Simulation
Topic: Reverse technical analysis
Replies: 8
Views: 4671

Neil, If only trading were as simple as finding a system that lost a lot of money and reversing the entries - everyone could be successful since it's pretty easy to develop something that loses lots. Normally it is the exits that make the money in a trading system, so reversing the entry on a losing...
by Paul King
Wed Oct 25, 2006 9:12 am
Forum: Trend Indicators and Signals
Topic: Trend following from short-term signals
Replies: 1
Views: 6048

It's all trend following

Ron, In my opinion everything is trend-following and only the timeframe is different. Attempting to enter at a price and sell at a higher price is attempting to capture some form of price trend whether the bars are tick, 1 minute, 1 day, or whatever. (I know some option strategies are about finding ...
by Paul King
Fri Sep 22, 2006 9:52 am
Forum: Stocks
Topic: Noisy/Unnoisy stocks PORTFOLIO
Replies: 3
Views: 4829

No, my personal tradable list of US equities comes from NYSE, NASDAQ and AMEX equities that meet my requirements for price, market capitalization, volume and volatility - they may or may not be part of the S&P 500 (right now 478 of the S&P500 are on the list). I have a list of about 2000 equities in...
by Paul King
Fri Sep 22, 2006 9:19 am
Forum: Stocks
Topic: Noisy/Unnoisy stocks PORTFOLIO
Replies: 3
Views: 4829

Without your defintion for what you consider important attributes in the equities you want to trade it's hard to comment really. If selecting tradable instruments is boring to you, you may be in the wrong business. This list of 19 S&P components is as good as any: D DOMINION RES NEW DD DU PONT E I D...
by Paul King
Wed Sep 20, 2006 8:38 pm
Forum: Money Management
Topic: Relationship between bet size and frequency of trades
Replies: 5
Views: 5370

The risk will stay the same if you are using a percentage risk position-sizing model i.e. it is independent of trade frequency. For example if you are trading the S&P 500 emini futures contract which is $50 per point, and your account is $100,000 and you want to risk 1% per trade ($1000) then if you...
by Paul King
Wed Sep 20, 2006 9:42 am
Forum: Money Management
Topic: Relationship between bet size and frequency of trades
Replies: 5
Views: 5370

Higher frequency trading implies a shorter average trade duration (or you would simply end up with too many positions for available capital). Trade duration is determined by how close your stops are to the current price. Shorter trade duration implies tighter stops. Tighter stops means you have to t...
by Paul King
Tue Aug 01, 2006 4:39 pm
Forum: Trend Indicators and Signals
Topic: Overlay macroeconomics and news
Replies: 4
Views: 5673

I am mostly systematic, but I have found a couple of things that are difficult to code. One of them is whether an instrument is liquid enough right now to enter a trade with my desired position size. Yes I have a mechanical list of tradable instruments using market cap, ATR, ADV, price, etc. but whe...
by Paul King
Wed Jul 19, 2006 4:01 pm
Forum: Testing and Simulation
Topic: 2 systems - 1 market
Replies: 9
Views: 4741

Treat as 2 separate systems

Since you are talking about 2 completely different systems with different timeframes (and trend is always dependent on what timeframe you are considering) I would treat them completely separately. The long term trend following system will generally have wider stops, smaller position-sizes, longer av...
by Paul King
Fri Jul 14, 2006 12:00 pm
Forum: Money Management
Topic: How to determine the amount for trading size?
Replies: 7
Views: 6894

Eric, Helping traders develop and operate trading systems and trading business plans that fit their goals, objectives, time available, personality and tolerance for risk and reward in the context of their overall unique situation is a large part of what I do on a day-to-day basis. As I mentioned on ...
by Paul King
Fri Jul 14, 2006 9:20 am
Forum: Money Management
Topic: How to determine the amount for trading size?
Replies: 7
Views: 6894

Same question, different forum, different answer

Hello again Eric, I hope you get an answer you like better on this forum :-). I think what you are looking for is something like "How about position-sizing so that you risk 1% of current capital allocated to your system based on the difference between estimated entry price and initial stop?", but I ...
by Paul King
Fri Jun 16, 2006 8:21 pm
Forum: Trader Psychology
Topic: Going against the crowd isn’t easy
Replies: 10
Views: 10241

My definition of 'brave' is taking action despite fear, I was afraid of spending the rest of my life in a cubicle, so I acted to do something about it. I suppose I could have been afraid of the unknown, but I never really considered failure as an option (but building my business did take a lot longe...
by Paul King
Fri Jun 16, 2006 5:31 pm
Forum: Trader Psychology
Topic: Going against the crowd isn’t easy
Replies: 10
Views: 10241

Who cares about the crowd?

In many ways simply deciding to trade for a living is going against the crowd. I quit a 'good' job with a leading ECN to start my trading business and everyone I talked to thought I was crazy. In fact, spending the rest of my life in an office selling my time to an employer in order to accumulate en...
by Paul King
Tue Jun 13, 2006 9:50 am
Forum: Testing and Simulation
Topic: Did anyone try "Trading Mind" software from Norman
Replies: 2
Views: 4083

Got it, liked it

I got the TradingMind software, used it, and I like it. The main caveat I would say is that it can only help you if you already have a complete and positive-expectancy trading method, but are unable to implement it accurately due to human/psychological errors or stress. The software can't make up fo...
by Paul King
Fri Jun 09, 2006 10:06 am
Forum: Testing and Simulation
Topic: Did anyone try "Trading Mind" software from Norman
Replies: 2
Views: 4083

It's next on my list of trading software to try out.

I'll post an opinion when I've tried it.
by Paul King
Fri Jun 02, 2006 9:04 am
Forum: Money Management
Topic: Question regarding volatility and preferable stock selection
Replies: 14
Views: 12543

For me it would depend on which trade took the least capital/margin to implement at a size that achieved the desired risk (assuming you couldn't put them both on). "Those who have knowledge don't predict. Those who predict don't have knowledge." Lao Tzu, 6th century BC poet "Those who know the proba...
by Paul King
Tue Apr 18, 2006 4:38 pm
Forum: Money Management
Topic: A method to monitor and adjust system's risk?
Replies: 5
Views: 5974

My estimate of risk is as follows: Calculate the difference between the net liquidation value of your account right now versus the account value if all your stops were hit. The difference in these 2 numbers is how much risk you are currently taking. Note that this assumes you will be able to get out...
by Paul King
Mon Mar 27, 2006 1:31 pm
Forum: Trader Psychology
Topic: the only professional goal -trading
Replies: 10
Views: 12751

"Do you have to devote yourself full time in order to really excel in the field of..." My answer would be "yes", and that applies to any field, not just trading. To 'really excel' at anything takes a sound theoretical understanding, suitable environment, practical application, commitment, desire, an...