Traders' Roundtable

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...

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...

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...

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...

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 ...

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 equ...

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...

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...

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...

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...

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...

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 ...

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?&quo...

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...

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...

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...

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

I'll post an opinion when I've tried it.

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...

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...

"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, co...