Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Bilow who wrote (1102)	6/19/1999 8:54:00 PM
From: Tai Jin	Respond to of 18137

I think share size is actually the wrong metric. I would like to trade based on a dollar amount. All other things being equal, what I want to do is to use x% of my equity in any one trade. This means that I would trade twice the shares of a $20 stock than a $40 stock. It's certainly easier to think in terms of shares, but that's because existing trading software doesn't provide an automatic way to trade based on dollar amount. Of course, the dollar amount will vary depending on the risk of the trade, volatility of the stock, and how much I am expecting to gain from the trade. And as you say, the amount being traded should be reduced after each losing trade. ...tai

To: Bilow who wrote (1102)	6/19/1999 9:03:00 PM
From: dpl	Respond to of 18137

" Anybody out there modify their share size in real time (i.e. intraday) according to their results?" I try to set share size according to risk. "If so, how did you control your brain?" I find that my brain is the second hardest organ to control. <g> David

To: Bilow who wrote (1102)	6/19/1999 9:04:00 PM
From: Rick Faurot	Respond to of 18137

Carl, I have increased my default share size in periods where I was doing well and I have decreased them or gone to papertrading when I am losing. My size strategy takes place over weeks or months, however, not in one day. I think you are talking around the most crucial point for a trader which is emotions/mentality. For example, you say <<So if I lose money on a trade, I believe that it is more likely that I will lose money on the next.>> What I am working on is to be so on top of charts, news and the minute to minute activity of the stocks I like that emotion disappears completely. I want to get in a completely automatic state of action. I'm not there yet by a long ways, but I believe that this is a vital goal to achieve. You have to know for a certainty the exact moment to enter a trade and enter it without hesitation. Easier said than done, no doubt, but that is my goal. Rick Ps..I agree with your earlier post that a trader must get absolutely comfortable with his/her execution system. I have done thousands of trades as a novice trader without knowing a tenth of what I know now. I didn't make money, but I learned to work the routes, read Level 2, etc. and this is vital. I think one problem that traders have when they first come to Level 2 and multi-route fast execution trading is that they don't make enough plays to learn the system. It would be like trying to go racing in an Indy car without doing any practice laps. One more point about share size. If you like trading 2nd tier internet stocks, you will find that 200 shares is about the most you can trade and still have reasonable ease of entry and exit. If you trade the "big four" a thousand share lot is no problem because the liquidity is always there. Liquidity and the possibility of entering and exiting a trade close to the inside bid/ask is a vital criterion to me.