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Strategies & Market Trends : Swingtrading - Tricks of the Trade -- Ignore unavailable to you. Want to Upgrade?

To: Brandon who wrote (13)	10/3/1999 11:30:00 PM
From: Brandon	Read Replies (1) \| Respond to of 551

One of the major points that successful traders will try and make to you, if you can get one to talk to you, is not to trade against the trend, so that is also a major component of my system. I don't trade against a primary trend. If you trade with the trend, it puts the primary momentum of a stock, commodity, currency or bond in your favor. Trends always remain intact until a fundamental economic event changes them. Traders become creatures of habit, and eventually they get so used to buying XYZ on pull-backs, that it becomes very hard to change that bias. Brandon www.mtrader.com/swingtrade

To: Brandon who wrote (13)	10/3/1999 11:49:00 PM
From: Brandon	Respond to of 551

The system we use is essentially trend following, which is to say we follow the age old trading maxim of "the trend is your friend". Our system is fairly simple, looking for short term moves against the primary trend. LONG SETUP Our core buy setup will occur in a stock that we have determined to be up-trending based upon higher highs and higher lows. The next criteria is that we need to see a pull-back, consistent of lower lows and lower highs, over the course of 3 days. On the fourth day we will have an alarm set 1/8 above the high of day 3, and if this alarm is triggered we will go long, placing our stop 5/16 below the low of day three. SHORT SETUP Our core short setup will occur in a stock that we have determined to be down-trending based upon seeing lower lows and lower highs. The next criteria is that we see a rally, consistent of higher highs and higher lows, over the course of 3 days. This will be about the time everyone is wondering if the downtrend is ending, and the time we need to take action. On the fourth day we will have an alarm set 1/8 below the low of day 3, and if this alarm is triggered we will go long, placing our stop 5/16 above the high of day three. Brandon www.mtrader.com/swingtrade

To: Brandon who wrote (13)	10/4/1999 9:44:00 AM
From: William W. Dwyer, Jr.	Read Replies (2) \| Respond to of 551

Brandon, Good remarks on money management system. I would like to ask a question about your 2% risk module, using your example of someone with a trading account of $50,000 and taking maximum of 2% risk on an individual trade. I bet you knew this question was coming. Some portfolio managers various strategies of fully investing one's portfolio on a general market "up" signal, often taking ten simultaneous long positions for diversification. So, doing so would have the trader taking ten positions each with a potential 2% stop loss, therefore a total risk of 20% of the account, $10,000 in this case. Here's the question for you. With your system, your strategies, your money management principles, how many positions do you take at the same time? I suppose this is even more relevant given the possibility of overnight holds during which time one loses control of the trade. If the general market reverses quickly, one could conceivably get stopped out of all the trades very quickly, having substantially more than a 2% total loss. I am guessing you might recommend a trader initially takes only one or two trades at a time, gradually increasing with progress, but probably peaking at maybe 4 - 5 simultaneous trades. But I'd really appreciate hearing your take on this, especially since you seem fairly conservative. Thanks, Bill

To: Brandon who wrote (13)	10/4/1999 12:23:00 PM
From: Clarence Dodge	Respond to of 551

Hi Brandon First off... welcome to SI and Toni too..I hope. From my monitoring of your Swingtrading room I'm certain you'll both fit in around here quite well. As per your Money Manage ment formula my first reaction was one of your own apt used phrases holy carumbah...thats a lot of calculation to do in the heat of battle for each and every trade <g> After I expressed this reaction to you or Toni in the room you mentioned that certain streamlining measures might be in order. Can you go into more detail about these measures here? Clarence