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Gold/Mining/Energy : Swing Trading Toronto Stock Exchange Listed Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Al Collard who wrote (2240)	11/3/2001 12:39:24 PM
From: Vitalsigns	Read Replies (3) \| Respond to of 2773

"Next step is to eliminate those 10% kick outs." Gasp !!!! You guys can't be serious. The 10 % rule is actually too large IMO, it represents a failure to react to obvious events. It's called the "Deer caught in headlights rule", happens when a stock breaks past obvious support levels yet the participant fails to react and hopes for a retrace to get out at a more favorable price and limit loss. There are many reasons for the loss in the first place, most times it is do to a misplaced or mistimed order entry, too soon or too late . I can guarantee one thing, if I were to increase the stop loss orders to 20 % , the losses would increase or the trades would not be exited until either the 20 day kickout rule or a retrace in the stock that may or may not happen. I can see a person carrying 2 stocks that are in heavy losses and not closing them because they don't want to take the loss , which is what normally happens in real life trading. The best thing for many traders is if the brokers enforced a %perc kickout on each trade that way many would have survived the bear market of 2000 with equity. Don't forget a 2% loss requires a 4% gain to recoup , a 10% loss needs a 20% gain to recoup , a 20% loss requires a 40% gain to recoup and a 50% loss requires a 100% gain to recoup. The bigger the losses the longer and harder it is to recoup. You need to have a high percentage of Win Ratio to survive otherwise the numbers will eventually retire your trading account. You need to have a high dollar per winning trade and a high win ratio to be able to absorb the 10% stop loss rule, a 20% stop loss rule would be virtually insurmountable over time , you might get lucky once or twice , but over a longer period of time, the Win/loss ratio would destroy your account even if you had a high Win ratio and high Dollar per win. It takes time for individuals to understand money management and how it can increase your winnings even with a low win ratio and how not having a money management plan can destroy an account even when a person has a extremely favorable win percentage. I agree that the 6 trade limit sometimes handcuffs us into a trade because the there are some days when we have used up all 6 trades and still carry a few positions into the close that are going against us and we cannot do anything about it. This goes against the normal rules of trading. So what I am prescribing is that any positions taken during the day can be exited at any time but this would require the trades to be counted only from Entry and not as Entry and exit. In so doing i would need to reduce the amount of trades to 3 instead of 6 per day as it would be the same. 6 trades the old way is In , out, in , out , in , out. 3 trades the new way would be counted as 3 Entries . I Want to stay away from daytrading the swing account as much as possible as it becomes second nature to many of us. So by counting the trades as 3 entries per day , it is possible to exceed the old 6 trade limit. For example , if you entered 3 trades on monday and kept them overnight, you could exit those three trades on Tuesday , enter three more on tuesday and exit them by close totalling 9 execution trades but under the new system it would only count as 3 Entry trades. This way , if a trade goes against you , you can now take action and protect your losses from growing too large. So New Rule if passed would Limit trades to 3 Entries with no more than 2 Entries per day in any one stock Any Comments?