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Strategies & Market Trends : Systems, Strategies and Resources for Trading Futures -- Ignore unavailable to you. Want to Upgrade?

To: stumpy who wrote (16242)	2/21/1999 2:03:00 PM
From: Patrick Slevin	Read Replies (3) \| Respond to of 44573

Suggestions? I don't quite know what you mean. If it's Money Management then you need to come up with a Business Plan. I daytrade because my results are okay. Someone else will position trade because it may be easier for them. I tried to daytrade stocks, it was too much trouble. Options were okay until they split the OEX, then I started losing. I imagine if the suggestion that you are looking for is whether you should day trade or position trade then I would say that you have to find your niche. Daytrading is rather simple for me. I find position trading to be a pain in the neck. I would much prefer to be in Cash each night. I do own a lot of stock, but the bulk of it was purchased over a 20 plus year period. So carrying it over night is not much of an issue. The thing I have to get my arms around is taking the risk of holding a futures position overnight. It's rare but sudden overnight news can be a problem. Even daily news can be rough. I think Nemer figured out that last October 15th (I think it was) if you Short even just one spoo contract even up at 3:10 EST then by 3:15 you were out some ridiculously high number, somewhere in the tens of thousands. If that can happen once in a while to a daytrader then a position trader can really get clocked. So I've been toying with the idea of setting up a separate account for trading positionally. Using the small contracts at first. As it appreciates in value I would add total contracts. Say, after it made 100 points I was going to go to trading more contracts or one large contract. Most of all, both accounts have to be run as a business. They have to pay me a salary and they have to be a one time investment. So for example, if I felt 25,000 was a fair number to put into the position account then I would never put more in. It would have to sink or swim on the initial investment. After a year I would start to calculate what I would be "paid". At that point I would start setting what I would consider to be reasonable goals for the account based on performance over the first year. Then review it annually. Worst case scenario, if the account blows up then I am out of the position trading business for a time until I can review the errors and decide on a course of action. The $25,000 will be written off against the day trade account. This would be a rudimentary outline for a Business Plan. Other factors to consider would be Disaster Planning, what to do if you incur a string of losses, a methodology for determining what days of time frames you trade well or poorly, and so on. For example, I normally trade poorly during Expiration Week. It's a habit I have to break. I should avoid that week each month. On the other hand, UnEmployment is normally my best week. It's true. People have repetitive Good Days and Bad Days. Most people, if they look at a history of their trades, will quickly see that they trade well on Wednesday and poor on Monday for example. I set up a database recently just to "show" me a track record for such things. Another thing I noticed was that I make more money and have more successful trades in the morning. So I've been laying low recently after noon unless I'm still in a trade.