On days like today when all the leveraged ETF mechanical systems
trigger in the same direction, it occurs to me that they are likely
to all have similar outcomes, happy or grim. So my question
to the gurus: What is a reasonable value for the maximum
percentage of ones portfolio to have invested in the five
mechanical trades? TIA
blue -- good you're diversified among five. the systems
are profitable, so Robin is right -- put into them as much capital
as you can handle without becoming emotionally concerned with what
they do on any particular day or week. If it bums you out
when they lose, make your bets smaller. The old Jesse
Livermore line -- sell till you can sleep.
I truly appreciate your insights and the link to the PDF
file.
FWIW I placed 3% ( of total portfolio) in each of the QID, SDS
and SKF mechanical system triggers and 2% in each of the two SRS
triggers, for a total allocation of 12.6% of my portfolio. I
sold all of SKF at the close for a 5.8% profit and kept 1/2 %
positions overnight of the others (i.e. sold 3/4 QID and SDS
and 5/6 SRS), keeping these smaller swing positions in view of
Matt's Watch list picks having triggered. Also holding some
EEV from last week which has now also broken out and is showing a
5.8% gain.
Overall a spectacular day.
And as for Jesse Livermore's adage, I knew I
had something wrong, I've been drinking increasing doses
of a nice red wine till I can get to sleep!
Posted by rgoodwin on 20th of Apr 2009 at 05:12 pm
Nice post. It's when you plan your trades and can do it without
emotion or fear or greed that you will become, gradually, a better
trader, better in terms of success. Try to start planning maybe the
night before or first thing in the morning if that's better what
you want to do next time you trade. Having this plan, along with
your escape hatches identified, will allow you to just relax and
trade. I've personally been working on this real hard and it's
amazing the difference it makes in trading. I'm not feeling like I
missed someting or HAVE TO GET IN OR OUT, etc. If you are a good
technical trader, then set up the mechanicals with x percent and go
about doing technical trades with more. Gradually you will be
sufficiently trading enough money in a manageable number of
positions to be happy. Make a plan, stick with it, and you can be
successful.
Posted by rgoodwin on 20th of Apr 2009 at 01:02 pm
You should do some reading on this subject. One book I am
getting some good insight from is Van Tharp - Trade Your Way to
Financial Freedom. It focuses on just this very subject. Large book
to read - but pretty decent. It's very difficult for anyone to
advise how much you should put into any one trade. Not only that -
you need to know your risk tolerance. If you make your trades based
on an expected GAIN, that is just not the right mental mind set.
You need to make trades knowing a loss CAN happen - and know your
tolerance for such a loss such that it will not create an emotional
reaction if it should go that way. A positive close also should not
generate a euphoric reaction either. Although the mechanicals are
all up nicely at the moment, they can, and have been known to
totally reverse and close at a loss. Others here may have some
different insight - this is just my personal 2 cents.
Position Sizing with the Mechanical Systems in Synch
EOD Mechancail Systems Page Real Time
Posted by blue on 20th of Apr 2009 at 12:21 pm
On days like today when all the leveraged ETF mechanical systems trigger in the same direction, it occurs to me that they are likely to all have similar outcomes, happy or grim. So my question to the gurus: What is a reasonable value for the maximum percentage of ones portfolio to have invested in the five mechanical trades? TIA
blue -- good you're diversified
Posted by Michael on 20th of Apr 2009 at 02:13 pm
blue -- good you're diversified among five. the systems are profitable, so Robin is right -- put into them as much capital as you can handle without becoming emotionally concerned with what they do on any particular day or week. If it bums you out when they lose, make your bets smaller. The old Jesse Livermore line -- sell till you can sleep.
The old Jesse Livermore line
Posted by matt on 20th of Apr 2009 at 02:27 pm
The old Jesse Livermore line -- "sell till you can sleep"
lol so true
Thanks Matt, Michael, rgoodwin, and CWA
Posted by blue on 20th of Apr 2009 at 04:41 pm
I truly appreciate your insights and the link to the PDF file.
FWIW I placed 3% ( of total portfolio) in each of the QID, SDS and SKF mechanical system triggers and 2% in each of the two SRS triggers, for a total allocation of 12.6% of my portfolio. I sold all of SKF at the close for a 5.8% profit and kept 1/2 % positions overnight of the others (i.e. sold 3/4 QID and SDS and 5/6 SRS), keeping these smaller swing positions in view of Matt's Watch list picks having triggered. Also holding some EEV from last week which has now also broken out and is showing a 5.8% gain.
Overall a spectacular day.
And as for Jesse Livermore's adage, I knew I had something wrong, I've been drinking increasing doses of a nice red wine till I can get to sleep!
Blue
Posted by rgoodwin on 20th of Apr 2009 at 05:12 pm
Nice post. It's when you plan your trades and can do it without emotion or fear or greed that you will become, gradually, a better trader, better in terms of success. Try to start planning maybe the night before or first thing in the morning if that's better what you want to do next time you trade. Having this plan, along with your escape hatches identified, will allow you to just relax and trade. I've personally been working on this real hard and it's amazing the difference it makes in trading. I'm not feeling like I missed someting or HAVE TO GET IN OR OUT, etc. If you are a good technical trader, then set up the mechanicals with x percent and go about doing technical trades with more. Gradually you will be sufficiently trading enough money in a manageable number of positions to be happy. Make a plan, stick with it, and you can be successful.
Blue
Posted by rgoodwin on 20th of Apr 2009 at 01:02 pm
You should do some reading on this subject. One book I am getting some good insight from is Van Tharp - Trade Your Way to Financial Freedom. It focuses on just this very subject. Large book to read - but pretty decent. It's very difficult for anyone to advise how much you should put into any one trade. Not only that - you need to know your risk tolerance. If you make your trades based on an expected GAIN, that is just not the right mental mind set. You need to make trades knowing a loss CAN happen - and know your tolerance for such a loss such that it will not create an emotional reaction if it should go that way. A positive close also should not generate a euphoric reaction either. Although the mechanicals are all up nicely at the moment, they can, and have been known to totally reverse and close at a loss. Others here may have some different insight - this is just my personal 2 cents.
Thnks - nice touch - and CWA- also thanks - nice link!!
Posted by pki on 20th of Apr 2009 at 01:16 pm
EOM pki
A google search brought me
Posted by cwa82675 on 20th of Apr 2009 at 01:14 pm
A google search brought me to a pdf link of the entire book robin is referring to.
LINK
CWA
Posted by rgoodwin on 20th of Apr 2009 at 01:43 pm
Where were you before I spent money to buy it on Amazon!? LOL! nice Post - Thanks for that.
Nice summary robin
Posted by matt on 20th of Apr 2009 at 01:07 pm
Nice summary robin
Educational Video on Positions Sizing
Posted by blue on 20th of Apr 2009 at 12:28 pm
http://www.youtube.com/watch?v=yX9DGYHA1Ng