Position trading-safest and best?

sh50 · #11 5th October 2005, 10:47 AM

Vince has given somewhat unique and interesting views.

I agree that a good trader is one who reacts to market situations well. I am not in agreement however that a good trader can trade well in any timeframe because that depends upon temprament. So many people including traderji have cautioned against day trading that it is difficult to believe this.

We have had several posts on day/swing trading but position trading has not got its due I think. That was one of the reasons for initiating this post. Individual preferences apart, peope who can contribute on position trading.

jaideep · #12 5th October 2005, 01:08 PM

Quote:

Originally Posted by vince

Hi friends,
When we discuss position trading versus day trading let us not forget they are 2 sides of the same coin. The only difference is the risk/reward. The basics of the game remain the same. What do we need to have a trade?
1) Entry point
2) Stop loss
3) Exit
In other words a trading system. If we have the above we have a trade.

Further markets cannot be predicted in any time frame and we should not even attempt to do so.
Markets can only do 3 things namely:go up, go down, and remain where they are, and since what the markets do is beyond our control we can only control our reaction to what the markets do?
If you are ready with your reaction to the above you are ready to trade.

I would sum it all up to say "A good trader is a good trader in any time frame" and the vice versa also holds true.

Regards and trade well.

Interesting perspective Vince. I endorse all that you say except the last para. Traders earn their good/bad reputation according to their success/failure rates in trading over different time frames. The mind-set required for trading over different time frames is distinctly different from one another as the over-riding influencing factor is to question the need to trade at all. Some just don't have the time (maybe their clock is ticking away) to sit & wait around for months & years nursing & watching their blue-chip saplings grow into enormous trees. They could perhaps be retired cronies (like me

) who try their darnest to make a living off the markets, or at least to supplement the fuel burning their home fires. What do they do? Get into short-term trades & perhaps occasional day-trades to hear the clink of the pennies dropping into the pockets on a regular basis. This helps to keep the beginning-of-the-month-blues away & bill collectors at bay. Those with cushy well-paid jobs with regular pay checks can do as they please with no time-pressure on them. So, it's each man for himself when it comes down to choosing a suitable time frame for trading. No two people are alike in this matter too.

vince · #13 5th October 2005, 01:37 PM

I would agree with both of you sh50 and jaideep that traders trading different time frames would tend to have mind sets/ temperament as different as their risk appetite.

Caution is well advocated in all forms of trading however the risk can only be as large as your stoploss which is well within your control.

I am not for or against trading any specific time frames but I do believe in the adage "Plan your trade and trade your plan." I personally do not restrict myself to any specific time frame and trade as and when the opportunities present themselves.

Regards,

Vince

jaideep · #14 5th October 2005, 06:59 PM

Quote:

Originally Posted by vince

...............Caution is well advocated in all forms of trading however the risk can only be as large as your stoploss which is well within your control........... I do believe in the adage "Plan your trade and trade your plan." I personally do not restrict myself to any specific time frame and trade as and when the opportunities present themselves.

Regards,

Vince

Yes Vince. I agree with you entoto.

gsbisen · #15 8th October 2005, 12:14 AM

hello,
i have read ur discussion n i m really enlightened.my only doubt is wether this theory is effective when mkt is in bear face.

sh50 · #16 8th October 2005, 09:14 AM

gsbsien has raised a very valid point in my view. In the short run one can also short futures in addition to shares(if one has delivery) In India long term derivatives are not there and therefore one can only short shares if one has the delivery but to do that for a fairly long duration would be dicey.

raghu46 · #17 9th November 2005, 04:16 PM

hi
im a novice who has burnt his fingers very badly doing day trading and am now considering swing trading.But this seems to be a second cousin of day trading.Any comments from our esteemed seniors>

jaideep · #18 9th November 2005, 07:41 PM

Quote:

Originally Posted by raghu46

hi
im a novice who has burnt his fingers very badly doing day trading and am now considering swing trading.But this seems to be a second cousin of day trading.Any comments from our esteemed seniors>

Hi! Raghu,

I detect a question in your statement posted. Enough & plenty has been written in this forum on both day & swing trading. Perhaps a little effort on your part to browse this forum for relevant leads will enlighten you to satisfaction. For now though, maybe it would suffice to say that day trading as opposed to swing trading (meaning short-term position trading) is a wholly different ball game altogether. My view is that they are not even distant cousins, let alone second cousins.

Forgive me if I sound too abrupt but repetitive comments/explanations as you have requested are surely a waste of time/effort. You will be the first to admit that, I know.

Go ahead & browse this forum. You'll get what you want to know.

jaideep · #19 9th November 2005, 07:54 PM

Quote:

Originally Posted by raghu46

hi
im a novice who has burnt his fingers very badly doing day trading.......... .Any comments from our esteemed seniors>

On the subject of day trading Raghu, why did you burn your fingers VERY badly? BADLY is bad enough, is'nt it? Methinks you set too high targets for yourself intra-day & no or too slack stop-losses. Remember one thing my friend, "TINY DROPS MAKE THE OCEAN". Don't go gung-ho about day trading because profits are instant, so to speak. Losses are alike too. My advice is..."Catch the Pennies every day to count your Pounds every month". This is preaching based on what I practice. Others may differ with my views but this I have to tell you is from a fairly successful day trader.

gandharvashu · #20 9th November 2005, 09:40 PM

Hi!

I think the best way is to use fundamental analysis and buying ur fundamental scrips with technical analysis, i.e., at lowest points. For example while following only technical analysis this happened to me.

I bought samtex fashion 300 shares at 43 somewhat in last month when according to me falling price has reserved. Then after a week, the positive breakout happened and price went to touch intradaday at 50, this all happened within a week. I calculated that this shares give breakout when the volume is 40,000 or above and on that day it was. I ended up buying 500 more shares at 48 as for me it was positive breakout. Now what happened afterwards. Prices started declining and when it broke 40, i was forced to exit as this was false breakout. Now the price is around 30 something.

Reason for false breakout - later on i tried to find the reason for false breakout, I checked it's P/E was too higher at that the price of 43 somewhere around 40. So every upward move was a sell, so i ended up losing.

So my view is that select a stock with fundamental analysis and enter with technical indicators or select a stock with technical analysis and then check fundamentals.

Any comments!