Position Size
Being able to buy at day low and sell at day high to a trader is like scoring hole-in-one to a golfer! Last Friday, I had the privilege to assimilate the joy of hole-in-one from my SembMar trade. I entered the trade at $4.28 and took profit at $4.39 making 11 cents.
For Swing Trade, my profit expectation is usually a few cents. Therefore, ten to eleven cents are more than satisfactory for a nimble trade. Anyone who wonder how a few cents can be considered as profit should review his position size. If the position size is too small, eg: 1 lot, you will need many, many bids to be profitable. To achieve the 'many, many' bids will require a 'long, long' time. Time in the market translates into risk. Conversely, if the position size is large enough, even 1~2 bids can be profitable. Obviously, the time frame required to achieve a few bids will be relatively short.
Over the years, I have learnt to trade at a position size not too small that must take forever to be profitable ( of course, not too large to be over trade ). In term of stock selection, usually on stocks above $1 ( preferably $2 ~ $4 ).
Most of the Swing Trade opportunity identified here are aimed at 8~15 cents and 2~5 days. Based on this criteria, 3 out of my 4 trades last week was good ( F&N, SembMar & IndoAgri were good, Capitaland was bad ).
For Swing Trade, my profit expectation is usually a few cents. Therefore, ten to eleven cents are more than satisfactory for a nimble trade. Anyone who wonder how a few cents can be considered as profit should review his position size. If the position size is too small, eg: 1 lot, you will need many, many bids to be profitable. To achieve the 'many, many' bids will require a 'long, long' time. Time in the market translates into risk. Conversely, if the position size is large enough, even 1~2 bids can be profitable. Obviously, the time frame required to achieve a few bids will be relatively short.
Over the years, I have learnt to trade at a position size not too small that must take forever to be profitable ( of course, not too large to be over trade ). In term of stock selection, usually on stocks above $1 ( preferably $2 ~ $4 ).
Most of the Swing Trade opportunity identified here are aimed at 8~15 cents and 2~5 days. Based on this criteria, 3 out of my 4 trades last week was good ( F&N, SembMar & IndoAgri were good, Capitaland was bad ).
Dow Jones Industrial Index:
ADX declines from 40 to 30 signaling the uptrend has weakened ( may be heading for a correction from extreme, see last post ). RSI is exhibiting sign of a failure swing ( not complete yet and not confirm yet ). Anyway, there is warning signs for a cautious week(s) ahead.
ADX declines from 40 to 30 signaling the uptrend has weakened ( may be heading for a correction from extreme, see last post ). RSI is exhibiting sign of a failure swing ( not complete yet and not confirm yet ). Anyway, there is warning signs for a cautious week(s) ahead.
Straits Times Index;
The long term trend is still up. However, the index need to close above 2,996 ( or round figure 3,000 ) to be bullish. ADX is sending us a caution sign of weakening uptrend since it is declining....
The long term trend is still up. However, the index need to close above 2,996 ( or round figure 3,000 ) to be bullish. ADX is sending us a caution sign of weakening uptrend since it is declining....
Labels: Trading Digest
posted by Market Wizards @ April 25, 2010
Comments: 0
