3SOF

150.23% for 2005 so far...

My methods might be considered insane, but I rely heavily on the power of compounding to race my returns...to maximize this strategy I apply 100% of my portfolio to every investment I make...  To hedge against the risk of a concentrated portfolio I cut my losses early...5% or less...  I also focus on buying only the strongest chart patterns to increase the ratio of profitable investments to losses.

I am not a day trader, but I have been known to buy and sell in a single day when I feel an exit point is needed.

My main chart indicators include a solid base pattern and above average volume, among other things, and timing is everything when you cut losses quick.

My current position is in TPLM...Bought in today at $1.98

I like the plunger approach Stock Ninja, I have seen that work and I have seen that fail, it all depends on entry time, exit time and risk tolerance. It's working for you for sure. Looks like TPLM wants to take out the most recent $2.50 high. Good Luck
Mike

dont you have something in minus percentage 

and thats the reason i can't vote 

Hi Stockninja,

When I was younger, and my equity was smaller, I used to put 100% in every pick... not only 100%, but 400%... I mean, I used leverage to increase my positions far ahead of my equity. And I bought 1 stock at a time.
With this strategy, I was able to make like 100% to 200% profit in a good month, and by that time, I only had good months

But the problem came, when I first watched some big and unexpected big gap down, that from a moment to another take from me like 50% of my equity.... And the stops simply didn't work, because was really a gap down... I was like, 21 or 22 years old, and what I really wanted was adrenaline, I guess that at that time, adrenaline was more important then money (but I didn't knew that)

With time, and with a bigger equity, my mind changed a lot... Right now it makes absolutely no sense to me having 100% on the same stock, basically because of these reasons:
- Because I want to have positions in much more then 1 stock... I always have a list of stocks that I believe have really strong potential, and I can't afford to choose which one is better.... I may choose the wrong one.
- With a big diversified portfolio I discovered that I can also make 100% to 200% in a good month, but I know that Its almost impossible to loss 50% of it in one day.
- I sleep every night like a baby... with absolutely no worries, one of my holdings could go delisted right now, and I would stay completely cool with that.
- I can't afford to use 5% stops, has they just don't give room for my trading style, and if I was using that, I would be easily wiped out from my positions.
- I can trade much risky stocks, like OB and PK, where having a 5% stop loss it's nearly impossible.

Even if you choose great technical patterns... patterns may fail sometimes...
Even if you use tight stops, there could be a gap down overnight... or in a lot of cases, the 5% stop level will just wipe you out of your positions, just before a big move on your direction.

I will not disclose my year to date profit, because I didn't track it down here and I can't prove it, but it's significantly bigger then yours, with 15 times less risk

The point is, with a diversified portfolio I didn't stop making money... I just stop the big drawdowns, and I increased my personal stability has a trader.

Anyway, I appreciate that you disclosed you methods here, I think it's a really good topic to have here in discussion, and even I don't agree with your method, I completely understand you, because I used to do that.
This way, I must applaud you

PS: Sorry for my terrible English, has you may know its not my native language

Best regards,

Quote from: stockninja1 on June 22, 2005, 12:35:14 PM
I can not say a gap down wouldn't hurt, but I can say it has yet to happen to any of the chart patterns I have bought.

I understand you. But the problem is exactelly this «yet»...
It didn't happened to me for months, maybe 1 year... but then... PUM... lost 50% of my money in 1 single day... And trust me, I'm a Classic Technical Analyst, and i just traded awsome chart patterns

good luck !

Hi Ramsburg,

I can only support your view. It looks to me that we went through the same waters. Your story is very much known to me.   

When I started investing I have known only one thing – 100% (Vollgas). But in some solid European stocks. At that time they where like sleeping pills, nothing really exiting. So I mixed them with Warrants and that has given them a kick.
My job moved me into a different place on the world where I had not so really access to that business, but I parked my bugs in some funds. Later it moved me into a bigger city. A friend introduced me to a brokers office where he worked. And in that time zone where I am living it's comfortable, you can trade US market in the evening after your job. So I looked some Profis over the shoulder, got some nice tip here and there. It was feeling almost like on wall street live.   
Cautioned about risk I decided to diversify and best very sophisticated. The result:
Exact as you mentioned, on the end I lost control, I lost overview! 

I just recall one event : September 98 – Collapse of LTCM.
In that night I was in the market. And as always again – 100% with a portfolio of some shares, bonds and some futures (DEM, BP, and US Treasuries). But in my believe, this time secure by diversification.
At this time of my life I liked futures. Right Rumburg, in fact we where trading adrenalin. 
The news came out LTCM collaps, large shorts liquidated and and... the Japanese Yen moved 100 ticks in every 5 Minutes with a spread of 40 to 80 ticks (Only the one who has traded futures will know what that means)
For me initially it worked quite fine, points down in Bonds, points up in BP...   
After some minutes I realized what's going on I saw my chance and I had the right conclusion – save heaven, buy SF! However, in this exiting moment I forgot that SF Futures are moving in the USD referenced system inverse. Buying Swiss Franc means SELLING the Future! But having the spot market screen that moment on my PC, confused I BOUGHT SF Futures. And I was in with 100%!
What followed was a nuclear implosion.
In something like a hour stops got just filled 60 points away, positions got liquidated somewhere, where I never expected. Well, my niche account started with a hand full thousand dollars and some lucky gains disappeared from the screen.
I was just a private individual in that office. But beside me I have seen Profis getting ripped off that evening, evaporating accounts of  millions of Dollars.

Now, many years later I may conclude my experiences in to a couple of principles. They are not new, and I believe everyone have to take his lessons before truly understanding them.

• Separate your money for investing in to two or three accounts. Use only one for short term trading.
• Keep it simple to one System, don't over diversify, but don't put everything on one horse! And stick to one system (Don't mix long with short) as long as you not have more than 5-10 years experience in active trading!
• Do not excuse deviating from your principles because of opportunity. No one can say which chance is better or worse. Only afterwards we will know. Not considering this makes us psychological vulnerable, a victim to any "wolf with sheep's clothing" who comes across.
  In understanding the full picture you have to pass minimum one complete economical cycle in your active investment experience. Emphasis is on active! Just reading newspaper once the week and having some money in some funds does not count.
• Withstanding the temptation of super compounding. Trade your profits – protect your investment! - If I got enough profit in the short term account, I will take a part off and move it into the long term account. There I will by stocks when they are a bargain, where they may start moving in a month in a half year or later. But where they are at such a bargain price that I cannot loose anymore.
• Do not measure the gains of the accounts against each other. If you start this you turning to the dark side, emotions will take over, you may shift money back into the short term account, than you feel more secure and take more risk and...Than this system starts collapsing.

That are only some.
I personally think we should not succumb to the temptation to display our gains. The result may be devastating. Some of us could leave their trading system behind trying to copy other and ending up as looser.
Everyone who leaves the board in anger is also a loss on possible valuable information.
This community should not be driven to compete by force. That will lead us to wrong decisions.

This is one of the best communities (if not the best) in the web.
And we should try to protect this from dangers outside and ourselves.

andyman 

Andyman,

Great, Super, Fantastic post !
Applaud ++++

That's a really good testimonial !

I agree with your last words, about not competing with each others... We must always keep in mind, that we are all alone on the trading desk !  We must all share our experiences, that way everybody wins on this community.

Thanks again for your great post ! 

best regards,

andyman [applaud]

Hey Stockninja, I said before you have a system that works for you and congrats keep it going, everyone has a different style and reason for being in the market, you have fantastic gains well done, my gains are not that large, but you know what I am a fulltime trader and I feed and support my family by trading, consequently I want returns, but I want to limit risk as much as possible (conflicting goals!!). So I don't care for how big are my gains your gains I care that I pay my bills feed my family and maintain my lifestyle. I keep my emotions away from trading as far as I can, entering into bragging rights on gains is an emotionally charged path and not constructive to trading success. If and when you do come across a gap down stock you are 100% invested in I doubt you'll be posting your portfolio gains then. But good luck the system suits you and your trade style.
Mike

Sorry, stockninja1

My reply was not intend to be personal, merely related to Ramsburg, as I feel somehow a "common ground", and to the subject itself.

In fact I didn't smite you and I wouldn't smite you just for a silly question.
I understand you, and your idea, and it may be justified and in my younger years I would have the same Idea too. It was OK to open this topic so we can find our position to it.
Only so we can learn from each other. Learning not only for making money, also running this community.

I have seen on Yahoo and other investment boards that personal info's are getting quickly taken for a personal mud war. I feel that our board is to valuable in turning this into it.
For me, most of my short term plays, since I am member, are recorded here.
But 3SF is for short term trading, all my long term positions would only confuse the audience. However, if there is a board for long term plays (as I noticed, my safe heaven account) I am willing to share all my info's about. But the performance measurement of a long term account is by far more complex as a simple technical sort tern trading.   

You said that you could not learn anything here...just have some patience it will take some time. Join us in our community, you are welcome, and you will learn, but bring with you some time. This board is just two month old.

And generally, trading is something so scurrile...expect to learn from information which you didn't expect.

Let's have peace.   

If you have some findings just post it on the stock picks, we will applaud, we will analyze, and some time I have some finding – you can take it and profit from it.

For all who are deeper in and feeling the reel battle in themselves a good link:
http://www.innerworth.com/

Andyman !

Great point, about the long term board !
I think it's also important to have some section here, for long term plays, so we are going to create a new board for long term trading.

thanks again Andy, you represent the real spirit of this community !

best regards,

i read all the replys to this topic and i have concluded that if we all used the same method, we probably wouldn't make a buck. everybody has a different tolerance for trading their hard earned cash..and that influences HOW and HOW MUCH we trade. it's obvious that we have some pros that have been doing this for a long time and others who are new to the game. i do believe what makes this site work is the sharing of info from the members of the site...seasoned or not...i think if members share their methods..it will help every member, including yourself...even if your are a guru in the market. i do like reading how everyone has their own approach......very insightful....keep this thread going...