Monday, September 26, 2011

A Democratic Wolf Pack

OK, a lot of people are seeing the results of the model portfolio and wanting to emulate these trades and asking for some sort of trade tracking spread sheet like we use to have. I want every member to get the most out of the site, but there are many issues that need to be considered to make this effective.

I will raise the issues, give you some links to read and wait to hear back from you and then we'll tweak this to make it work.

First the issues:

I use to keep a spread sheet of trade ideas, it filled up very fast and maintaining the spreadsheet (for a month of trade ideas) would take me several hours a night. I'm already putting in about 12 hours a day so the old spread sheet way isn't going to work, I have too much analysis to do and too many emails to answer.

So I started listing trades as trade ideas which I like better because they are timely, they are in a post format and explain the trade much better then a spread sheet can and most of all, because we have every kind of trader you can imagine here. This is a big deal because what works for one trader doesn't work for another and I could list the same idea and have 5 people with 5 different results ranging from a profit to a loss.

It is of utmost importance that you make the trade your own. That means that the trade fits your style of trading, your account size, the time you have to devote to watching the market and most of all, your risk tolerance. I have a very high risk tolerance, so trades that work for me or stops that work for me shouldn't be forced on you. You must make the trade your own and that is one of the advantages I see in posting the trade as members tend to contact me and we work together to make the trade fit their style.

Some of you may not know what style of trader you are yet, it's a process. I personally will trade anything in any timeframe because I have years of experience and faith in my indicators, it might take you time to get to that same place. There's a lot most of us have learned about the market that we must unlearn to be successful traders.

So here's an old article I wrote and it is linked at www.Trade-Guild.net on the left side of the site under "Resources and Concepts". Please be sure you read this as part of this discussion.

Zen and the Art of Investing


So it is crucial that you align your trading with the the issues I mentioned above. It is not realistic to think everyone can do 80% in a month, most hedge funds can't do 25% of that in a year, so don't worry, this isn't a competition, it's about learning to beat the market.

That brings me to another issue, one of my main goals and what I have seen to be most effective with long term members, they don't follow along with every trade, the follow along with the idea and they make the trade their own. No trade list can outperform learning and making the trade your own.

I mentioned risk management and my high tolerance for risk, if you are trading a retirement account, you don't want to be as aggressive as I might be, I don't want you to be that aggressive. You MUST find risk management that works for you. I submit the following post as a start for some ideas, I'm always available to discuss them at length with you.

Risk Management


Position Sizing


Another issue is timing, depending on the type of trader you are and the time you have to devote to the market. I try to give the best timing I can, but because we can see what smart money is doing, doesn't mean we understand how long they will be doing it and other related issues, so a trade that I might take at 11 a.m. price levels may have moved too much for someone who won't see that trade until after the market and can't enter until the next day. I almost always phase in to my positions rather then put on a full single position at one time, this is the same way Wall Street does it, but account size and transaction costs may make that impractical for some of you.

Allocation of assets... This is not the same for every single person. For instance, read this post.

When You're in a Hole, Stop Digging


The idea here is pretty simple, but if I say, "I'm going all in on this move" it doesn't mean that is appropriate for you. Besides recent performance we must also consider risk tolerance, what kind of portfolio you are trading-is it your kid's college fund? I think you probably get the gist.

I could simply list, as I have been doing, what positions I have in the model portfolio, however for some traders with larger accounts, the liquidity may make the trade unrealistic. For options traders, there may not be enough volume in the options contracts and there may not even be options available.

Another issue is your understanding of our key edge in the market, 3C. I've been writing an ongoing column so everyone can better understand an indicator that took me years to learn and  invented it. Your trust in the indicator will also determine your actions, members who have been here a long time have a degree of trust that allows them to take trades even when the market and the pundits are creaming the opposite. The ongoing link to understanding 3C is on the right side of the site, you'll see the links to each post.



Stops and other technical issues.

I have a lot of proprietary indicators that help me and other members manage our trades, my Trend Channel is one. I'm happy to share these with those of you who have TeleChart or StockFinder a they only work on those 2 platforms, 3C DOES NOT WORK ON Worden's TC-2000.

If you want to use these indicators, as long as you don't share them or republish their charts, I'm more then happy yo share them. First you'll need one of the two above platforms. I am a Worden affiliate because I've used their products for about 10 years. If you sign up and tell them Trade-Guild.net of affiliate 335 sent you, they send me a commission, but it doesn't cost you a dime more.

Here's a link to Worden products, please, just do not share these with anyone. They are only available to WOWS members. Just click the link to go to the Worden site. 3C ONLY works on the 2 Worden platform I mentioned and while I love TC-2000 and the real time mobile phone app with all of my charts and watchlists in real time on my phone, 3C doesn't work on TC-2000 yet.



The easiest way to share a stock list is via Google Spread sheets unless someone has a better idea, but consider the many realities, such as updating, stops , entries, options, liquidity, etc.

My goal is not to run a follow along trading service, it is to teach you how to beat the market and give you the tools and information to do that. As I showed, I have a member who is trading options and dong better then the model portfolio, but he says 3C is a big part of his success in knowing when to enter the market, but, he has made the trades his own and most of my long term members have as well. For newer members, my goal is to get you there, self sufficient and provide the data you need to make trades that fit your style, but I also realize that we do things 180 degrees different then most people are use to and learning by example initially is important.

So consider these issues and let me hear your ideas and hopefully we'll get a system in place that is of use and benefit to everyone.


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