John Murphy's Technical Analysis of the Financial Markets
joel.llanillo
Batch 101 ba tayo? Or hula lang to? :) Ano nga bang batch tayo?
Anyway, kaya pala di ko makita-kita tong email na to, sine-search ko 'absolute traders' and 'yahoogroups'. May googlegroups din pala. Akala ko yahoogroups lang.
I've attached a popular textbook on technical analysis. Pwede na ding bathroom reading stuff. :)
Send ko din sana yung Market Wizards ni Jack Schwager. Pero wala akong makitang pdf copy. Pag may nakita ako, send ko din dito.
Good luck on our trades!
joel.llanillo
mickymac
On Thursday, May 24, 2012 10:46:42 PM UTC+8, joel.llanillo wrote:
joel.l...@gmail.com
Top 5 books? Magbabasa na lang muna ako habang downtrend. Hehe.. Takot ako mabutas 4900 e. No balls.. :p
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joel.l...@gmail.com
Top 5 books? Magbabasa na lang muna ako habang downtrend. Hehe.. Takot ako mabutas 4900 e. No balls.. :p
mickymac
On Friday, May 25, 2012 11:29:04 AM UTC+8, joel.llanillo wrote:
I mean your recommended readings for beginners.From: joel.l...@gmail.comDate: Fri, 25 May 2012 02:38:22 +0000
ReplyTo: joel.l...@gmail.comSubject: Re: John Murphy's Technical Analysis of the Financial MarketsMicky,
Top 5 books? Magbabasa na lang muna ako habang downtrend. Hehe.. Takot ako mabutas 4900 e. No balls.. :pFrom: mickymac <mick...@gmail.com>
Date: Thu, 24 May 2012 18:36:12 -0700 (PDT)
Subject: Re: John Murphy's Technical Analysis of the Financial MarketsI have 3 books of the Market Wizards series.You may photocopy or scan it. =)I also have thousands of books on trading, but it's in my other laptop that is still in the repair center.--
On Thursday, May 24, 2012 10:46:42 PM UTC+8, joel.llanillo wrote:Hi guys!
Batch 101 ba tayo? Or hula lang to? :) Ano nga bang batch tayo?
Anyway, kaya pala di ko makita-kita tong email na to, sine-search ko 'absolute traders' and 'yahoogroups'. May googlegroups din pala. Akala ko yahoogroups lang.
I've attached a popular textbook on technical analysis. Pwede na ding bathroom reading stuff. :)
Send ko din sana yung Market Wizards ni Jack Schwager. Pero wala akong makitang pdf copy. Pag may nakita ako, send ko din dito.
Good luck on our trades!
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joel.l...@gmail.com
I'll read Trading for a Living next.
What do you think about Financial Spread Bettting? Tax free daw for UK citizens. Pag non-UK, do you know?
Mikey Macainag
Too volatile, but you can still apply technical analysis. Don't look at other markets yet. Practice with ours first and try to understand and apply what you learned.
Sent from my Samsung Galaxy Tab™
joel.l...@gmail.com
williamlimtan
Dr. Alexander Elder books
1) Trading for a Living: Psychology, Trading Tactics, Money Management
2) Come Into My Trading Room: A Complete Guide to Trading
Managing Risk or Money Management
Money Management goal is to accumulate equity by reducing losses on losing trades and maximizing gains on winning trades.
“Markets kill traders in one or two ways. If your equity is your life, a market can snap it with a single shark bite, a disastrous loss that effectively takes you out of the game. It can also kill like a pack of piranhas, with a series of bites, none of which is lethal alone but which together strip an account to the bone.”
The 2% Rule – protection from sharks, limit your loss on any trade to 2% of your equity.
Example: 100K Equity (50K cash or buying power, 50K positions current market value)
You want to trade with an Entry Price = 19.00, Stop Price = 18.00, Target Price = 22.00, How many shares you are allowed to buy?
2% of 100K = 2,000 your maximum acceptable risk per trade
Buying at 19.00 and putting a stop at 18.00 you will have 1 peso risk per share
Divide maximum acceptable risk (2,000) by 1 peso risk per share = 2,000 shares (maximum number of shares), but you have to compute also the broker charges. To be exact it will be 1,600 shares maximum:
Buying Cost is 19.00 x 1,600 + 89.68 (broker charges) = 30,489.68
Selling Cost at Stop Price is 18.00 x 1,600 + 228.96 (broker charges) = 28,571.04
Stop Cost (Buying Cost – Selling Cost)= 1,918.64 - should be less than or equal to the maximum acceptable risk per trade which is 2K (2% of your equity).
So, the computation of the shares you can buy will be depending on the Stop Price:
Stop Price=18.00 | Stop Cost=1,918.64 | Risk/Share=1.00 | Shares=1,600 | Target Gain=4,430.48 | T.Gain%=14.53% | Risk/Reward=1 : 2
Stop Price=18.50 |Stop Cost= 1,828.13 | Risk/Share=0.50 | Shares=2,600 | Target Gain=7,199.53 | T.Gain%=14.53% | Risk/Reward= 1 : 3
Stop Price=18.90 | Stop Cost=796.39 | Risk/Share=0.10 | Shares=2,600 | Target Gain=7,199.53 | T.Gain%=14.53% | Risk/Reward =1 : 9
Technical Analysis helps you decide where to place a stop, limiting your loss per share but no matter how accurate your analysis will not make you a winner and guarantee success. Money management rule is to limit your loss on any trade to a small fraction of your account. Establish the size of your trades on the basis of how much money you can afford to risk, not how much you want to make.
Others may react to the 2% rule that is too low for small accounts, the answer is simple - “When you go into bungee jumping, it doesn’t pay to extend the cord”
Overtrading – putting on trades that are too large for your account is a deadly mistake. Beginners are in hurry to make money, whereas serious traders begin by measuring risks. If you start small and concentrate on quality, you’ll become a better trader. Once you’ve learned to trade – find trades, enter, set stops and profit targets, and exit – you can start increasing your trading size to the point where your account starts generating a meaningful income.
The 6% Rule – protection from piranhas, limit your total loss 6% of your equity per month.
A trader keeps sharks at bay with the 2% rule, but he still needs protection from the piranhas. The 6% rule will save you from being nibbled to death.
Traders on a losing streak keep trying to trade their way out of a hole. A loser thinks a successful trade is just around the corner, and that his luck is about to turn. He keeps putting on more trades and increases his size, all the while digging himself a deeper hole in the ice. This sounds familiar?
- Whenever the value of your account dips 6% below its closing value at the end of last month, stop trading for the rest of this month.
- Calculate your equity each day, including cash (buying power) and current market value of all open positions in your account. Stop trading as soon as your equity dips 6%.
- Close all positions that may still be open and spend the rest of that month on the sidelines.
- Continue to monitor the markets, keep track of your favorite stocks and indicators, and paper trade if you wish.
- Review your trading system and strategies.
The 6% rule will save you from a series of losses and it forces you to do something most people cannot do on their own – stop losing streaks, saving the bulk of your account to trade the next month.
The 6% rule encourages you to increase your size when you’re on a winning streak. If the markets move in your favor, you will move your stops beyond the breakeven and put on more positions; you have no capital at risk and may look for new trades.
Conclusion
Using the 6% rule, along with the 2% rule, is like having your own trading manager. The trading manager watches his traders like a hawk and sets the maximum allowed monthly drawdown for each trader. When an employee sinks to that level, his trading privileges are suspended for the rest of the month.
williamlimtan
williamlimtan
RE: Magbabasa na lang muna ako habang downtrend. Hehe.. Takot ako mabutas 4900 e. No balls.. :p
For some traders, the discipline and patience to do nothing when the environment is unfavorable or opportunities are lacking is a crucial element in their success. For example, despite making minimal use of short positions, Kevin Daly, the manager of the Five Corners fund, achieved cumulative gross returns in excess of 800% during a 12-year period when the broad equity markets were essentially flat. In part, he accomplished this feat by having the discipline to remain largely in cash during negative environments, which allowed him to sidestep large drawdowns during two major bear markets. The lesson is that if conditions are not right, or the return/risk is not sufficiently favorable, don't do anything. Beware of taking dubious trades out of impatience.
Joel Llanillo
I have the one by Magee.
It's divided into 2 parts. Yung first part, puro theory ulit on patterns. Yung second part, more on how to trade the patterns, and the usual, money management and portfolio management.
I like the second part.
Tell me if you can't find a copy in the net. Let's find a way to send it to you. Medyo malaki yata yung file so baka di pwede iattach sa email.
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Joel Llanillo
Please see attached. It's a nice list to look at when you find yourself out
of books to read. :)
In case you're wondering, I have no plans on taking those certification
exams. Prop trading lang ako.
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williamlimtan
mickymac
williamlimtan
Thanks Sir Mikey.
williamlimtan
Joel,