wow, great organized information. finally someone who gets straight to the point and explains the strategy or at least an example of how to go about creating a strategy. Thank you for not wasting my time like most other videos!!
I love this. Thank you so much for putting this together. I can't tell you how helpful your channel is. Listening and taking advice from people that actually know what they are talking about is GOLD :)
I love how people use shorter timeframes because they believe it will lead to 'faster money'. There are day traders or news event traders who are great at what they do but it is high stress and a commitment I don't think the average trader is willing to make.
Thank you really helpful video but Woooow is it really necessary to test trade your strategy for 2 YEARS before using it comfortably ? I feel like 1-2 months should be largely enough if you take a trade every other day what do you think ? Thanks
Hey Slim, thanks for the comment and yea that's a good question. The short answer is, the more data you have the better. The truth is, even 2 years of data making a trade every other day is only going to give you a bit over 200 trades for your sample size. I know a lot of quantitative traders who would dismiss that all together and demand 1,000 or more occurrences before they even begin to think about going live with a strategy. It's hard to give an exact number, but certainly, you would want at least hundreds of trades to get some statistical confidence and a variety of market environments/conditions to truly asses the validity of a strategy. Could you start with less? Sure. Would more be better? Always. Hope that helps!
As a mechanical engineer who places my faith in certain designs based on statistical success and failures, I love seeing trading being explained this way. So much more clear than most people who seem to dumb it down for people, which never gets the true point across.
Sideways rangebound up and down markets tend to be the best profile for quick mean-reverting strategies. Buy low, sell high, go for quick targets and don't chase extremes, fade them.
When day trading or swing trading, what is the best investment vehicle you use for tax efficiency purposes? I can imagine someone swing trading 10-20 times a month can take quite a hit for taxes. What’s the best account to balance out the capital gains taxes? Thank you, big fan! 👏🏼
Hey Nicholas, great comment, yes you are spot on, active trading strategies can have a high impact come tax time. I just recorded a video on this topic, check this out: th-cam.com/video/8dPat3gYFv8/w-d-xo.html
When he said never risk more than 1% per trade, is it 1% of the total capital or the 1% of the trade itself? Stop loss of 1% is so tight for me if its per stock trade.
That would be 1% of total capital. So a simplified example, if you're stop loss is 10% away in the trade, your total position size allocated would be 10%.
Overall this is awesome! Great presentation on video and a further explanation on comment section for the confusing part. Thank you this was really helpful!
The point of learning how to trade is to make the risk factor less, make it as little of a gamble as possible. You clearly don’t know the fundamentals of trading so you’re willing to get into anything that will MAYBE make you money. It’s okay you’ll learn.
@The Contemplated Life - You must be a democrap. Rude? What I expressed was an opinion to the channel. There are so many opinions as to what is a valid trading practice. What exactly in your raging opinion was rude in what I said. Your stupidity and ignorance is way to common with you woke fools. I can't make a simple statement? People like you need to be ignored.
The trade setup used as an example in this video was just for illustration purposes to demonstrate how to go about developing a trading strategy. The rules outlined may or may not be profitable as is.
Great video but one question. I can look at a stock chart from the past and see this pattern, but how does one apply that to present time. To me, it seems like you’d have to watch a stock chart all day every day waiting for the candles in this pattern develop. This goes with any strategy not just the one in this video. Please let me know what I’m missing. Other than that enjoyed the video!
Hey Cory, yes you are touching on a topic we care a lot about, which we often to refer to as "maximizing your screen-time adjusted returns". The short answer is: extending your time-frame, and automating the scans and alerts for these rules/patterns is something you'll definitely want to look into so you don't have to stay glued to charts all day. Here's an article we recommend on this topic: www.thetraderisk.com/how-to-maximize-your-screen-time-adjusted-returns/
Hiya, I have another question: At the moment i have a relatively small trading account so i am trading small size but find i am quite limited in the stocks i can buy. My idea is to save £1,000 a month and put it into my account every month ( money i can afford to lose /risk ), but have now encountered a dilemma. At the moment i am -2.7% of my overall account. What happens if i add money into my account, i will be up positive percentage? How will i know if i am up on the year/or performing well or not if i keep adding funds? Is there a way round this....Thanks :)
Hi Rylan, this will be broker specific, but everyone i've worked with has the ability to generate performance reports that do not factor in deposits/withdraws into the results. In fact, this is necessary come tax time for them to know what your actual gains/losses were based on pairing up your trades. So short hand answer is to keep a spreadsheet yourself every time you deposit, otherwise, contact broker and/or figure out how to generate trading reports online.
I'm in the very beginning stages of trading and found your information extremely helpful. I was hoping you could clarify risking no more than 1 percent. Should I set a stop loss that is 1% percent lower than my entry point? To a novice like myself it seems like you would be cutting your loses far too early.
Glad you found the video helpful! If you're putting your entire account balance into a single trade, then yes, you would need a 1% stop loss. However if you only put 10% of your account balance into a single trade, then you could use a 10% stop loss while still maintaining your 1% account risk limit. Check out this article: www.thetraderisk.com/how-to-position-size-when-swing-trading/ for more examples and then this position size calculator tool: www.thetraderisk.com/product/position-size-calculator/
Great video, nicely presented. How did you become so knowledgeable? Did you take a course or just piece together things from a whole bunch of different sources etc.?
Thank you, glad it was helpful. No formal training or courses, just 10 years of really digging in deep nonstop on markets, trading, and all related topics. Lots of books, networking, research and most of all trial and error, and accumulating screen time.
Good question, ATR is Average True Range which is an indicator that measures a stock's volatility. ATR tells us what is the expected movement (range) of a stock given its recent trading history. EMA is Exponential Moving Average. This is an indicator that plots a weighted moving average of a stock based on its recent closing prices. I wrote a guide explaining what moving averages are and how they can help you trade here: www.thetraderisk.com/how-moving-averages-can-simplify-your-trading/
Hey, well done thank you so much!! Do you know what system do you or what can I use to tell how much the stock that I’m trading is going up-or down by ?
Not totally sure I understand the question, but try looking at the tools & software section on our trading resources page to see if you find something that can help: www.thetraderisk.com/trading-resources/
Hi , What does it mean by - Never enter more than 20% of total capital per trade? Is that the same as risking 20% per trade? On the slide @42min it says - Never risk more than 1% per trade & Never risk more than 20% of total capital. I have heard this before a few times but never understood what it mean....... Any examples will be appreciated! Thanks and Great Video
Rylan, thanks for writing and good question. Yes, there is a difference between the amount of risk you’re willing to take on a trade versus the amount of capital invested in the trade. Here’s an example. Let’s say you have a $10,000 trading account and you want to risk 1% per trade, and never more than 20% of capital allocated to any one trade. That means your risk per trade would be $100 and your total capital invested into any one idea would be 2,000. If you bought stock XYZ at $50 and put a stop at $49 that means to achieve your $100 in risk, you would need to purchase 100 shares. However, 100 shares at $50 would cost you $5,000 which would be 50% of your total account capital. By enforcing both rules you get a more well-rounded risk management process which can save you in the event you get stuck in some catastrophic overnight gap down in a single risky stock that you're holding onto. Hope that helps.
Rylan DeAngelis 20%?? WHOA. Dont u mean no more than TWO Percent. 20% would be ok i guess....assuming you have several million in capital 😅 KIDS, DONT RISK MORE THAN 1-2% PER TRADE!
This is glorious, I've been looking for "trading for beginner" for a while now, and I think this has helped. Have you ever come across - Annahiy Stockify Sabinianus - (just google it ) ? Ive heard some interesting things about it and my m8 got great success with it.
Hey Bryan, try out the following TC2000 PCF code for this criteria: This will give you the first close back over the 20EMA and yesterday's highs: (C1 < XAVGC20.1) AND (C > XAVGC20) AND (C > H1) And then this is a simple uptrend filter you can include which returns stocks trading above a 50SMA which is above the 150SMA which is above the 200SMA: (C > AVGC50) AND (AVGC50 > AVGC150) AND (AVGC150 > AVGC200)
I been doing 20% of whole capital... because 3% of $10,000 is $300, there should be a min to pay off your trading fees or trading commissions, I pay $20 trading fee for a round trip, so $20 is 6.7% of $300, to break even I gotta get over 6.7% If you make a lucky 30% gain you make $390 minus $20 for trading fee is $370 You loose 6.7% If you invest $10k and get 30% that's $3000 and minus $20 for trading fee, is $12,980 so your only loosing .02% on fees
I do have a breakdown of my own strategy including a list of every trade taken (entry, exit, etc.) since 2015. Check out these two pages: www.thetraderisk.com/swing-trading-framework/ and www.thetraderisk.com/trading-performance/
Very very boring. In the beginning I thought I found what I was looking for, but really I didn’t learn anything new here. Basically everything was elementary
I would consider the rules and conditions we share for a sample strategy simple. But yes, the process of backtesting and actually validating those rules, does require work. There's no easy shortcuts that I am aware of unless you have some strong programming chops or access to expensive backtesting software.
wow, great organized information. finally someone who gets straight to the point and explains the strategy or at least an example of how to go about creating a strategy. Thank you for not wasting my time like most other videos!!
Thanks for the nice comment Anthony, glad you enjoyed!
Lol
Excellent. The organization of the material is impecable. It obviously comes from an organized mind.
Thank you Nelson, I appreciate the kind comment.
Well said!
😂😆😆😆😆😆
I love this. Thank you so much for putting this together. I can't tell you how helpful your channel is. Listening and taking advice from people that actually know what they are talking about is GOLD :)
Glad you enjoyed, thank you!
Finally, some REAL solid advice! By contrast, it shows up (most) other trader TH-camrs.
Thank you, much appreciated.
I rarely comment, but this video is wonderful. Well done.
I appreciate that Jon, glad you enjoyed and thanks for the nice comment!
Swing Trading 101
This is a great 3 credit college course.
appreciate it
Hi thank you, for the information. Happy Holidays to you. 😊
Thanks you too!
Well done thanks!!
Thank you Jake!
Very comprehensive guide, I'll be trying this is my paper trading account 👍
Yay!! I’m a champ😀
Amazing tutorial!! . . Thanks for that great contribution.
Glad you enjoyed it!
great vid, I'm a proud swing trader
This video is a gold mine🤝
You covered almost everything... some really good tips... excellent video
999999999999999opppl9p
Very Very Sensible and practical.Sounding lile a seasoned pro.Thanks
Great insight on swing trading.
Thanks Tahir!
Thank you! It is a very well made video. Very informative.
Glad you enjoyed it!
I love how people use shorter timeframes because they believe it will lead to 'faster money'. There are day traders or news event traders who are great at what they do but it is high stress and a commitment I don't think the average trader is willing to make.
SO MUCH GOLD!!! Just followed you on twitter.
Glad you enjoyed and thanks for the follow!
Watching two days before 2021 👍
Great content. Very clear and consice!
Nice Video
fantasic presentation.
Thanks Krish
good
very well explained thanks
Excellent class thank you!
thanks for the great video. ! just came across it. For the stop loss of 1 ATR, is tthe 1 ATR based on 14 days ?
You're welcome and yes this example, 14-day lookback ATR
Swing Trading 101
This is an ideal 3 Credit college course.
Thank you really helpful video but Woooow is it really necessary to test trade your strategy for 2 YEARS before using it comfortably ? I feel like 1-2 months should be largely enough if you take a trade every other day what do you think ? Thanks
Hey Slim, thanks for the comment and yea that's a good question. The short answer is, the more data you have the better. The truth is, even 2 years of data making a trade every other day is only going to give you a bit over 200 trades for your sample size. I know a lot of quantitative traders who would dismiss that all together and demand 1,000 or more occurrences before they even begin to think about going live with a strategy.
It's hard to give an exact number, but certainly, you would want at least hundreds of trades to get some statistical confidence and a variety of market environments/conditions to truly asses the validity of a strategy. Could you start with less? Sure. Would more be better? Always. Hope that helps!
As a mechanical engineer who places my faith in certain designs based on statistical success and failures, I love seeing trading being explained this way. So much more clear than most people who seem to dumb it down for people, which never gets the true point across.
Right on, thanks Josh!
So is hypothetical a rapid up and down market would be good to make small return to start
Sideways rangebound up and down markets tend to be the best profile for quick mean-reverting strategies. Buy low, sell high, go for quick targets and don't chase extremes, fade them.
When day trading or swing trading, what is the best investment vehicle you use for tax efficiency purposes? I can imagine someone swing trading 10-20 times a month can take quite a hit for taxes. What’s the best account to balance out the capital gains taxes? Thank you, big fan! 👏🏼
Hey Nicholas, great comment, yes you are spot on, active trading strategies can have a high impact come tax time. I just recorded a video on this topic, check this out: th-cam.com/video/8dPat3gYFv8/w-d-xo.html
Futures beats stocks
When he said never risk more than 1% per trade, is it 1% of the total capital or the 1% of the trade itself? Stop loss of 1% is so tight for me if its per stock trade.
That would be 1% of total capital. So a simplified example, if you're stop loss is 10% away in the trade, your total position size allocated would be 10%.
Overall this is awesome! Great presentation on video and a further explanation on comment section for the confusing part. Thank you this was really helpful!
@@syentoporsyento3480 Glad to hear it, thanks!
Thanks for your video, in the EMA20, do you use high, open, or low?
Thanks! In this video we are just using the EMA calculated on closing prices.
i always risk my whole bankroll. I love to gamble
how long have you been a trader?
10 years
Mike Gargano the better question is: how big is your bank roll 😅
You trade your troll account? :D
The point of learning how to trade is to make the risk factor less, make it as little of a gamble as possible. You clearly don’t know the fundamentals of trading so you’re willing to get into anything that will MAYBE make you money. It’s okay you’ll learn.
Well you have managed to complicate my Day Trade/Swing Trade formula. I think I will stick to what I do.
Sorry for the confusion, let us know if we can help clarify anything.
@The Contemplated Life - You must be a democrap. Rude? What I expressed was an opinion to the channel. There are so many opinions as to what is a valid trading practice. What exactly in your raging opinion was rude in what I said.
Your stupidity and ignorance is way to common with you woke fools. I can't make a simple statement? People like you need to be ignored.
add a momentum and a volatility indi, you have areal deal
What is our best case scenario over a year? how are your results? 8% -40%? Thanks
The trade setup used as an example in this video was just for illustration purposes to demonstrate how to go about developing a trading strategy. The rules outlined may or may not be profitable as is.
Can you share some books on swing trading
Yes I've been meaning to update my recommended reading list. Here's my old list which I'll plan to update soon: thetraderisk.com/trading-books
Thanks!
Where is the link ?
What link are you looking for?
Great video but one question. I can look at a stock chart from the past and see this pattern, but how does one apply that to present time. To me, it seems like you’d have to watch a stock chart all day every day waiting for the candles in this pattern develop. This goes with any strategy not just the one in this video. Please let me know what I’m missing. Other than that enjoyed the video!
Hey Cory, yes you are touching on a topic we care a lot about, which we often to refer to as "maximizing your screen-time adjusted returns". The short answer is: extending your time-frame, and automating the scans and alerts for these rules/patterns is something you'll definitely want to look into so you don't have to stay glued to charts all day. Here's an article we recommend on this topic: www.thetraderisk.com/how-to-maximize-your-screen-time-adjusted-returns/
So do you make pretty good money doing swing trading?
Yes you can make good money, but you can all lose good money fast. I've done my fair share of both.
Awesome
Hiya, I have another question:
At the moment i have a relatively small trading account so i am trading small size but find i am quite limited in the stocks i can buy.
My idea is to save £1,000 a month and put it into my account every month ( money i can afford to lose /risk ), but have now encountered a dilemma. At the moment i am -2.7% of my overall account. What happens if i add money into my account, i will be up positive percentage? How will i know if i am up on the year/or performing well or not if i keep adding funds?
Is there a way round this....Thanks :)
Hi Rylan, this will be broker specific, but everyone i've worked with has the ability to generate performance reports that do not factor in deposits/withdraws into the results.
In fact, this is necessary come tax time for them to know what your actual gains/losses were based on pairing up your trades. So short hand answer is to keep a spreadsheet yourself every time you deposit, otherwise, contact broker and/or figure out how to generate trading reports online.
I have a 100k to invest....do I just wire it to you?
Free 100K? I'll take it! 😀
The thing is that you know its an uptrend when at least 3 swings has occur. So, maybe there is no more gaz in the tank...
I'm in the very beginning stages of trading and found your information extremely helpful. I was hoping you could clarify risking no more than 1 percent. Should I set a stop loss that is 1% percent lower than my entry point? To a novice like myself it seems like you would be cutting your loses far too early.
Glad you found the video helpful! If you're putting your entire account balance into a single trade, then yes, you would need a 1% stop loss. However if you only put 10% of your account balance into a single trade, then you could use a 10% stop loss while still maintaining your 1% account risk limit. Check out this article: www.thetraderisk.com/how-to-position-size-when-swing-trading/ for more examples and then this position size calculator tool: www.thetraderisk.com/product/position-size-calculator/
@@TradeRisk Thank you. Once again very helpful.
Great video, nicely presented. How did you become so knowledgeable? Did you take a course or just piece together things from a whole bunch of different sources etc.?
Thank you, glad it was helpful. No formal training or courses, just 10 years of really digging in deep nonstop on markets, trading, and all related topics. Lots of books, networking, research and most of all trial and error, and accumulating screen time.
what is ATR what is EMA standfor
Good question, ATR is Average True Range which is an indicator that measures a stock's volatility. ATR tells us what is the expected movement (range) of a stock given its recent trading history.
EMA is Exponential Moving Average. This is an indicator that plots a weighted moving average of a stock based on its recent closing prices. I wrote a guide explaining what moving averages are and how they can help you trade here: www.thetraderisk.com/how-moving-averages-can-simplify-your-trading/
sweet thanks
Do you have a video that further explain ATR and how it was used or apply in actual trading?
Hey, well done thank you so much!!
Do you know what system do you or what can I use to tell how much the stock that I’m trading is going up-or down by ?
Not totally sure I understand the question, but try looking at the tools & software section on our trading resources page to see if you find something that can help: www.thetraderisk.com/trading-resources/
Hi , What does it mean by - Never enter more than 20% of total capital per trade? Is that the same as risking 20% per trade?
On the slide @42min it says - Never risk more than 1% per trade & Never risk more than 20% of total capital.
I have heard this before a few times but never understood what it mean....... Any examples will be appreciated!
Thanks and Great Video
Rylan, thanks for writing and good question.
Yes, there is a difference between the amount of risk you’re willing to take on a trade versus the amount of capital invested in the trade.
Here’s an example.
Let’s say you have a $10,000 trading account and you want to risk 1% per trade, and never more than 20% of capital allocated to any one trade.
That means your risk per trade would be $100 and your total capital invested into any one idea would be 2,000.
If you bought stock XYZ at $50 and put a stop at $49 that means to achieve your $100 in risk, you would need to purchase 100 shares. However, 100 shares at $50 would cost you $5,000 which would be 50% of your total account capital.
By enforcing both rules you get a more well-rounded risk management process which can save you in the event you get stuck in some catastrophic overnight gap down in a single risky stock that you're holding onto.
Hope that helps.
The Trade Risk : Thank you for a great explanation :)
Rylan DeAngelis 20%?? WHOA. Dont u mean no more than TWO Percent. 20% would be ok i guess....assuming you have several million in capital 😅 KIDS, DONT RISK MORE THAN 1-2% PER TRADE!
This is glorious, I've been looking for "trading for beginner" for a while now, and I think this has helped. Have you ever come across - Annahiy Stockify Sabinianus - (just google it ) ? Ive heard some interesting things about it and my m8 got great success with it.
do u have private group?
Have an email weekly newsletter and offer some trading services, check out www.thetraderisk.com for links and info
How do find or scan for stocks that meet this criteria ?
Hey Bryan, try out the following TC2000 PCF code for this criteria:
This will give you the first close back over the 20EMA and yesterday's highs:
(C1 < XAVGC20.1) AND (C > XAVGC20) AND (C > H1)
And then this is a simple uptrend filter you can include which returns stocks trading above a 50SMA which is above the 150SMA which is above the 200SMA:
(C > AVGC50) AND (AVGC50 > AVGC150) AND (AVGC150 > AVGC200)
I been doing 20% of whole capital... because 3% of $10,000 is $300, there should be a min to pay off your trading fees or trading commissions, I pay $20 trading fee for a round trip, so $20 is 6.7% of $300, to break even I gotta get over 6.7%
If you make a lucky 30% gain you make $390 minus $20 for trading fee is $370
You loose 6.7%
If you invest $10k and get 30% that's $3000 and minus $20 for trading fee, is $12,980 so your only loosing .02% on fees
Have you try Robinhood there's no trading fees
Certified legit
I only trade ES FUTURES
Hey Broo Please Share Your Own Money Management And Own Strategy.
I do have a breakdown of my own strategy including a list of every trade taken (entry, exit, etc.) since 2015. Check out these two pages: www.thetraderisk.com/swing-trading-framework/ and www.thetraderisk.com/trading-performance/
super
excellent
Make trade simple with only one or two indicators. Thats my rule of success.
Smart! I like it
"what a piece of shit system I have" made me laugh, brilliant. Great vid, thank you for your time and effort.
I had no idea Kevin Costner was a trader.
Did you cash in on GME, ,did your system work? lol
None of the systems we run had signals for GME, so no trading for that stock.
👍
TRADE
obos
Very very boring. In the beginning I thought I found what I was looking for, but really I didn’t learn anything new here. Basically everything was elementary
Sorry to hear it! What info/topics were you looking for? We're always open for more content ideas.
SLATT*'oooo
You lost me during the end :(
Robustness
Sir, you need to work on being more succinct.
i fel asleep
you call this simple?
I would consider the rules and conditions we share for a sample strategy simple. But yes, the process of backtesting and actually validating those rules, does require work. There's no easy shortcuts that I am aware of unless you have some strong programming chops or access to expensive backtesting software.
This is incredibly simple. If it isn't to you, you need to spend more time studying TA and looking at charts.