When Trading Meets DividendWarrior

[MisterLim001]

Honestly mate, I think it's nonsensical.

Dividend investment and intraday punting are two entirely different skill-sets. They're literally polar opposites. The sort of people who want to park their cash in dividend stocks and reinvest it every so often are the opposite of the sort of people who want to spend all day in front of a screen trying to scrounge up a few ticks here and there.

Second thing: intraday trading doesn't give you a steady income stream. Saying "scalp for $25 a day" sort of assumes you'll make a regular amount of money every day, and that's just disastrously wrong.

Third thing: once the cash is sitting in dividend stocks, you can't use that cash to day-trade unless your broker offers margin trading. And if you only have a few thousand dollars, the brokerage costs ($20-$30 a round trip) will incinerate you.

This is a terrible idea. Sorry to be so blunt, but that's the way it is.

what do you suggest then?

 

[CookieMonsta88]

What you believe is your day trading or scalping edge is beyond my comprehension.

Well then enlighten me what constitutes an edge then? Because what I stated above is what I learnt from analyzing statements, text and interviews from people who have a credible p&l and even headed funds, and also what i mentioned is in this book called trading and exchanges: market microstructure for practitioners.

also pretty much anyone can say "If you don’t know what an edge is or what your edge is, you don’t have one." how do i know you even know how to measure an edge, with respect to the trading method itself, as there are many many kinds of trading methods, discretionary, mechanical as well as statistical, and also those which use a valuation model, and every single of this stems from your knowledge of the structure and workings of the markets itself.

 

[kazejin]

Haha, i like the phrase "If you don’t know what an edge is or what your edge is, you don’t have one."

In trading, it would not be wise to define your edge to others though, since you will likely lose it.

 

[wahkao3]

That sound similar to saying that since FA and TA are different types of analysis, by combining them into FATA, you have a 'sure win' strategy?

eh, this sure TA+FA strategy who teach? i want to learn
my own TA+FA is not sure win

 

[Shiny Things]

what do you suggest then?

Depends what the guy's good at. If he really thinks he's a hot-shot trader who can make 1% a day (that's 1200% a year), then it doesn't make sense to tie up a chunk of his money in dividend stocks that only throw off 5-10% a year.

If he's not really a good trader, then he's a lot better off just doing the "dividend stocks" part.

 

[CookieMonsta88]

I day trade stock index futures, which represents a basket of stocks. I do not trade individual stocks, spot FX or options. I am unable to enlighten you on what constitutes an edge for the financial instruments that I do not trade.

What a trading edge is to me, I learned from analyzing live price actions and my own trades over the last 10 years.

For Nikkei 225 futures, which I have day traded since the start of SGX electronic futures trading, being in front of the bid or ask queue used to provide the scalper with a trading edge.

Some experienced, consistently profitable traders that I have interacted with over the years have some sort of mental/psychological edge, which I am unable to describe with words.

yes, price action is the observation, and thats the feel of the tape or reading the tape, as for whats happening behind the scenes and what the intention of the players who can affect price is what im describing in the first place, and basically what you are saying is you are analyzing price action and trying to uncover the tracks of the dominant force in the market currently.

ever feel like when you are trading towards some japanese figures release, sometimes price action retraces? probably people covering their trades waiting for the figures release, or if near the opening hours, you get a counter trend move, then the market trends in its intended direction for the rest of the morning session, or maybe even in the afternoon session? you would see a pinbar probably then a reversal, why that pinbar? maybe market makers gunning stops in preparation for the market open when order flow is coming in.

what those successful traders edge, is feeling the markets, which is an innate, intuitive understanding of how the other bigger players are entering the markets and attacking the trend together with them, and understanding if the players are trying to gun stops and establish or close positions, otherwise they probably are big enough and they need to move volume and may need to engage in the stop hunting itself, to establish their own positions.

if you have the privilege to see how dealers trade in OTC markets, they have the order books, and they do the stop hunts to provide you with good quotes if you are right on the trend, while keeping their risk low, otherwise they themselves would quickly be financially decimated. also their edge is they are in the center of the orderflow and information flows, and im inferring from price action what dealers and big players are doing, and hence be with the trend, if someone is busy running stops, you know something is up, either something big is coming, they wanna get in first, or something big is coming, better exit first, but their position sizes are so huge, they need stop clusters to get out.

if price action is jittery while the rest of the market is moving smoothly, (at least with forex since correlation across the pairs shows relative strength of each currency), i would be thinking someone is accumulating or distributing into the current flow and i want to enter a small entry together with the accumulation or distribution, and then attack into it when its proven right.

if you understand market manipulation and painting the tape, you would know that especially in illiquid markets and penny stocks its very easy to push price around, and even make indicators work the way u want them to and paint a stochastic 80%, if you are the largest cap in the market at that time, or if you want to paint a pinbar you can too, only that in highly liquid markets with huge huge amount of orders, it makes it difficult for manipulators to do stuff like this without an insane amount of money.

that is the analysis which brings about the edge, which is derived from understanding market microstructure, the participants their behavior.

 

[Knight_Rider]

Am edge means the charts talk to you and tell you what they doing next. Be it stop hunt, bear/bull trap or what direction they are heading next. It means feeling................

Like Abenomics then buy GBPJPY lah that has gone up 800+ pips. Dun know why some people is still complaining when there is free money to be given.

What is unable to describe with words?

 

[focus1974]

The edge is "I Am Ti Kong Kia" Rules all!
I'd rather be lucky than smart..

 

[ohgin123]

I was thinking of a method that can actually kill 2 birds in 1 stone.

Say you spot a stock that is commodity dependant but it's cheap at the same time. What you can do is buy when it goes low and sell when it goes high.

The thing is, if the stock happens to go lower, at least you can keep it for long term since it's low anyway. If it goes high and meet your tp price at that time then sell.

i think you need a low cost broker to do this.

Of course the disadvantage to this is, if the stock goes even higher, you will not be too happy.

But then, near term, I am pretty sure this commodity will not really shoot up so instead of waiting for it to shoot up, maybe i can earn some money at the mean time.

Will leave it to you guys to guess which commodity this is.

 

[wahkao3]

I was thinking of a method that can actually kill 2 birds in 1 stone.

Say you spot a stock that is commodity dependant but it's cheap at the same time. What you can do is buy when it goes low and sell when it goes high.

The thing is, if the stock happens to go lower, at least you can keep it for long term since it's low anyway. If it goes high and meet your tp price at that time then sell.

i think you need a low cost broker to do this.

Of course the disadvantage to this is, if the stock goes even higher, you will not be too happy.

But then, near term, I am pretty sure this commodity will not really shoot up so instead of waiting for it to shoot up, maybe i can earn some money at the mean time.

Will leave it to you guys to guess which commodity this is.

gold

 

[tradingwithrayner]

I day trade stock index futures, which represents a basket of stocks. I do not trade individual stocks, spot FX or options. I am unable to enlighten you on what constitutes an edge for the financial instruments that I do not trade.

What a trading edge is to me, I learned from analyzing live price actions and my own trades over the last 10 years.

For Nikkei 225 futures, which I have day traded since the start of SGX electronic futures trading, being in front of the bid or ask queue used to provide the scalper with a trading edge.

Some experienced, consistently profitable traders that I have interacted with over the years have some sort of mental/psychological edge, which I am unable to describe with words.

Any traders who traded the Nikkei since it's inception on sgx has my respect.

Definitely has evolved over the years and seen traders who made millions during 07-09 period and how they folded up eventually over the last couple years.

Any chance you are trading from a local trading arcade?

Rayner

 

[fury89]

yea, exactly what i was trying to express

I think can leh but not easy when. U have a full time job
Work Liao go home trade us mkt
Then no need slp

But depending on the wat u r using to trade
The overbite financing commission and other misc charges will take a portion of ur earnings

 

[CookieMonsta88]

I think can leh but not easy when. U have a full time job
Work Liao go home trade us mkt
Then no need slp

But depending on the wat u r using to trade
The overbite financing commission and other misc charges will take a portion of ur earnings

well, i have been doing it for 1year plus already, so maybe im used to it, but i change the method abit, i trade starting from US morning open, 8am, so its about 8pm or 9pm SGT, but i trade the hourly swings with 5m timeframe as my entry signal, while keeping in mind the daily direction as the major trend. so say the audusd, the fundamentals currently support 0.7500 as the ideal price, as mentioned by RBA about afew weeks ago, the moment 0.8200 was breached, i know the big guys are in there so i went along with them, their defense area, 0.8200 to 0.8175, and starting from 0.8200, i have been shorting/fading the hourly swing highs, with 5mins as indication of ending of the swing highs, and i use that as entry point, then once it goes into profit i just set stoploss as a way to manage the position overnight while sleeping soundly in bed, then next day i just see if a swing low is established, i just close, and wait for another swing high to fade. but because of christmas, its a really thin market, so im easing off till after jan 2015 before continuing the trading ops.

so in short the macro view is audusd gonna go 0.7500 with a high probability, both fundamentals of central bank sentiment as well as technicals of large specs are supporting the bear trend, the trading tactics will be to short the hourly swing highs with some leverage but account adjusted losses will be capped at desirable amount of risk, so if i were working, i will use the hourly swing method to trade and hold overnight and during work also, but if i were active trading, i will scale into and out of trades.

the danger zone will be above 0.8200, if it breaks above 0.8200, we could be looking for a bullish sentiment for audusd, so if u must have protection, buying calls above 0.8200 to protect ur shorts will be good, and when they are moving away from 0.8200 to lower say 0.8000, we can switch them to call credit spreads and enhance our returns.

well the commissions don't hurt me as much since its forex so the commissions are really competitive, i don't really trade stocks, not volatile enough, so i just stick to forex and i at least understand forex fundamentals better so, no stocks for me currently.

i feel the key is, unless u are day-trading, u can afford some slack, once u enter an entry, all thats left to do is let the market prove u right or wrong, and simply sit tight and wait it out.

gotta find ur niche which fits ur life style

 

[wahkao3]

well, i have been doing it for 1year plus already, so maybe im used to it, but i change the method abit, i trade starting from US morning open, 8am, so its about 8pm or 9pm SGT, but i trade the hourly swings with 5m timeframe as my entry signal, while keeping in mind the daily direction as the major trend. so say the audusd, the fundamentals currently support 0.7500 as the ideal price, as mentioned by RBA about afew weeks ago, the moment 0.8200 was breached, i know the big guys are in there so i went along with them, their defense area, 0.8200 to 0.8175, and starting from 0.8200, i have been shorting/fading the hourly swing highs, with 5mins as indication of ending of the swing highs, and i use that as entry point, then once it goes into profit i just set stoploss as a way to manage the position overnight while sleeping soundly in bed, then next day i just see if a swing low is established, i just close, and wait for another swing high to fade. but because of christmas, its a really thin market, so im easing off till after jan 2015 before continuing the trading ops.

so in short the macro view is audusd gonna go 0.7500 with a high probability, both fundamentals of central bank sentiment as well as technicals of large specs are supporting the bear trend, the trading tactics will be to short the hourly swing highs with some leverage but account adjusted losses will be capped at desirable amount of risk, so if i were working, i will use the hourly swing method to trade and hold overnight and during work also, but if i were active trading, i will scale into and out of trades.

the danger zone will be above 0.8200, if it breaks above 0.8200, we could be looking for a bullish sentiment for audusd, so if u must have protection, buying calls above 0.8200 to protect ur shorts will be good, and when they are moving away from 0.8200 to lower say 0.8000, we can switch them to call credit spreads and enhance our returns.

well the commissions don't hurt me as much since its forex so the commissions are really competitive, i don't really trade stocks, not volatile enough, so i just stick to forex and i at least understand forex fundamentals better so, no stocks for me currently.

i feel the key is, unless u are day-trading, u can afford some slack, once u enter an entry, all thats left to do is let the market prove u right or wrong, and simply sit tight and wait it out.

hows your result so far? what is your annualized return?

 

[wahkao3]

i don't really trade stocks, not volatile enough, so i just stick to forex and i at least understand forex fundamentals better so, no stocks for me currently.

FOREX even less volatile leh.
the USD/SGD only move 1-2% after 3 months.

u meant to say liquid?

Got liquidity liao, you can leverage gao gao to effectively make the trade volatile?

 

[CookieMonsta88]

hows your result so far? what is your annualized return?

break even

 

[wahkao3]

6. Trends really are your friend. I know, this is a common investing rule and I’m supposed to share the top secret things I’ve learned. The only problem is it isn’t as easy as it looks to stay in a trend. Look at what’s happened since late ’12, we’ve had one of the better trending markets ever. None the less, we’ve heard everything from new highs in margin debt will bring a crash, to Cyprus in turmoil will bring world markets crashing down, to the recent ‘we look just like 1929’ charts everyone was worried about back in February. Through it all, none of it mattered. The upward trend that has been in place for years has prevailed. The SPX has been above its 200-day moving average for nearly 400 days. This sounds like a lot I know, but the all-time record is 525 days. So could this bull market stick around a lot longer than people think? I have no clue, but I wouldn’t bet against it either.

trend is your friend yes, only if you got in before the trend forms

 

[wahkao3]

break even

wasted leh. no income how u survive?
u got normal day job for income?

 

[CookieMonsta88]

FOREX even less volatile leh.
the USD/SGD only move 1-2% after 3 months.

u meant to say liquid?

Got liquidity liao, you can leverage gao gao to effectively make the trade volatile?

the volatility has to be viewed in time frames, stocks is more volatile across higher timeframes, but forex is more volatile across the lower time frames, so it depends on ur tenure and scope of management as well as management strategies to see if which one is more effective for u to manage.

and i don't mean liquidity, having more liquidity reduces volatility as more orders need to be executed to sap up those liquidity, which then means price moves lesser with more liquidity to 1 side of the market. if anything, forex is extremely liquid and that is why the overall moves are lower in higher timeframes, but the lower time frames, the moves can be more volatile intra-day.

and primarily, u must also understand what makes stocks move and what make forex move, the drivers are different and the properties of these markets are different, forex is very range bound across higher time frames, while stocks has a more momentum push like moeve, and generates a long term upwards biase across 5-10 years

 

[CookieMonsta88]

wasted leh. no income how u survive?
u got normal day job for income?

this is just for me to finalize my method only, i have been jumping methods for 5-6 months to find 1 that suits me and my lifestyle and familiarize the market environment each style is suitable for, and the results is the break even on my p&l, im working in the day, while trading at night