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             Precision Trading Systems gives you the truth about of day trading   Questions Answers & FACTS

 

Is it possible to win regularly at day trading?..............Yes, but...

 

The first things you won't want to know are these shocking facts.

 

  1. 90% of day traders lose money in the long run.

  2. The majority of day traders believe they will win when they get their "system" organised

  3. They are attracted to the excitement of watching real time prices and charts and the adrenaline rush that goes with it

  4. If day traders had zero commissions then many of them would be in profit over the long term

So now we will examine the points above in closer detail.

 

            1.   90% of day traders lose money in the long run.

 

Is this actually true? Yes it is. Most of the money they lose is won by the top 10% of traders and the rest of their losses generally goes down the drain in commission costs as a result of their over active trading styles.

 

2.  The majority of day traders believe they will win when they get their "system" organised

 

Why do these day traders expect to win? There are several answers to this.

 

 

  • Software and system designers are aware the people are attracted to day trading and tailor their adverts to appeal to the masses

  • Some have the same tendencies as gambling addicts who lose money betting on baseball or horse racing, they will always have some winning bets and this reinforces their mistaken belief that they will win BIG

  • Most day traders do not have the patience to put in the work in researching their systems and techniques before they start and arrive at the trading scene helplessly under prepared.

  • Most do not have a hard and fast system that they stick to, and often break their own rules in a set of repeated errors over and over again.

  • Many lack the discipline to cut their losses fast and small, and take profits too soon.

           3. They are attracted to the excitement of watching real time prices and charts and the adrenaline rush with it

  • They feel important and flash when sitting in front of lots of flashing lights, bells and whistles

  • They believe they can make millions in a few hours just as those adverts lead them to believe.

  • They cannot hold any trades overnight because they deal much to big for their account size.

           4.   If day traders had zero commissions then many of them would be in profit over the long term

  • Many ( but not all ) day traders are quite good at timing, but trade too often and take such small profits that they lose in the long run.

  • Even when paying tiny costs, and using instruments with very tight spreads is not enough to save them from the pit of peril.

 

But surely there are some ways to win at day trading?  If the day trader is like the man below, then sadly he has no chance.

 

 

The average man doesn’t wish to be told that it is a bull or a bear market.

 

What he desires is to be told specifically which particular stock to buy or sell. He wants to get something for nothing.

 

He does not wish to work. He doesn’t even wish to have to think

 

    ---    Jesse Livermore   ---

 

Lets assume a day trader falls into category 4 and if he or she took out their costs from the book keeping, they would be profitable.

 

For example the day trader will be drawn primarily to leveraged products such as futures, commodities and forex where he can get $100,000 worth of action for about $2000 to $5000 margin, which makes him feel a sense of being a big shot trader.

 

First of all after he places a trade, he will be very very excited, nervous and full of fear because his trade is so big in relation to his account. He cannot hold his trade for long, because if it goes the wrong way it will cause him to wipe out his account or at the least, suffer a large loss..

With all this emotion comes many psychological influences, such as

  • Not being able to stick to the plan (if any) that he had before placing his trade.

  • The temptation to place his exit stop very tight, which will lead to most of his trades being stopped out just by the noise in the market.

  • Sitting on the edge of his chair with sweaty palms, which leads to a "trigger happy" scenario.

  • Taking profits far too early, as the money made is very large in proportion to his account...but

  • The losses are proportionally large and cause huge fears in the trader.

 

What can day traders do to improve their statistics in the long run?

 

The points below are again probably what you will not want to know..

  • Cut down on deal size, so each trade does not use such high leverage against your account. This will reduce stress and excitement which is what causes traders to make mistakes

  • Slow down your system, so that it produces less trades

  • If you target was to make 20 points or 20 pips and your stop loss was 10 points or pips, then simply increase these by the same amount so as your overall profit is great enough to nullify the effect of commission costs on your account.

  • Carry some smaller trades overnight if they are doing well. This will give you a chance to catch a bigger win than is possible from closing trades out at the end of the session

  • Finally and definitely the most important of all. BACK TEST your system to make sure it works including costs, and also figure if you will be able to stick to the finished system.

 

What can day traders do to reduce their systems trading frequency so that it can be profitable?

 

  • This can be done by increasing profit targets and stops to slow down the frequencies

  • Increase the time frame sampling intervals from 5 minute to 20 minute for example

  • By using a low frequency system like Mach-Trend to produce less trade signals

  • Wait patiently for the correct conditions that suit your system before placing trades.

 

                The Mach trend indicator is designed purely with reducing whipsaws and keeping YOU in the major trends, helping you to cut your dealing costs right down to a minimum.

 

The psychological aspects of day trading are very important to address.

 

  • Talk to other traders in great depth about the "emotional mistakes" you make in a form of counselling that will help to unblock your repeating errors.

  • Keep a diary of your good and bad points and work out ways to improve them.

  • Only trade when you are sure you are able to stay at the screen until the end of the session.

  • Placing a trade one hour before you are due to go out on a date is a recipe for disaster, and will also spoil your date

 

Remember that 90% of day traders lose and the money all gets won by the top 10%

 

Where is you position on that pyramid?

 

I sincerely hope you can improve it.

 

 

 

Systems, Indicators and user functions for Tradestation and Multicharts.

 

This collection of user functions and indicators below have been carefully assembled to provide a versatile tool kit for the advanced trader.

None of the items below have lots of flashing lights, bells or buttons as you find in the "Holy grail" type worthless advertisements, and all have been carefully chosen because they actually work as trading tools.

 

Some have been coded by myself while others are the work of some of the best technicians worldwide.

I have re-coded most of these into Easy language format. (ELA, ELS)

 

There are some free items here which you can try out by sending me a mail and specifying which ones you wish to try out. Of course if you require something that is not here I would be very pleased to hear from you.

 

If you need any indicator, functions or systems coded into Easy Language, Metastock, vb.NET or C# format, then feel free request it.

 

                                                                      Request FREE indicators or ask a question

 

Please sample my free products before buying so you can assess that my programming is reliable, stable and accurate in its execution. Roger

© Roger Medcalf 2005 - 2010 ... You may not reprint text or images without permission

Compatible with....

Indicator

Volume flow indicator (VFI)

Designed by Markos Katsanos this oscillator has many excellent qualities. Useful as a trend confirmation indicator, an overbought oversold oscillator, divergences between the price and the VFI are usually very reliable

VFI gets the vote of confidence from Precision trading systems as being a "must have" tool in the discerning traders kit

Please click below to see some more detailed examples of charts with the VFI plotted...More details and examples

 

FREE   Stocks, Futures, Bonds, Forex (needs volume to run)

 

 

Author: Markos Katsanos. (Open EL code)

Compatible with....          Indicator + function

Demand Index

An excellent oscillator that is versatile in its applications, computing its values from price and volume. It can be used as a divergence indicator and a trend following indicator. I have added a smoothing length feature to suit the needs of the individual user.

I find this indicator very useful for observing intra-day price action in actively traded stocks and futures...........More details and examples

FREE  Stocks, Futures, Bonds, Forex, Indices etc

Author: James Sibbet. ( Open EL code )

 

Compatible with....         Indicator + function

Precision Lagless Average

A Lagless moving average with no overshoot that outperforms all other known industry standard moving averages. Comes with features including length changing algorithms and an anti-reverse option to minimise over trading in congestion areas, the result of 9 weeks intensive and complex coding after someone told me that the Hull average was better than the Jurikes JMA. In one session I was able to improve on the Hull average, but it took me a lot longer to improve on the Jurik JMA offering.......More details and examples

 

Price $297 (Pay-Pal)  Buy this item

Stocks, Futures, Bonds, Forex, Indices etc

 

Author: Precision Trading Systems. (Protected EL code)

 

Compatible with....    Indicator + function + signal

Precision Stop

Trend following system and indicator that self adjusts its distance to suit noise levels and volatility factors, making it more "intelligent" than Parabolic SAR, or ATR type indicators.

Can be adjusted to suit any time frame from day-trading to long term trend following by adjusting MULTI settings, features include a neat max and min percentage distance setting to cater for individual tastes.

Takes the guess work out of knowing when the trend is up or down, based on your own input values.......More details and example videos

 

Price $125 (Pay-Pal)   Buy this item

Stocks, Futures, Bonds, Forex, Indices etc

 

Author: Precision Trading Systems. (Protected EL code)

Compatible with....          Indicator + function                                     Insync Index

A "consensus" oscillator that highlights trend turning points, computing its values from an array of standard oscillators such as RSI Stochastic and Money Flow index.

It is best applied to range bound markets rather than trending ones.

 

I have added a REALVOLUME true-false feature  for users who use both tick volume and trade volume..........More details and examples

 

FREE     

Stocks, Futures (Unsuitable for Forex)

 

Author: Norm North. ( Open EL code )

Compatible with....           Indicator + function                       Precision divergence finder

A complex piece of code that observes multiple look backs of Demand Index lengths to hunt out when divergences exist.

Often produces stunning signals at exact market bottoms.

This is not an "always in the market" indicator and only flags up when sets up occur that show a real divergence in a market.

As Demand Index uses volume, to perform at its best this indicator needs real volume enabled..............More details and examples

 

Price $167  (Pay-Pal)   Buy this item

Stocks, Futures, Bonds  (Unsuitable for Forex)

 

 

Author: Precision Trading Systems. (Protected EL code)

Compatible with....              Indicator + function                     Trade Volume Index  ( TVI )

Beautiful piece of work by Steve B Achelis, which I used in some of my early systems. Makes for a smooth analysis of volumes flowing in and out of markets and has always been one of my favourites.

I have altered the code to allow length changes and smoothing.

.

Adds the "Volume dimension" to your price analysis in a clear and precise manner. This indicator is a valuable addition to system filters to confirm trend direction...........More

 

FREE

Stocks, Futures, Bonds, Forex, Indices etc

 

Author: Steve B Achelis. ( Protected EL code)

Compatible with....              Indicator + function                                    Q-Stick

A Simple and yet very efficient way of defining if a trend is in a bull or bear phase. Probably the best piece of work that Chande ever turned out, and yet seemingly forgotten by the whole world.

Setting lengths to 80 or more makes for a smooth analysis of trend, and the crossing of zero indicates trend direction.

 

See how early it signalled a bear move in the example when it crossed zero. Can be used as an short term oscillator with lengths less than 10 and often gives very early signals...More

 

FREE  

Stocks, Futures, Bonds, Forex, Indices etc

 

Author: Tushar Chande. ( Protected EL code)

Compatible with....                Indicator + function Precision Volume (Tick volume for real-time )

An indicator I made for measuring demand-supply imbalances.

This indicator will only work correctly if used on real time data with tick volume enabled.

 

Early warning indicator ( Requires confirmation )

An oscillator type indicator which measures demand and supply imbalances in an easily understood form

 

Above zero = Demand > Supply over sampling period

 

New indicator highs or lows over a chosen long length of (100 bars+) often foretell a strong move is coming..........More

 

FREE     

Stocks, Futures, non-traded Indices (Unsuitable for Forex)

 

Author: Precision Trading Systems. (Protected EL code)

Compatible with....           Indicator + function           Precision Index Oscillator ( Pi-Osc )

 

Highly sophisticated "consensus" indicator comprised of many different component signals. A real technicians tool that measures everything from divergences to probabilities to unique chart patterns in a single market indicator. 

Best results are given when analysing range bound and choppy markets rather than trending ones.

 

Some of its components use real volume so for this to perform at its best this indicator needs real volume............More

 

Price $397  (Pay-Pal)   Buy this item

Stocks, Futures, Bonds  

 

Author: Precision Trading Systems. (Protected EL code)

Compatible with....

 Indicator + function

Precision Mach-Trend

Designed to reduce whipsaw trades in trending periods and help the user reduce costly F expenses.

Mach-Trend is superbly simple to use, and is suitable for all ranges of traders. Calculated using advanced mathematics, this indicator will reduce your F and improve your overall performance. Mach-Trend pro has adjustable price and length, and Mach-Trend Platinum has fully available parameters enabling advanced optimisations for the sophisticated user.

 

Coming soon....more information

Stocks, Futures, Bonds, Forex, Indices

 

Author: Precision Trading Systems. (Protected EL code)

 

Compatible with....           Indicator + function                              Precision Gravity System

 

A complex piece of code that observes multiple phases of planetary orbits, to calculate extreme points of price sets. The relative gravity of the "sun" and "moon" are calculated using advanced physics mathematics.

The first system of its kind to be introduced to stock market trading systems, its is still under developments.........more

 

 

Coming soon

 

Stocks, Futures, Bonds  (Unsuitable for Forex)

 

Author: Precision Trading Systems. (Protected EL code)

Compatible with....           Indicator + function

  Money flow index MFI

 

Highly effective volume indicator showing money flowing in and out of securities. Works well as an over bought oversold oscillator and can be used for divergences as well. Ranging between 0 to 100 the MFI crossing above or below 50 can be used to identify a bullish or bearish condition of a trend changing even.....More details and examples

 

FREE

Stocks, Futures, Bonds, Forex, Indices

 

Author: Unknown. (Open EL code)

     

 

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