Nasdaq 100 Trading

[gchoward]

Hello all,

I purchased MTPredict at the beginning of May to trade the Nasdaq 100 stocks with and since no one else here seems to post stock trading results regularly, I thought I would post my Monthly results for anyone interested.

I currently trade a tiny account $4000.00 and as such am only prepared to risk $10 on any given trade.

I do not only trade ABC corrections - I would describe myself as a discretionary trader who relies 100% on the EW algorithm within MTP.

I look to trade the impulsive wave movements coming from the ending of an ABC, Wave 2/B, or Wave 5 movement (as calculated from MTP).

I only enter trades if the Risk to Reward Ration is greater than 3 using the standard MTP methodology.

I look to move stops to BE as soon as the low/high of a bar completely passes the entry point.

I trail my profit protection stop using minor pivot points and being extra conservative at MTP target zones.

During May I made 31 trades (3 still open at month end), 11 of which were profitable (35%), my average profit was $37 (ie 3.7 Risk), my average loss was $14 (ie 1.4 Risk) with my account overall rising by about $125 during the month.

My biggest mistake by far was not following the advice in the trading course and only trading with the trend (as defined by the QQQQ,ie DOWN).

I also think with stock trading less is definately more - ie I will be looking for a filter to cut the number of trades I'm currently putting on, probably by using the pivot point function within MTP on the QQQQs.

Happy trading all.

[Matt Bowen]

Hi GC,

Your discipline is excellent... Your are correct about the less activity and only looking for those setups that are perfect.

It's very difficult to trade stocks with a small account because there is no leverage like Futures or Forex, so you have to cut down the price per share that you trade. In fact, I would limit the price per stock to $20. because if you buy anything over $20. and I assume you are buying 100 shares, you will eat up half your account on 1 trade. With a $10. stock you can buy 200 shares and still have half your account available.

One other thing you need to REALLY watch is your commission structure. You said last month you did 31 trades....well, if you are paying $10 a round turn then you ate up $310. of your profits... that's about 7% of your account and that has a huge impact on your overall results.

This is exactly why many people with a small account choose to trade Futures or Forex over stocks... because of the cost of doing business, they need that leverage to work for them. With stocks you don't have the leverage advantage...

Another problem you will run into is your risk. When you have a small account this will cut down many opportunities just by running the position size. If you run the position size on a $4000. account and you do 2% position size you are only allowed to risk $80. it's difficult to find a trade setup that only allows $80. of risk, here read this it might help explain the matter:

http://www.mtptrader.com/SF.pdf


All the best,

-Matt

[gchoward]

Thanks for the tips Matt.

For your info I only trade small odd lots (ie <100 shares) with stoplimit orders and as such am able to easily keep my risk down to $10 per trade (0.25% of my account). That is why I trade NASDAQ but not NYSE as NYSE does not trade odd lots to open. Also I use IB so my commission rate is $2 round turn.

In my very newbie opinion if you only want to get your feet damp (ie not even wet) the best markets to trade on a shoestring without being completely eaten alive by costs are FX and Nasdaq shares. One could consider buying US share options one at a time but that opens up all those greeks into the equasion as well!