My newbie trades review & tips for using SAXO

It's been slightly over a month since I started out on my Jedi journey. Here are my previous 2 trade-related posts - Pair trading adventure I & not-so-pretty Pair trading adventure II.


It has been a fruitful month as overall I have made some gains - contrary to what I have expected of having to pay 'school fee'. Research and charting has been time-consuming and could only take place quite late after work (US market opens at 9.30pm). There were many times when I "analysed till paralyzed" and ended up just sitting on the sideline. I do mostly swing trades and closing my positions within a few days.


As my positions were pretty small, my commissions & fees combined were a substantial portion (%) deducted from my gains. Broker is indeed the big winner regardless of whether we win or lose.
To so-call maximize my commission (and be more cost-effective), there are 3 possible ways:
1) Enter fewer but bigger positions in strong trend (which means I have to utilize higher margin) or
2) Hold my winning trades longer (however holding the position for a longer time would mean I have to set a wider stop-loss point to avoid getting 'whip-sawed' out, thereby translating to higher risk.)
3) Do both of the above


Yeah, so account size and risk management matter.


Below is a hypothetical table which I have created to see how my trades would fare should I hold them for 2 weeks or more (till 11 Sep and not factoring in commissions/financing fees). The trades are in chronological order and those cells with the same shade of purple belong to the same pair-trade, means I opened them on the same day.


I should have put in some kind of volatility measure in my table above (hmm... is there an indicator that can allow me to tabulate relative volatility over x period?). In any case, by drawing channel lines I could tell that the few trades that could potentially bag big bucks (highlighted in green) have very high price volatility.

The million-dollar question here is...

How LONG do I think the trend can run?

I guess it takes an astute trader with deep pocket to find out. Shrug.


Compared to the lack-lustre performance in SG market currently, there's still a number of US stocks on bull run with pull backs. Some of them like the bank stocks seem to be consolidating though.

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The SAXO trader GO platform has got some elusive functions that took me a while to figure out. Here are a few of them...

  • Link instrument
If you want the chart of the instrument that you have selected on the watchlist (left hand window) to auto-appear every time, simply activate the 'chain icon' at the top left corner of the chart window (right) by clicking it once.
Do vice versa if you do not want the chart to change every time you click on something in your watchlist.


  • Placing related orders
You can place related order after opening a position by right-clicking on the open position of a stock and select Modify Related Orders to enter stop-loss or take profit orders.

  • Add a chart for assessing correlation
Click on the '+' button at the left side to add a second stock chart



Click on the indicator button on the right side


Click on COR and you will see the above window, enter details and click Ok. You will then get a correlation line graph.


Do note that we can only transfer SGD into SAXO's bank account which would in turn change into USD in SAXO according to SAXO's rate. Similarly, for withdrawal the money will get changed back into SGD to be credited into our bank account.


SAXO is currently running a referral promotion - https://www.home.saxo/en-sg/accounts/referral, PM me if interested and we could split the reward.


That's all for this weekend's update! :)


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Comments

  1. This comment has been removed by the author.

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  2. hihi how can we achieve the 3 trades with min. risk?

    ReplyDelete
    Replies
    1. Hi Edmund,

      In point 1, the key word is 'strong trend'. You can read more about that in identifying break-out and trend trading.
      In point 2, the key word is 'winning'. So we want to let the winner run and cut loss for any losing position in a timely manner.

      Even by doing the above, it probably just reduce risk slightly. Because the biggest risk factor comes with the way one executes the trades.

      Delete

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