tag:blogger.com,1999:blog-6950062.post112262102882143573..comments2023-11-12T03:20:26.385-06:00Comments on TaylorTree: Part II: Scale Fish not TradesMike Taylorhttp://www.blogger.com/profile/03074565631668167250noreply@blogger.comBlogger12125tag:blogger.com,1999:blog-6950062.post-26894648931384908542010-01-24T12:39:56.291-06:002010-01-24T12:39:56.291-06:00Thanks PRD trader!Thanks PRD trader!Mike Taylorhttps://www.blogger.com/profile/03074565631668167250noreply@blogger.comtag:blogger.com,1999:blog-6950062.post-6490392128000747092010-01-24T03:33:12.696-06:002010-01-24T03:33:12.696-06:00Very informativeVery informativePRD traderhttps://www.blogger.com/profile/06541433100379385122noreply@blogger.comtag:blogger.com,1999:blog-6950062.post-1123719159476597222005-08-10T19:12:00.000-05:002005-08-10T19:12:00.000-05:00Hey Mike,While I've had a ton of experience with d...Hey Mike,<BR/>While I've had a ton of experience with data manipulation in R, up to this point I've been inputting the data manually into a root directory. This has obvious downsides. What do you think of the fBasics package and do you have any recommendations on how I can interactively pull data from the web into R in a more seamless fashion? <BR/><BR/>btw, as I'm sure you know, S+FinMetrics contains basically all you'll ever need when it comes to weekend/weekday conventions in whatever time zone you happen to be in (I believe fCalendar performs a similar function in R). <BR/>-DanDan McCarthyhttps://www.blogger.com/profile/11847275870159324639noreply@blogger.comtag:blogger.com,1999:blog-6950062.post-1122874609929048522005-08-01T00:36:00.000-05:002005-08-01T00:36:00.000-05:00Anonymous, thanks for the camera review site. Wil...Anonymous, thanks for the camera review site. Will help in my research.<BR/><BR/>Regarding trailing stops. I briefly mentioned them in the post mainly because trailing stops are a topic in themselves. And, yes, you are right to consider them. But, not in comparing one versus the other. In my study, the type of exit I was using on the original system was a trailing stop. Scaling out actually improves upon trailing stops.<BR/><BR/>You see, for years I've always had a gripe with my long-term systems and their exits. Why? Because if I use a profit stop then there is a possibility the stock will continue moving up leaving me without a position.<BR/><BR/>Trail stops work in reverse. You had profits but due to an adverse move...now you don't have as much. <BR/><BR/>Time exits? The stock didn't behave like you thought so you get out. But, was there some point in the hold where the stock did okay? Just not okay enough to kick in one of the other exit types.<BR/><BR/>By combining trailing stops, time stops, and scaling out...I've found a happy medium.<BR/><BR/>Now, instead of scaling out due to profits, you can get real fancy and choose a volatility-based movement to scale out instead. This is something Tom Basso mentioned in one of the Market Wizards book. In fact, about 5 years ago I contacted Mr. Basso about his logic from the interview and asked if I got it right. He was nice enough to contact me back and confirm my logic was true and wished me the best. Kinda cool considering I was just a budding system trader at the time.<BR/><BR/>Great advice with the reward comments.<BR/><BR/>Thanks!<BR/><BR/>MTMike Taylorhttps://www.blogger.com/profile/03074565631668167250noreply@blogger.comtag:blogger.com,1999:blog-6950062.post-1122871866365685682005-07-31T23:51:00.000-05:002005-07-31T23:51:00.000-05:00Damian, I have not analyzed the tax aspect of scal...Damian, I have not analyzed the tax aspect of scaling since the majority of my positions held are less than a year. But, for readers who hold a year or longer, this is something to consider along with commission costs and slippage when testing your own portfolio's history of trades.<BR/><BR/>Thanks for your comments and keeping me honest.<BR/><BR/>MTMike Taylorhttps://www.blogger.com/profile/03074565631668167250noreply@blogger.comtag:blogger.com,1999:blog-6950062.post-1122864655481660842005-07-31T21:50:00.000-05:002005-07-31T21:50:00.000-05:00Don't buy a digital camera before reading about yo...Don't buy a digital camera before reading about your choices at http://www.dpreview.com/<BR/><BR/>Re: scaling out I really think you have to analyze the benefits versus some trailing stop scheme, because both methods get you liquid and into another trade and you need to establish for yourself which way makes more money presuming you re-invest your stopped out cash once you get it.<BR/><BR/>Re: rewards: "You can't have your cake and eat it too". When I was a kid I never understood this saying; who'd want to have a cake? The POINT is to EAT the cake ... with profits it's a little different. If you're working with less than 250,000 my vote would go to putting your profits back into your system. You don't have enough cash to start sapping it out of your account on every good day. What's the point of shopping around for the lowest commissions only to blow that commission and more on a reward each day? Of course, at some point the idea is to make enough money to spend it, because like the cake ... what's the point of having the money if you can't spend it.<BR/><BR/>In summary, I guess I'd save the rewards for when the account is able to toss the money out on a regular basis. For many people reading your blog, they won't be at that point. They should use rewards sparingly at best - perhaps after an up year or an up quarter. I'm up over several years of trading but the account sure isn't generating profits at the rate of a dinner per success ... at least, not a _nice_ dinner :-)Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6950062.post-1122833159884814552005-07-31T13:05:00.000-05:002005-07-31T13:05:00.000-05:00Michael, thanks for the link!And thanks for the di...Michael, thanks for the <A HREF="http://www.tradermike.net/2005/07/scaling_out_of_trades_partial_profits_incremental_sales.html" REL="nofollow">link</A>!<BR/><BR/>And thanks for the dinner idea. I'll have to try that sometime soon.<BR/><BR/>You know, it seems so much effort is used to earn money...hard to turn that off and enjoy it. But, I promise...I'll learn. :)<BR/><BR/>MTMike Taylorhttps://www.blogger.com/profile/03074565631668167250noreply@blogger.comtag:blogger.com,1999:blog-6950062.post-1122742298657958112005-07-30T11:51:00.000-05:002005-07-30T11:51:00.000-05:00Isn't there a tax aspect of this that you need to ...Isn't there a tax aspect of this that you need to take into account? I agee, in general, with what you're saying, but if the full deck trade can be held for over a year, then it has significant tax benefits in terms of long term cap gains verses short term cap gains. Buffett was obviously a big believer in this - what would the model look like, in terms of returns of both systems, if you took into account taxes?Damianhttps://www.blogger.com/profile/16016686632386396090noreply@blogger.comtag:blogger.com,1999:blog-6950062.post-1122731142770316262005-07-30T08:45:00.000-05:002005-07-30T08:45:00.000-05:00oh, on the rewarding yoursef thing -- I've started...oh, on the rewarding yoursef thing -- I've started to do that recently. It may be something as simple as going to my favorite restaurant for dinner after a good day. I think it's critically important to do stuff like that as well as taking some profits out of one's trading account and do something with it. Otherwise what's the point of making the money?Michaelhttps://www.blogger.com/profile/02783452835393442677noreply@blogger.comtag:blogger.com,1999:blog-6950062.post-1122730690703329562005-07-30T08:38:00.000-05:002005-07-30T08:38:00.000-05:00Great post Michael! I'm about to put up a link to...Great post Michael! I'm about to put up a link to it on my blog...Michaelhttps://www.blogger.com/profile/02783452835393442677noreply@blogger.comtag:blogger.com,1999:blog-6950062.post-1122692338118562882005-07-29T21:58:00.000-05:002005-07-29T21:58:00.000-05:00Thanks! Two things of interest I saw on your blog...Thanks! Two things of interest I saw on your blog. The python COM work. Something I will begin to look into in order to get email alerts working with the Trade-Ideas software. <BR/><BR/>I also like your recent mention of The Mathematics of Technical Analysis by Sherry. That book is the next in my queue to read.<BR/><BR/>MTMike Taylorhttps://www.blogger.com/profile/03074565631668167250noreply@blogger.comtag:blogger.com,1999:blog-6950062.post-1122690009489981742005-07-29T21:20:00.000-05:002005-07-29T21:20:00.000-05:00hey this is Greg from The Trader Log I was checkin...hey this is Greg from <A HREF="http://thetraderlog.com" REL="nofollow">The Trader Log</A> I was checking out your blog, great work! I am adding you to me bloglines today.Anonymousnoreply@blogger.com