User Manual - Park Avenue Consulting
Contents
1. 0 Winn 0 89 2 10 Los 1 49 2 10 3 49 2 10 prir 1449 2 10 Closed Trades 7 49 2 10 Symbol Trade INITIAL Order 2 10 Money Risk Management RTC Brokerage Long Trades Trade Size Above Brokerage 9o Brokerage 0 32 95 50001 LES est 14 15000 0 4 100001 1 5 9 55000 0 35 150001 1 6 1000000 0 13 Closed Trades 0 ade Expectancy 0 MetaStock Directories Brokerage Short Trades Av Days Held 0 0 C Shares ASx All Ords Trade Size Above Brokerage o Brokerage 0 79 95 15000 0 45 55000 0 4 1000000 0 15 Capital Management Currency Symbol s Divide MetaStock prices by 100 Description Date Amount Standard Deviation Add Dir s Remove Dir s Save Settings Default Settings Cancel stem Quality Number Cash 0 Portfolio Comparison Compare Current Portfolio Portfolio Long Trades Create New Load Portfolio Manage Capital New Trade Edit Delete Help Close X hit Save Settings Capital Management Loss of Gain on Balance Initial Capital o Benovet The percentage gain it takes to recover a loss increases geometrically with each loss For example if we lose 15 of our capital we would have to make a 17 6 gain on the balance to get even However if we lose 30 of our capital it will take a 42 9 gain on the balance we have left to get even and if we lose 50 it will take a 100 gain on the balance to get even e A EM N o gt C2 C2 It is widely accepted 80 9096 of traders lose mone2. 9 1 00 share You have your exit stop loss set so that if the price drops 1096 90 you get out and it does Remaining Trading Capital 18 000 Loss 2 000 Problem No Trade Sizing Strategy Trade 2 Once bit twice shy they say you are now a little more cautious and only buy 5 000 shares of ABC Co 1 00 share and it goes up to 1 30 30 you decide that s great profit I m not greedy amp sell How can you lose taking a profit ve made 1 500 you tell your friends this is great you think but you lost 2 000 on your first trade you are down 500 or 19 500 Problem No Trade Sizing or Profit Taking Strategy No one trade should feel better or worse than the other the share either fits all your trading rules or it doesn t don t make it personal Don t try to second guess or let your emotions tell you when to sell the market amp your Exit amp Profit Taking strategy will do that Who knows how much higher it may have go After 10 or 20 trades this can get out of control amp hard to manage JBL Risk Manager displays your Recommended Buy Quantity based on your Trading Capital brokerage fees and the last closing price Initial Stop Loss amp Breakeven prices are also displayed At any time during the trade you may enter an alternative Trailing Stop Loss price by entering value beside day in New Trailing Stop column which will over ride current Trailing Stop Optional is a Time Stop which triggers an EXIT if th
3. Stop Loss Stop ATR Stop Current Stop Action New Trailing Stop Time Stop 52 51 PP R1 R2 Initial Stop Loss 2 Breakeven Technical Stop for stospit Maximum Risk 500 Days Held I Initial Stop 39 07 Next Trade T Preferred Initial Stop 40 00 Last Close E Based on current Stop Loss 40 00 Anticipated Sell Total Raising Preferred Initial Stop from 39 07 to 40 00 is lower risk amp results in increased Share Quantity New Quantity will exceed Max Trade Size so reduce to initial 110 Recommended Buy Qty as above Use an Alternative a to automatic ATR or Trailing Stop 1 4988 TES 5 25 8 11 8 59 8 82 9 03 9 16 9 3 21j0ej2D08 9 26 9 35 9 10 928 0 4905 6 11 8 35 B 37 6 99 9 14 9 24 9 39 9 49 22f02 2008 920 9 36 905 9 30 0 4846 8 11 8 37 8 38 6 93 9 11 9 24 9 42 9 55 310 925 6 91 894 Initial Stop Loss as 1 75 Breakeven 9 26 Maxim um Risk 1339 02 Days Hdd 3 Technical stop m for E Stock Split Trailing Stop 8 39 Next Trade amp 10 23 Enter Trailing Stop value in New Trailing Stop column after updating database Date open High Low Close arm ma stop Loss oo Stop ATR Stop current Stop status New Trailing Stop Time Stop 20 02 2008 9 10 925 891 894 04956 ES 8 05 8 25 8 11 850 8 82 9 03 916 9 37 21 02 2008 926 935 9 10 928 04905 8 11 8 35 E 8 99 9 14 9 24 9 39 9 49 22102 2008 920 9 36 9 05 930 04846 6 11 8 37 8 39 9 02 Tir 8 93 9 11 9 24 942 95
4. Backup Portfolio s Locate PortfoliosV1 ini in RiskManager folder in Application Data folder For XP users hit START Run appdata RiskManager Copy PortfoliosV1 ini If any portfolio s gets corrupted delete PortfoliosV1 ini and restore backup or begin re entry To Remove Program Hit Start All Programs Uninstall JBL Risk Manager To Unlock Trial Period When ordering quote your unique Trial Registration Number displayed in trial window you will be emailed an unlock key as an attachment Don t attempt to open it Copy amp Paste or Save it to your desktop Open JBL Risk Manager Install License Select Se e RiskManager T Registration Entries me Open hit Try Close Re open JBL Risk Manager RiskManager key JBLRM SUPPORT support paconsulting net au To transfer JBLRM onto another Computer or your existing Computer after C Drive Upgrade or Crash Hold down Shift Ctrl A keys and at the same time left click on RiskManager exe shortcut icon This will generate an authentication number and completely remove program preventing further execution Send the authentication number exactly as it appears and the new Trial Registration Number to me after downloading trial at www paconsulting net au uploads setup exe On confirmation will send a new key to you promptly BULL Market A period in which market prices rise faster than their historical average Bull markets can happen as a result of an economic recover
5. Click Order ar supportpacansulting net au Quote the Trial Registration No below when ordering Avoid any errors Right Click on the Trial Registration Ma Copy Trial Registration No 14 D11 EF 1 3 44 Install License Order Risk Management Because everyone s risk tolerance and the reason for them participating in the market may vary you may wish to alter the default settings Select Short Term Trading few days Medium Term Default few weeks or Long Term Investing few months in Settings page You may also wish to alter the default price ranges to better reflect the volatility erratic price movement of each share within each price range in the market you are trading or investing in For example the first value in Settings page column refers to shares above 0 but below 49 and so on In this example while holding the share when it moves above 49 into the next range 50 89 the designated ATR amp 96 Stops parameters are then referenced ATR and Stop refers only to your Profit Trailing Stop values in JBL RM 96 Stop refers to how much you will allow the share to drop before you take your profits based on the last close For Medium Term trading default ATR utilizes an 8 day ATR with a 10 day Simple Moving Average SMA and will better reflect share price movement This Profit Stop also known as a Trailing Stop is triggered when your share price has hit the Breakeven Price Whichever Stop ATR or 96 is clos
6. Current STOP Hold Or xt Open Trades 0 Winning 0 0 Winning Total 0 Average Winner 0 0 0 Trade Expectancy 0 Losing 0 Losing Total 0 Average Loser 0 0 0 Average Days Held 0 0 Closed Trades E Hipa Symbol Trade INITIAL Order Summary FINAL Order Summary Nett Profit Loss R Multiple Variance Closed Trades 0 Won 0 0 Win Total 0 Average Win 0 0 0 Greatest Win 0 0 0 Trade Expectancy 0 Lost 0 0 Loss Total 0 Average Loss 0 0 0 Greatest Loss 0 0 0 Average Days Held 0 0 Capital Management Description Date Amount Total Brokerage 0 00 Closed Trades only Total Gain Loss R Standard Deviation Average Expectancy R System Quality Number Core Capital 25000 Cash 25000 Portfolio Comparison Compare Current Portfolio Create New Load Portfolio Settings Manage Capital i B User Guide Close X EI MEN mE Risk Management Short Term Trading Medium Term Long Term Investing 2 ATR 8 amp 10 Share Price Above ATR Multiplier Stop Fate 10 2 10 2 10 e 10 e 10 z 10 2 10 10 Money Risk Management RTC Brokerage Long Trades D 2 19 t 69 95 3DO001 1 75 14 15000 0 4 100001 1 5 J son 1 35 150001 1 6 10000060 0 13 MetaStock Directories Brokerage Short Trades t 79 95 15000 0 45 2000 0 4 10000060 0 15 Currency Symbol p Divide MetaStock prices by 100 Add Diris Remove Diisi Save Settings De
7. Risk and optimise your Trading Capital by 10 managing the amount of trades you have open to between 5 and 10 depending 10 on your maximum Risk Trade e g Maximum 20 if you are using the 2 id rule and 10 if you are using the 1 rule Adjust this percentage to suit your own risk profile Determine your own risk tolerance with the Risk Tolerance ament Brokera Calculator supplied with JBL Risk Manager Trade Size i Akade Trade Size 19 SUMMARY Settings page RTC T Never Trade with more than 20 of your Trading Capital in any one trade e g If you have 25 000 in Trading Capital never trade with more than 5 000 in any one share Never Risk any more than 2 of your Trading Capital in any one trade e g If you have 25 000 in Trading Capital never risk more than 500 in any one share Always allow for brokerage if brokerage is 50 each way your maximum risk is now 400 Never Risk more than 6 in any one industry sector e g With 3 open positions if you are using the 2 rule 4 open positions if using 1 5 and 6 if using the 1 rule I wish you all share trading success Joseph Barrington Lew Protecting your Trading Capital 22
8. with O H L and C but the ATR value will automatically be calculated How to select Metastock directory path one step at a time e JBL Risk Manager V8 l x Trading Summary Open Trades Eaa rode Sein n en rin Orr sto rotor tas Coen STOP aid or Ba jg Settings EM E c x Risk Management X Short Term Medium Term C Long Term 2x ATR 8 amp 10 Share Price Above ATR Multiplier 10 10 Open Trades 0 Winn 10 ade Expectancy 0 Los 10 rage Days Held 0 0 Select Directory x Closed Trades Ey Symbol Trade INITIAL Order Select the MetaStock directory or MetaStock directory path je Brokerage 0 4 0 35 0 13 Closed Trades 0 MetaStock Directori ade Expectancy 0 Av Days Held 0 0 c ASharesyASX YII Ords je Brokerage 0 45 0 4 o 0 15 Capital Management Currency Symbol ig Divide MetaStock prices by 100 Description Date Amount Standard Deviation amp ddiDir s Remove Diris Default Settings Cancel stem Quality Number Cash 0 Portfolio Comparison Compare Current Portfolio Portfolio Long Trades Create New Load Portfolio Manage Capital New Trade Edit Delete Help Close X age JBL Risk Manager V8 BENE d 81 xl Trading Summary JEL Risk Manager vs Open Trades f Settings I E oj xl Risk Management Short Term i C Long Term 2 x ATR 8 amp 10 0 49 2 10 Open Trades
9. your profits will take care of themselves What this guru means is control your risk by keeping your losses small amp letting your profits run Controlling Share Sector amp Market Risk is vital to trading success Dr Elder recommends not losing more than 6 in any one month if you do stop trading for the remainder of the month Come into my Trading Room A Barron s Best Investment Book of 2002 Limit your Total Risk in any one industry sector to 696 of your current Core Trading Capital Six 6 open positions if your maximum Risk per Trade for every open position is 196 of your Core Trading Capital e g Three 3 open positions if your maximum Risk per Trade is 296 of your Core Trading Capital The above example does not mean you are limited to only holding 3 open positions in any one sector You may open a fourth when you have covered the risk in any one of the other 3 positions the trailing stop is at or above the breakeven price displayed asa amp inthe Trading Summary Page and a fifth when you have covered your risk in another share within that sector and so on Open Trades Symbol Trade Sector Risk SR INITIAL Order MAB Long Banking 1 75 W 122 04 x 370 29 95 f8480 75 on 6 0 WEBC Long Banking 1 75 YF 20 50 x 417 29 95 6578 45 on 6 0 ANZ Long Banking 1 75 12 71 x 626 79 95 7986 41 on 3 07 CBA Long Banking 1 75 A 27 65 x 190 29 95 5283 45 on 3 0 Market Risk You should control your Market
10. 19 20 21 22 23 24 25 26 27 28 29 Today 1 10 2009 Stock Split Clear Date f i Cance ext Trade el Nett Profit Based on current Stop Loss 34 264 Anticipated Sell Total Sell Date Sell Price x Quantity Brokerage 32 95 Sell Total Diary v Save Trade Cancel Initial Stop Loss f2 Breakeven Maximum Risk 500 Days Held Capital 25000 Cash 25000 Portfolio Comparison Compare Current Portfolio Portfolio Long Trades Create New Load Portfolio Settings Manage Capital Edit Delete Help Close X e g Last close 8 2 2008 was 36 14 but opened at 36 61 alter Buy Price BHP BHP BILLITON LIMITED ORDINARY LONG TRADE Short Sector Materials Trading Capital 25000 Cash 25000 Symbol BHP Recommended Buy Quantity 130 Anticipated Buy Total 4750 Buy Date 11 02 2008 Buy Price fe 14 x Quantity ha Brokerage 32 95 Actual Buy Total CENE cr CSS Ae a oe crece nen e UN E 11 02 2008 36 61 36 74 35 46 35 85 1 61 32 95 32 26 34 74 35 29 36 02 36 57 37 30 12 02 2008 36 15 36 95 35 90 36 91 1 60 32 95 33 22 i 35 54 36 22 36 59 37 27 37 64 13 02 2008 37 50 37 88 37 22 37 35 1 59 32 95 33 61 34 69 34 69 36 82 37 09 37 48 37 75 38 14 14 02 2008 38 19 39 03 38 15 39 03 1 59 32 95 2D 35 86 37 86 38 44 38 74 39 32 39 62 15 02 2008 38 36 39 78 38 20 39 29 1 58 32 95 35 36 36 63 37 51 38 40 39 09 39 98 40 67 11 _ JBL Risk Manager V8 4 Trading Summa
11. 3393 Sa 359 407 341 385 O41 3 166 i20 3 251 3 285 23 12 2008 3 72 3 82 341 353 0415 3 166 3267 2 991 3 285 2412 2008 331 3 73 331 368 0419 3 66 3312 2 593 3 312 25 12 2008 26 12 2008 29112 2008 3 88 3 85 350 360 0422 3 166 324 3 008 3 312 30 12 2008 3 70 38 350 366 0423 3 166 3294 2 995 3 312 31 12 2008 3 60 3J5 353 375 0419 3 68 3375 2 212 3 375 Initial Stop Loss ai 1 75 Breakeven 3 517 Technical top i a Maxim um Risk 1047 763 Days Held 23 Trailing Stop 4 437 Next Trade i 4 117 Pubic Holiday no price data 330 345 3 65 380 4 00 335 3 515 3 647 3 793 3927 1085 0 13 ue Mett Profit 4 10 Based on current stop Los s Bnticipaked sel Total Sell Date 14 01 2009 Sell Price 99 i Quantity 2245 Brokerage fs 95 Sell Total 6927 50 ma Motes Save Trade Cancel Contrary to popular belief most consistent intra day traders do not spend their days attempting to predict price action by picking tops or picking bottoms They spend their days executing a well drafted simple to follow trading plan This strategy is included so that you may test it and come to your own conclusions The writer found it may be of interest to both short and long term investors Pivot Point Support amp Resistance Levels The day s trading activity can generally be thought of as revolving around and gravitating towards the Daily Pivot Point level PP As pr
12. 5 Initial Stop Loss 2 1 75 Breakeven 9 26 Technical Stop 9 02 For Stock Split Maximum Risk 1339 02 Days Held 3 Traling Stop s02 Next Trade 1023 13 Portfolio Comparis jp JBL Risk Manager 8 on Hit Compare and select Index folder OK Trading Summary JE Risk Manager vs Open Trades e Symbol Trade Sector SR eR INITIAL Order Status Profit or Loss Current STOP Hold or Exit Open Trades 0 Winning 0 0 Winning Total 0 Average Winner 0 0 0 Trade Expectancy 0 Losing 0 0 Losing Total 0 Average Loser 0 0 0 Average Days Held 0 0 xi Closed Trades Print Select the MetaStock directory or MetaStock directory path Symbol Trade INITIAL Order E MSSmart Closed Trades 1 Won 1 100 Win t Win 336 7 0 Trade Expectancy 336 Lost 0 0 Loss t Loss 0 0 095 Av Days Held 9 0 c shares ASx Indices i Capital Management Description Date Amount Total Brokerage 65 90 Closed Trades Only Total Gain Loss R 0 67 Standard Deviation Average Expectancy R 0 67 System Quality Number Capital 25335 80 a 174 Cash 25335 80 Portfolio Comparison Current Portfolio Portfolio Long Trades Create New f Load Portfolio Settings Manage Capital New Trade Edit Help Close X Comparison of Portfolio Performance and Indice over the same period Total Brokerage 65 30 Closed Trades only Total Gain Loss R 0 67 Standard D
13. At some point in time your trading system will meet a draw down period losing streak and if you don t know what to do you may lose your feeling of control and try to desperately trade your way out of this crisis Many people feel despondent and abandon a perfectly good trading system or give up trading altogether with large profits still to be made As a Trader you re destined to fail without proven Money Risk Management principles Managing the Capital in your trading account controlling the risk it is exposed to the size of each trade together with entry exit strategies are all pre requisites of any Money Risk Management System and successful Trading Plan Click below to view some sample trades on YouTube internet connection required http www youtube com watch v hlw HDVyI8E Click below to view 10 minute tour of program on YouTube internet connection required http au youtube com watch v CR7Oerl0YfQ Click below to view short 2 minute Intro on YouTube internet connection required http www youtube com watch v vTkKT6H 50IQ Quick Start 1 Click on Create New Load Portfolio Enter appropriate name Create New Portfolio x Select Portfolio Close Delete Portfolio Load Portfolio Current Portfolio Portfolio Long Trades Portfolio Long Trades io Settings 2 Click Settings Select Short or Medium Default or Long Term Investing Risk Management Short Term Trading Med
14. Pag 2 20 21 22 JBL MAPA NAN 28 Park Avenue Consulting User Manual Contents Terms amp Conditions amp Money Risk Management Quick Start Registration amp amp Average True Range explained ATR Settings Risk Management amp Money Management Settings How to add MetaStock data directory Capital Management Your Trading Plan amp How to Initiate a Trade How to use alternative Initial Stop Share Quantity amp Trailing Stop How to Compare Portfolio Performance against Index Trade Performance Reporting and Trade Expectancy Trading Power Pivot Points Your Risk Tolerance Calculator amp explained Backup Remove Program JBLRM Utilities R Multiples R Expectancy System Quality Number Sector and Market Risk Terms and Conditions Disclaimer As the user of this Program and the Money Risk Management Rules recommended you do hereby release forever discharge and agree to forever hold Joseph Barrington Lew Park Avenue Consulting and any company he may be involved with harmless from any liability claims and demands of any nature whatsoever for injury damages including but not limited to financial losses and expenses of any nature whatsoever whether such claim or claims are based upon negligence breach of guarantee or warranty strict liability contract breach of fiduciary duty or otherwise which may be incurred by the user as of the use of or reliance upon this information The in
15. Save Trade A dicm Mett Profit 3 30 Based an current Stop Loss Gnticipated Sal Total Sell Date 23 02 2008 Sell Price E X Quantity 1143 Brokerage 32 95 Sell Total 10596 95 rm Exit at Open ideally with an At Market Order next trading day 14 Trade Journal Update with reasons for entry exit and any updates Sell Date 23 02 2008 Sell Price 9 20 X Quantity 1143 Brokerage 32 95 Sell Total i i Motes 19 2 Brake major Resistance with volume new uptrend formed zziz Bad Profit Report Lost Government contracts 23 2 Exit on ATR Stop El 15 Stock Split s Data adjustment enter split to adjust Stock Split n for Stock Split Next Trade im 19 28 4 Registration Step 1 Trial expires 14 days after installation and if you wish to purchase click on Order button e Step 2 Please quote your unique Trial Registration uo with your name and email address You will be sent an email with a file attached This will permanently remove trial window Save file attached RiskManager key onto your computer Open JBLRM hit Install License Select the file saved Open JBL Risk Manager Trial JBL Risk Manager 8 4 0 D ay s remaining for trial 14 This i a FREE fully functional evaluation copy and expires in 14 days Hit Try to begin trial ar to close window hit Try and close program rau will need to order this program after the FREE 14 day trial period has expired
16. TED ORDINARY C shares ASX Equities In A Z B 3 C shares ASX Equities In A Z C AVJENNINGS LIMITED ORDINARY ALUMINA LIMITED ORDINARY AWE LIMITED ORDINARY APEX MINERALS NL ORDINARY C shares MASX Equities In A Z G C shares ASX Equities In A Z H BILLABONG ORDINARY iti BENDIGO AND ADELAIDE ORDINARY BELL FINANCIAL GROUP ORDINARY 3HP BHP BILLITON LIMITED ORDINARY Initial Stop Loss 2 C ehareclASY Faitities Tn A 7 J 3c ERG ENDE QU ZI ATTIRE APT Maximum Risk 500 Security BHP Ok Cancel Last Close aoe soot a selpate SelPrie xQuatity Brokerage 29 95 SellTotal Diary Save Trade Cancel Recommended enter Sector to control Sector Risk displayed in Trading Summary Page Click once in Buy Date box Click on Buy Date Select Date Hit OK je JBL Risk Manager 8 l LR 18 x Trading Summary JER Risk Manager v8 Open Trades Symbol rade Sector R e INTIAL Order status rior Loss current TOP Hold ar E ie Trade o lol xj BHP BHP BILLITON LIMITED ORDINARY LONG TRADE Short sector Trading Capital 25000 Cash 25000 Symbol BHP Recommended Buy Quantity 125 Anticipated Buy Total 4750 Buy Date Buy Price 7 73 x Quantity Brokerage faz 95 Actual Buy Total Geist cuv oote s Date nen eh iow hse ata ma stop toss foe stop Jarr E gs Mon Tue Wed Thu Fri Sat Sun 2 3 4 5 6 7 8 9 10 Eb 12 13 14 15 16 17 18
17. aldag ASTE Roe LM IEI She eslica ASTE pec NTERHAT ORA Eher eil a Eo BEYOND OHLIME Mur cilium UH I 2 eir poi Leur p A cn fw rs e Roe 7 EFEC aren dak EFL SA Bae gs i A n a NR or Click in Symbol Box enter Symbol in Security Box OK 8a Enter Sector recommended Enter 9 Click in Buy Date box Click on the anticipated Buy Date hit OK MU Mon lus Wed Thu Fi Sat Sun 1 2 3 4 5 amp fF 8 9 10 ti i 13 14 2 Today 22 10 2007 Clear Date o Carcel 10 Enter share Quantity from Recommended Buy Quantity display Save Trade symbal BHF Recommended Buy Quantity 181 Anticipated Buy Tatal 8441 005 Buy Date 18 10 2007 Buy Price 46 30 Quantity fis Brokerage 29 95 Actual Buy Total 410 25 v 11 Correct Actual Buy Price amp Quantity if necessary after purchase symbol BHP Recommended Buy Quantity 179 Anticipated Buy Total 5441 005 Buy Date 18 10 2007 Busy Price 46 77 Y Quantity 181 Brokerage 29 95 Actual Buy Total 8495 32 12 Look for another trade when Next Trade price is hit optional For the conservative trader or investor control the number of positions you have open You open another trade only when the trailing stop is at least breakeven at price indicated Next Trade i ES 13 Close Trade first opportunity if EXIT triggered Click in Sell Date box Buy if Short Click on anticipated Sell Date box Buy Date if Short enter Anticipated Price
18. ays 1 45 0 35 cpu Long 3 70 x 1666 79 95 6194 15 on 10 06 2008 3 60 x 1666 29 95 5967 65 on 19 06 2008 276 50 3 66 after 9 days 0 35 1 46 HVM Short 4 08 x 1532 79 95 6330 51 on 19 05 2008 3 05 x 1532 79 95 4702 55 on 19 06 2008 1468 06 23 1995 after 31 days 2 49 2 64 ABS Short 1 34 x 4238 79 95 5737 68 on 1 05 2008 1 36 x 4238 29 95 5793 63 on 15 05 2008 215 85 3 76 after 14 days 0 36 1 48 Closed Trades 7 Won 4f 57 Win Total 4263 70 Average Win 1065 18 6 Trade Expectancy 497 Lost 3 4375 Loss Total 1 782 85 Average Loss 1 251 4 7 Av Days Held 29 4 Closed LONG Trades 5 Won 3 60 Win Total 2795 64 Average Win 932 17 095 Trade Expectancy 446 Lost 2 40 Loss Total 1 567 Average Loss 1 254 5 1 Av Days Held 32 2 Closed SHORT Trades 2 Won 1 5095 Win Total 41468 06 Average Win 1465 25 2 Trade Expectancy 626 Lost 1 50 Loss Total 215 85 Average Loss 716 3 5 Av Days Held 22 5 Capital Management Description Date Amount m Total Brokerage 1515 30 closed trades only T 6383 43 Capital 31383 43 A iiao Total Gain Loss R 6 02 Standard Deviation 1 28 Average Expectancy R 0 56 System Quality Number 1 77 Cash 10928 35 System Quality Number SQN is a registered Trademark of The Van Tharp Institute Further information at www iitm com 2 Sector Risk Dr Alexander Elder said Take care of your losses and
19. d trades only Average Win Average Loss Average Win Average Loss Average Win Average Loss Capital 27184 42 A Cash 6595 58 297 5 6 195 4 1 271 5 195 0 0 0 310 5 895 195 4 1 2184 42 8 7495 Trade Expectancy Av Days Held Trade Expectancy Av Days Held Trade Expectancy Av Days Held 227 21 5 271 29 5 209 18 4 Summary 7 Closed Trades with 2 Long Trades with a Trade Expectancy of 271 and a Win Loss ratio 10096 amp average win 271 5 1 and loss 0 for an average trading period of 29 5 days 5 Short Trades with a Trade Expectancy of 209 with a Win Loss ratio of 8096 win amp 2096 loss and 310 5 896 average win amp 195 4 196 loss average trading on average 18 4 days Began with 25 000 and now have 27 184 with 1 029 30 in brokerage removed 8 74 After research find you can rely on these numbers a little more after 30 50 more trades N B Brokerage can get out of hand quickly if not monitored correctly 16 Power Pivot Points Made Piel bs AQP z AQUARI US PLATIN UM ORDINARY EXIT Trading Capital 55572 19 Cash 44651 70 LONG TRADE Tt Sector MINING Symbol ap Recommended Buy Quantity 2 6 Anticipated Buy Total 8582107 Buy Date 22 12 2008 Buy Price a y Quantity 2245 Brokerage Achial Buy Total 5089 50 305 Soo 371 c4 321 342 362 383 4 05 3153 3417 3 573 3037
20. e if this share rallies goes up and it is now worth 6 000 or 1 000 in profit but your Profit Stop is set so that if hit your profit would only be 850 not 1000 The next trade would be calculated like this automatically 20 of 25 850 not 20 of 26 000 as others may suggest and certainly not 20 of 20 000 your remaining cash Try 19 not 20 as this will leave 5 to allow for slippage not getting the anticipated price and some cash reserves that may be required for other expenses in running your share trading business data software etc Remember 1 Risk you would need to have a losing streak of 69 losses to lose 50 of your Trading Capital 2 Risk you would need to have a losing streak of 35 losses to lose 50 of your Trading Capital 5 Risk you would need to have a losing streak of 14 losses to lose 50 of your Trading Capital MetaStock Database Select the MetaStock directory path so program may retrieve company name amp price information each day If you have a MetaStock data supplier such as Paritech for example simply click Add Dir s then c then shares giving c shares then ASX showing path as c shares ASX and then OK If you do not have access to a MetaStock database you will first need to enter date Open High Low Close for the last 14 days because the ATR trailing stop is relies on price information for the last 14 trading days prior to your anticipated buy date You will also need to update these prices each day
21. e can see just by those two examples that the percentage of winning trades is not the most important factor in building a system Your trade expectancy should always be positive and you should understand what it all means Everyone is looking for that highly reliable trading system but expectancy is the key The key to expectancy is how you get out of the trade not how to get in and it s how to take profits and protect any profits Trade Expectancy is the profit you re expected to make per trade based on past results Expectancy position sizing and other aspects of Money Management are far more important than trying to discover the Holy Grail of an entry system or indicator s Unfortunately entry techniques are where the vast majority of books and talking heads focus their attention You could have the greatest stock picking system in the world but unless you take this Money Management issue into consideration you may not have any money left to trade the system Having a system that gives you a positive expectancy should be in the forefront of your mind when putting together a Trading Plan 15 Trading Performance Summary Closed Trades 7 Won 6 865 Win Total Lost 1 14 Loss Total Closed LONG Trades 2 Won z 100 Win Total Lost 0 0 Loss Total Closed SHORT Trades 5 Won 4 8075 Win Total Lost 1 270 Loss Total Capital Management 1782 07 195 35 542 43 0 1259 64 195 35 Total Brokerage 1029 30 close
22. e share price has not made Breakeven in 10 days The logic behind this is that your money can probably be better spent elsewhere Click on New Trade Long trade or click in Short trade Box Click once in Symbol box Trading Summary Open Trades LONG TRADE Short Sector Trading Capital 25000 Cash 25000 Symbol ei Recommended Buy Quantity Anticipated Buy Total 4750 Buy Date Buy Price x Quantity Brokerage 29 95 Actual Buy Total Date Open High Low Close ATR MA Stop Loss Stop ATR Stop Current Stop Action New Trailing Stop Time Stop 52 S1 PP R1 R2 Open Trades 0 Closed Trades Closed Trades 0 Initial Stop Loss 2 Breakeven Technical Stop 2 for Stock Split Maximum Risk 500 Days Held Initial Stop Next Trade Preferred Initial Stop Last Close Based on current Stop Loss Anticipated Sell Total Sell Date Sell Price x Quantity Brokerage 29 95 Sell Total Save Trade Cancel Portfolio Comparison Compare Current Po io Portfolio Long Trades Create New Load Portfolio Settings Manage Capital User Guide Close x Click in Symbol box select directory under Directories and or enter symbol in Security box OK LONG TRADE Short Sector Trading Capital 25000 Cash 25000 Symbol Select Security Buy Date Directories Securities C shares ASX All Ords AUSTBROKERS HOLDINGS ORDINARY C shares SX Equities In A Z A E AUSTAR UNI
23. er to each day s closing price that Stop is in control When the share price hits a new high the ATR MA value is multiplied by the pre set value generally 2 times in Settings down from the new high ATR Average True Range is a Volatility Indicator and is calculated by determining the maximum distance or range a share price moves either today or from the previous day s Close to the extreme point High or Low reached during today s trading Therefore True Range is the greatest of The distance from today s High to today s Low or The distance from yesterday s Close to today s High or The distance from yesterday s Close to today s Low Average True Range ATR average of the True Range over a nominated period of time Why use Average True Range Suppose the average daily range for a share is 20 High to Low for the past 6 months but due to interest media speculation or for whatever reason this range may increase to 40 60 or more If you use traditional technical stops such as support lines or moving average crossovers you will probably exit the trade a little early or if the average daily range drops to 10 you may exit a little late Just a little insurance against change in volatility when in Profit 5 Settings o Step1 Click on Settings vet JBL Risk Manager V8 4 Trading Summary JBE Rick Manoger V8 4 Open Trades SR x D un Symbol Trade sector Sector Risk Risk INITIAL order status Profit or Loss
24. eviation Average Expectancy R 0 67 System Quality Number 335 80 Capital 25335 80 A 7 Cash 25335 80 Portfolio Comparison A 18 5474 Compare Symbol 240 FF 17 2095 Since First Order 11 02 2008 Here your portfolio is only up 1 84 but is performing more than 17 better than the XAO Index To edit view or delete any Open or Closed Trade or Capital click on that item and then click on the appropriate button below or simply double left mouse click on item to edit view Mew Trade Edit View Closed Trade Delete Closed Trade 14 Trade Performance amp Reporting All Trades Win Total 112285 61 Average Win 3071 54 6 Trade Expectancy 11553 Loss Total 715 76 Average Loss 259 2 7 Ay Days Held 15 7 Long Trades Win Total 12265 61 Average Win 3071 54 6 Trade Expectancy 1976 Loss Total 429 55 Average Loss 215 2 5 5 Av Days Held 14 7 Short Trades Win Total 0 Average Win 0 0 0 Trade Expectancy 236 Loss Total 286 21 Average Loss 256 3 2 Av Days Held 22 0 Total Brokerage 502 25 closed trades only Total Gain Loss Ry 11 59 Standard Deviation 2 37 Average Expectancy R 1 66 System Quality Number 1 55 Capital 61743 905 511745905 23 49 Cash 52919 73 Portfolio Comparison A 60 39 Compare Symbol x o FF 36 90 Trading Expectancy is probably one of the most important factors in trading investing success Unfortunately most people have not heard o
25. f strength and weakness of any market and will likely result in major price movement NT us cm o LAIT oa Me pes 1 Poat jam Li R 2 ERY dL Iu R1 2900 Target zo 2240 6S top 2 HI Click to View 10 minute Power Pivot Point Video http au youtube com watch v2g1OTIckBG48 18 RTC Risk Tolerance Calculator Settings Page tat al ou 7 49 2 12 49 2 Money Management The effect of one loss after another on Trading Capital 1 Enter Starting Capital 2 Enter Brokerage each way 3 Enter Both Maximum Risk values for comparison You will need Microsoft Excel otherwise download Excel Viewer 200 FREE below http www microsoft com download en details aspx id 10 Internet connection is required to download Excel Viewer The effect of one loss after another on Trading Capital After 20 losing trades in a row you have lost 16037 36 OR 54 165 fter 20 losing trades in a row you have lost 3309 81 OR 33 24 each wa DRAWDOWH COMPARISON The above shows how your Trading Capital can diminish from one loss to another based on your Maximum Risk It s irrelevant whether you replace s with s or the result remains the same how much risk are you prepared to accept Why not also try the Compound Growth Calculator 19 JBL Risk Manager Utilities Print Closed Trades Locate Print button beside Closed Trades to print with Portfolio performance To
26. f the concept Out of the 25 or so trading books l ve read only a few even touch on any aspect of Money amp Risk Management amp fewer still explaining Trading Expectancy Put simply trade expectancy is the average amount you can expect to win or lose per trade based on past results Here s the formula that is used to calculate trade expectancy TE Probability of Win Average Win Probability of Loss Average Loss As an example let s say that a trader has a system that produces winning trades 30 of the time That trader s average winning trade nets 1096 while losing trades lose 396 So if he were trading 10 000 positions his expectancy would be 0 3 1 000 0 7 300 90 So even though that system produces losing trades 70 of the time the expectancy is still positive and thus the trader can make money over time You can also see how you could have a system that produces winning trades the majority of the time but would have a negative expectancy if the average loss was larger than the average win 0 6 400 0 4 650 20 In fact you could come up with any number of scenarios that would give you a positive or negative expectancy The interesting thing is that most of us would feel better with a system that produced more winning trades than losers The vast majority of people would have a lot of trouble with the first system above because of our natural tendency to want to be right all of the time Yet w
27. fault Settings Cancel o You may also wish to fine tune amp adjust the share price range values 6 a settinas aol Risk Management Short Term Trading Medium Term Long Term Investing 24 ATR amp amp 10 Share Price Above ATR Multiplier Stop o ID 10 Money Risk Management RTC Brokerage Lang Trades Trade Size Above i Brokerage 95 Brokerage 10 69 95 15000 0 4 S000 0 35 1000000 0 13 MetaStock Directories Brokerage Short Trades E 9 95 15000 0 45 s000 0 4 1000000 0 15 Currency Symbol p Divide MetaStock prices by 100 Add Dir s Remove Diis Save Settings Default Settings Cancel Money Management Never risk more than 2 of your Core Trading Capital on any one trade You should also never trade anymore than 20 of your Core Trading Capital on any one Trade To optimize trade sizing we base our Core Trading Capital on available cash any realized Trading Capital which is your initial trade value or minus the profit or loss if each open position Stop was hit We use the Anti Martingale Fixed Percentage Method with a few little refinements and find it to be the most effective and consistent E g If you start with 25 000 your first trade is 5 000 and your maximum risk would be 500 less brokerage Your Initial Stoo Loss would then be set so if hit would result in a maximum loss of 500 What do we do for our next trad
28. formation and material contained herein is not a substitute for the obtaining of advice from a licensed adviser or dealer in securities and is not suitable to be acted upon as investment advice nor is it intended to encourage or induce persons to enter into securities transactions or particular securities transactions otherwise than as aforesaid Before making any decision on the basis of this information you need to consider with or without the assistance of an investment adviser whether the advice is appropriate in light of the particular investment needs objectives and financial circumstances of the user You are also prohibited in the absence of express written permission from Joseph Barrington Lew from mirroring or duplicating by any medium any material contained within JBL Risk Manager TRADEMARK ACKNOWLEDGMENT MetaStock is a registered Trademark of Equis International System Quality Number SQN is a registered Trademark of The Van Tharp Institute Money amp Risk Management are very important if not the most important issues that must always be addressed by anyone seriously considering trading the markets They cater for the preservation of both your initial amp when accumulated trading capital You may already have a great system or set of rules to determine what to buy but if your method of Money Management is clumsy you will lose money unnecessarily Once buying that share your role is no longer as a Trader but a Risk Manager
29. hat can now also include the excellent trading and performance algorithms of Dr Van K Tharp Joseph Barrington Lew Dr Van K Tharp talks about calculating a System Quality Number sw as quoted R Expectancy Standard Deviation of R multiplied by the square root of the No of trades If the number is above 1 65 then your system makes money at greater than a chance level Greater than 2 0 then it s a really good system amp if it s above 2 5 then its a GREAT system Total R Gain Loss Sum of all R Multiples R Expectancy Sum of all R Multiples Number of Trades R Multiples Reward to Risk ratio Nett Profit Loss Maximum Initial Risk Standard Deviation Square Root of the Sum of all the Variances No of Trades 1 Variance R Multiple minus R Expectancy and the result squared 50 100 trades would give you a reasonable indication regarding performance A minimum of 2 closed trades is necessary before it will display Closed Trades Symbol INITIAL Order FINAL Order Nett Profit Loss R Multiple Variance OXR Long 3 28 x 1668 29 95 5500 99 on 1 05 2008 4 05 x 1668 29 95 6725 45 on 26 05 2008 1224 46 22 26 after 25 days 2 11 1 57 BHP Long 42 30 x 122 29 95 5190 55 on 1 05 2008 40 x 122 29 95 4650 05 on 10 06 2008 340 50 6 56 after 40 days 0 62 2 20 BHP Long 44 67 x 115 29 95 5167 on 6 05 2008 52 x 115 79 95 5950 05 on 29 05 2008 783 05 15 1595 after 23 d
30. ice moves away from this zone and approaches either the first level of resistance R1 or the first level of support S1 market behaviour becomes increasingly critical Any rejection of these newly attained levels increases the likelihood of a return to the PP On the other hand a breach of either of these levels is regarded as market acceptance and a perceived change in the valuation of the instrument being traded Once the market has made a convincing break of a particular support or resistance level that level is considered to have reversed its support resistance role and subsequently becomes a test point for further market activity For example if the first level of support S1 is penetrated to the downside any return to that level is considered a test of that level s integrity The rejection of any price advance back towards the level of S1 is considered to be a successful test of that breach and adds to that level s credibility as a renewed valuation point Furthermore any additional move away from that level has the potential to force the market through the next level of support or resistance drawing players of even a longer time frame into the market and so on continually expanding the market s range of activity The longer time frame traders will wake up or become active as we expand price to and or beyond the inner levels of the Pivot System As price breaks through the levels of R2 or S2 they will most likely resolve the p
31. ium Term Long Term Trading 2 ATR S amp 10 You may alter values for trailing stop e g Use higher values for penny stocks with greater volatility 3 Select Currency Symbol mbll ondon Stock Exchange 3a Divide MetaStock prices by 100 Tick box to apply e g LSE price data pence to pounds and pence 4 Specify Brokerage Fees amp Charges Long amp Short Trades if applicable Brokerage Long Trades Trade Size Above Brokerage Brokerage O 69 95 15000 O 4 suu 0 35 1O 0060600 0 13 5 Click Add Dir s and Save Settings MetaStock Directories WletaStock Directories Cry Shares 4u 4521 4 Cishares Au ASXAB za Cr Shares 4u 45410 Shares 4u 45410 C iSharesau ASx1E MI 53 Add Dirs 6 Click Manage Capital Enter Starting Capital default amount hit Deposit Capital x Date alio Deccnpbion tertio Capial Manage Capital Mew Trac Deposit Wihdr aw Cancel 7 Initiate new Trade Click New Trade Long Trade or tick box to indicate Short Trade LONG TRADE sot Symbol Recommended Buy Quantity symbol Recommended Sal Quantity Bu Date Buy Pri A Fit y xdi au Or Sell Date Sell Price x Quantiby 8 Click in Symbol Box Click Folder Enter Symbol in Security box OK Bet seure a x I Geu y BERELEE LIMMET GSH A PIUSTEY LATA PATO I AR L e A Pies Ay AD i EESTON WEE ALE Pe Fie FREF zd Shaeg
32. nter your Starting Capital and then Deposit a Open Trades 0 Winning 0 0 Winning Total 0 Average Winner 0 0 0 Trade Expectancy 0 Losing 0 0 Losing Total 0 Average Loser 0 0 0 Average Days Held 0 0 Closed Trades giis Symbol Trade INITIAL Order FINAL Order Nett Profit sf y Capital Date 1 10 2009 Amount 25000 Description starting Capital t i Withdraw Cancel A Closed Trades 0 Won 0 0 Win Ts Lost 0 0 Loss Tota atest Win 0 0 0 Trade Expectancy 0 atest Loss 0 0 0 Av Days Held 0 0 Capital Management Description Date Amount Total Brokerage 0 00 Closed Trades Only Total Gain Loss R Standard Deviation Average Expectancy R System Quality Number Capital 0 Cash 0 Portfolio Comparison Compare Current Portfolio Create New Load Portfolio Settings Manage Capital New Trade Edit Help Close X Your Trading Plan amp How to Initiate a Trade 1 Entry Strategy Education amp Experience 2 Trade Sizing Strategy Money Management How many 3 Exit Strategy Risk Management Minimize losses 4 Profit taking Strategy Protecting Profits on the way up All 4 strategies of your Trading Plan must be in place before making any trade Entry Strategy Trade Sizing Strategy Exit amp Profit Taking Strategy EXAMPLE Trade 1 You have 20 000 to trade with so you buy 20 000 shares of XYZ Co
33. rice action in one of two ways First we will see an acceptance of the new found 17 value resulting in what we refer to as trend days where price seems to move only in one direction with force Alternatively if the new found value is not generally accepted by the longer time frame traders price will attempt to find its way back to the Daily Pivot Point An important point to remember about these Pivot Numbers is that they act as potential support and resistance zones throughout the trading day Keep in mind that pivot points are short term trend indicators useful for only one day until they need to be recalculated and JBL Risk Manager will do that for you each day As a definition a pivot point is a turning point or condition It is a level in which the sentiment of the market changes from bull to bear or vice versa If the market breaks this level up then the sentiment is said to be a bull market and it is likely to continue its way up on the other hand if the market breaks this level down then the sentiment is bear and it is expected to continue its way down Also at this level the market is expected to have some kind of support resistance and if price can t break the pivot point a possible bounce from it is plausible Why PP work They work simply because many individual traders and investors use and trust them as well as bank and institutional traders It is known to every trader that the pivot point is an important measure o
34. ry bon Rick Manager v Open Trades smi Trade sector sector uk Sk TIA order Sus Prov toss cnet STOP ol Or Trade BHP BHP BILLITON LIMITED HOLD Trading capitat 25000 cash 25000 LONG TRADE Stor Symbal BHP Recommended Buy Quantity 127 Anticipated Buy Total 4750 Open Trade Buy Date 11 02 2008 Buy Price 36 61 X Quantity 129 Brokerage 69 95 Actual Buy Total 4792 64 closed vs ote Joven tt tow eon Tame rn tocs Jos stop are stop erent stop status fenter ston Tomme s2 n pn er en 36 61 36 74 35 46 35 85 34 74 35 29 36 02 Symbol T 36 15 36 95 35 90 36 91 1 34 02 4 l 35 54 36 22 36 59 37 50 37 88 3722 37 35 1 34 02 1 36 82 37 09 37 48 38 19 39 03 3615 39 03 1 34 02 37 08 i 37 86 38 44 38 74 38 36 39 78 38 20 39 29 1 34 02 37 42 37 51 38 0 39 09 38 63 39 15 38 49 38 96 1 34 02 4 38 21 38 58 38 87 19 02 2008 39 90 40 22 39 70 39 70 1 54 34 02 37 72 37 91 A 39 35 39 53 39 67 40 05 40 39 20 02 2008 39 70 39 90 38 65 38 69 1 50 34 02 36 76 i 37 83 38 26 39 08 39 51 40 33 Closed Trai 7 Initial Stop Loss 2 Breakeven 37 69 Technical stop For Stock Split Maxim um Risk 500 Days Held 12 Trailing Stop 37 91 Next Trade amp 39 85 Preferred Initial Stop 262 58 A Saon Nettrofi 39 73 Based on current Stop Loss 37 91 Anticipated Sell Total 482035 A 27 71 Sell Date Sell Price X Quantity 129 Brokerage po 95 Sell Total Notes P a 5
35. x Capital Mi Descriptio Save Trade Cancel Cash 25000 Current Portfolio Portfolio 45x Blue Chip Create New Load Portfolio Settings Manage Capital Edit Hit Save Trade User Guide Close X optional Let us use an alternative Initial Stop amp update Recommended Qty ue Trade BHP BHP BILLITON LIMITED ORDINARY LONG TRADE Short Sector Materials Trading Capital 25000 Cash 25000 Symbol BHF Recommended Buy Quantity 110 Anticipated Buy Total 4727 35 Buy Date 23 01 2012 Buy Price 2 34 x Quantity Brokerage 69 95 Actual Buy Total Date open High Low Close ATR A stop Loss o Stop ATR Stop Current Stop Action New Trailing Stop Time Stop s2 s1 pP r1 r2 Initial Stop Loss 2 Breakeven Technical Stop m for g Stock Split Maximum Risk 500 Days Held A Initial Stop 35 07 Mext Trade al Preferred Initial Stop ia Last Close Based on current Stop Loss 39 066 Anticipated Sell Total Lowering Preferred Initial Stop from 39 07 to 38 00 is higher risk amp results in reduced Share Quantity 12 BHP BHP BILLITON LIMITED ORDINARY LONG TRADE Short Sector Materials Trading Capital 25000 Cash 25000 Symbol BHP Recommended Buy Quantity 153 New Qty Exceeds Max Trade Size Anticipated Buy Total 7 97 Buy Date 23 01 2012 Buy Price 42 34 x Quantity a Brokerage 69 95 Actual Buy Total Date Open High Low Close ATR MA
36. y an economic boom or investor psychology The longest and most famous bull market is the one that began in the early 1990s in which the U S equity markets grew at their fastest pace ever BEAR Market A period in which market prices fall accompanied by overall pessimism If the period of falling stock prices is short and immediately follows a period of rising stock prices it is instead called a correction Bear markets usually occur when the economy is in a recession and unemployment is high or when inflation is rising quickly The most famous bear market in U S history was the Great Depression of the 1930s Static Initial Stop vs Dynamic Initial Stop The Initial Stop Static default option during new trade set up basically answers the question If I have x dollars to spend and I m willing to risk up to y amount includes brokerage both ways how many shares should I buy or sell and at what price should my initial Stop Loss be My preferred option it avoids Stop Gunning amp best optimizes available CORE Trading Capital The Preferred Initial Stop Dynamic option during new trade set up tries to answer the question If I have x dollars to spend and I m willing to risk up to y amount includes brokerage both ways how many shares should I buy or sell if I placed my Preferred Initial Stop Loss at price z 20 R Multiples R Expectancy System Quality Number It is with great respect and appreciation from the team at IITM t
37. y in the share market So it makes logical sense to do what the majority are not doing and that is follow a proven but simple Trading Plan Some of the best Traders in the World only get 50 of their trades right in other words they only make money 50 of the time The difference is successful traders use a trade sizing strategy exit immediately when the evidence indicates they have got the trade wrong and when in profit let the market signal when to get out and not their friends or emotions After entering a position always assume you have made a mistake unless the market tells you otherwise because the chances are you probably have It ll be easier to close that losing trade if you feel you made the wrong decision in the first place Some may self talk ve made 100 profit on this share lm not greedy lm getting out What this trader is actually saying is m afraid of losing all my profits or if my friends find out could have made 100 profit and it then went down they may say was too greedy These traders can t wait to tell their colleagues how well they did recently but they never mention their losses What they need is a Trading Plan or a list of rules to follow and understand Co C1 O1 e gt ia D o 8 Click on Manage EET 218 xl Trading Summary JEL Rist Manager vs Open Trades e aii Symbol Trade Sector SR R INITIAL Order Status Profit or Loss Current STOP Hold or Exit and e
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