Should you trade to strike the lottery ?
That is 1 or 2 trades to define your entire trading career ?

Any comments ?

These, to me,
are striking lottery.

They are the 1 trade wonders.

I wasn't sure how I would trade the turtle system,
until the other day,
csk said the turtle system is to catch the outliers,
I thought why not take this idea to the extreme.

Any comments ?

Oh well,
below are some stocks that may be 1 trade wonder,

1ST SOFTWARE CORP LTD
BENEFUN INT HLDGS LTD
CHINA ENTERTAINMENT SPORTS LTD
DIGILAND INTERNATIONAL LTD
FHTK HOLDINGS LTD

But do not, even for a second,
believe that you have found a gem.

And when there are manias, panics normally follows.

Sometime lightning can strike twice.

If you learn your lesson,
and understand panics and manias,
you know you should be out of this one already.

Sometime running at 1st sign of trouble may seem premature,
but hey, you got your multi bagger.

What more do you want ?

Finally,

stocks are for investment.
Nothing beat finding the real gem.



Take care!

I want to strike lottery too :). Does not matter if that is from market or from Singapore Pools.

But when trying to use TurtleFarm to trade SGX stocks, I have to ensure that I have enough capital to ride through all the rough patches of this trading system, while I can expect a reasonable return taking the minimum risk (subjective noted here).

I think CSK has ever mentioned, trading stock is more risky then trading futures. Stock, or the company's share can become worthless when the company goes under. For me, one way trying to reduce this risk is to stay clear of companies whose fundamentals I am skeptical. These are mainly pennies stocks.

Next, in order to ensure proper execution of entry and exit (especially exit, as in the case of turtle trading, it exit all positions at one go) without much slippage, liquidity is concern. I will avoid illiquid counter.

After finding companies that met the above 2 criteria, when we have to see how will their stock price movement fit the turtle trading system. I prefer a large number of trades, spanning across a longer time frame (meaning different market condition). The total winning better don't just rely on 1 trade (which I have no confidence that the next one will arrive, leave alone when it will arrive). The equity curve should not have huge drawdown that will scared the shxt out of me and make me more confident in following the signals. The profit factor is also considered.

These are from Nylect:





And compare them with those from SGX:





Of course the above criteria will greatly reduce my number of lottery strikes. But I am in here for a long run, and I need to preserve my trading capital. Getting on board a stock just before the run of the century, is something that I can HOPE for only. But consider the capital, time and effort be tied down, if the run is not coming I may be on my 6th consecutive losses, I would rather leave these stock alone.

Or I would queue at the Toto booth, the reward/risk ratio is better.

All comments welcome.

HC,

your risk concerns are very valid.
Many people did not model extreme events.

What if the company goes under ?
Or what if its suspended ?
Can you get out when everybody want to get out?

Ok, Let's come back to Nylect.
The risks are not that high.

Using an account size of $10,000 for example

The entry is 12000 * 0.14 = $1680
The maximun drawdown is -$282
(This is the only thing I like about turtle system, very small drawdown)
and the profits are in excess of $6000


*Assuming you took profit today

Hi,

Let's tackle some of the issues one by one

Suppose the stock is trading at 0.005, there might be some problem because if you buy at 0.01 and cut loss, you would lose 50%. This I think is not captured in the program.

Now back to Nylect Tech



Under normal market conditions, this might be the outcome.
Even if the extreme situation, the turtle sizing perform quite well.
But note, nobody will model extreme situation in this manner.

What if the 4th trade is not coming?



When posting my reply last night, I was pondering on this idea: how to catch this kind of 1 time wonder stock?

Typically, they run at the end of bull run; or at least at the later phase of the bull run. So if we can put turtle trading entry rule on them at this time, it increases our chances of catching them. To reduce risk, the actual position size is reduced. As for the exit, I think maybe we have to deviate from turtle exit when we have a huge run up. Once we strike lottery and exit, never look back. Concentrate on the next one.

I can see that the above thinking has a problem: not all laggard pennies will strike lottery in each bull run. I still have to solve the issue of betting on the wrong horse.

Any thought?

Every week, punters will queue up at Singapore Pools and buy $1 (or perhaps more) of QuickPick and hoped to strike the big prize.

For many, the last Yeah will not come and the cumulative losses add up.

It seem then the 1 time wonder stock has the profit profile of a lottery.

If that's the case, then the question on how to strike a lottery or find the 1 time wonder stock will be a difficult question!

But then again is trading ever easy? I'm not sure if trading the RSI divergence, turtle system or any other form of security analysis any easier.

Whether the last trade is coming or not, is not important.
For many traders, it is not that the last trade will not come, but they never let the last trade come.

Just like what HC has commented,
look at BBR,
the last strike at around 2000, when the markets are mad.
And this time, around 2007 when the markets are ___________ (will fill this blank a few years later)

So can 2 events be significant ?

Back to spotting the 1 trade wonder,
There are 3 problems.

One, what is a bull market ?
Two, what is the cycle for the bull market, that is will it ever come in the future again?
Three, then what stocks are candidates for 1 trade wonder ?

If not we will bleed to a slow death.

Undead you hit the nail on the head.

This particular stock has been top volume for awhile,
whatever reason I'm not sure.

Digiland has made an entry @ 0.025,
unless it rockets up,
we will follow the turtle stop @ 0.015.

Congrats, Undead.

You have strike lottery! :)

Thanks HC,
Perhaps the secret is that I bought a "lucky" number worth of Digiland.
I'm not too sure.

--- ---
Anyway,

Digiland closed 0.055 , high 0.065.

I think by any trader's yardstick,
a 100% gain in less than a day can be considered good.

Of course, if you have bought it,
you will wonder when is a good time to lock in the profits.

Let us revisit the concepts of the turtle trading,
it is to catch the odd outliers which hopefully bring us tremendous profits and will offset all the small losses that we incurred along the way.

But take note of 2 things
- If it "climax", then the turtle stop will be too slow to catch the profits

- Make no mistake about it. This is no investment. Watch with hawk eye and out when the stop is triggered.

--- ---

So get your own copy of turtle farm and do some homework ?

Digiland (2007-05-03 Closing Price $0.05)

This is the lottery strike by Undead. I can only say congratulation and drools.

I really cannot see how am I going to trade this using TA (or turtle rules for that matter). Maybe Undead wish to share some light?

Hi HC,

I can assure you my copy of Turtlefarm is the same as yours.
(CSK can verify it).

But I have tweaked with the parameters and applied to weekly charts.
I had applied the rules consistently.

The turtles have thought about which markets to trade. For example one of the considerations is correlation.

And therefore, I take it that we need to apply the turtle rules to the correct kind of market.

Remembered I asked why did you choose CapitalLand?
Unfortunately you chose it by chance and that's the end of discussion.

Take a look at the charts that were posted.
They have the same characteristics.
They are different from SGX, CapitalLand etc.

(I'm not saying the rules cannot be applied to SGX or CapitalLand)

And this is the market.

May you strike the next lottery before the end of the bull.

Undead:

Mmm... then you can strike must be because of the data vendor you use, or the trading platform you have, or the PC you use, or the chair you sit, or direction of the main door facing, or colour of underware you put on when trading, or the god you pray to, or ...

the thing between your ears is different from mine :).

OK, more serious note. I re-read this whole thread, and I think I understand all you previous posting better, and the pitfall of my reasoning.

Thanks for pointing out another way to trade.

HC,

Picking 10 cent in front of the steam rollers or slow bleed to death.
I got much to say but I may not be able to say it well.

But here's an interesting article.
http://www.gladwell.com/2002/2002_04_29_a_blowingup.htm

How is it related to striking lottery?
Hmm, I have no idea.

But for sure this way of trading is not unique.
Just that we often take things for granted.

I has been looking at the above shortlisted counters for a few weeks, and more I look at it, the more I think this type of trading does not suit my style.

Trading is really personal.

If somebody throws a big bag of gold at you,
will you happily catch it,
or crush to death by it ?

Warren Buffett once commented that if he missed out on a great deal,
he would not lose sleep over it,
especially if he did not fully understand it.

That is why he sat out the last great tech run.

And where are the guys that made 10000% returns then ?
You tell me.