Saturday, April 5, 2008
Welcome...
In this blog, I am going to talk about Sylvain Duport, an independent trader having carried off twice a French trophy called "Capital de la Bourse". I am going to try to bring you answers and explanations about the great stock exchange performances acquired by this young trader of 27 years. In fact, he multiplied his capital by 30 in six months during his first participation in the trophy, then the following year, he multiplied it by 80...
global presentation
Sylvain was born on November 10th, 1978, in Melun a southeast suburbs of Paris.
He acquired the STT Baccalaureate in management accountancy. He obtained a DUT in management of firms and administrations and as specialty he chosen finance and accountancy. After that, he followed courses of auditing and finance (Paris XI). Finally, he made a master in finance and capital markets in the Graduate School of Management (ESG) in Paris.
His trading approach can be summarized by a combination of swing trading on values, or short-term positions which break or follow the market tendency.
He acquired the STT Baccalaureate in management accountancy. He obtained a DUT in management of firms and administrations and as specialty he chosen finance and accountancy. After that, he followed courses of auditing and finance (Paris XI). Finally, he made a master in finance and capital markets in the Graduate School of Management (ESG) in Paris.
His trading approach can be summarized by a combination of swing trading on values, or short-term positions which break or follow the market tendency.
Sylvain's golden rules
Here are the main rules followed by Sylvain Duport:
- First of all, he considers that the market operators have all information and that the price of a stock reflects the general agreement of the market.
- According to him, the market has three movements corresponding to three units of time which are the short, medium and long-term.
- The market has a memory: resistances and support are predictive of the market evolution.
Resistance: It's the price level at which selling is thought to be strong enough to prevent the price from rising further.
Support: It's the price level at which demand is thought to be strong enough to prevent the price from declining further.
- Volumes of investment are necessary to support stock's value especially with an increase tendency.
- The increase of a stock's value is stronger and more lasting if it is reinforced by the stock market index to which it belongs.
- A tendency is said to be bull, if the last summit is higher than precedent one. (the same reasoning for a bearish tendency)
- First of all, he considers that the market operators have all information and that the price of a stock reflects the general agreement of the market.
- According to him, the market has three movements corresponding to three units of time which are the short, medium and long-term.
- The market has a memory: resistances and support are predictive of the market evolution.
Resistance: It's the price level at which selling is thought to be strong enough to prevent the price from rising further.
Support: It's the price level at which demand is thought to be strong enough to prevent the price from declining further.
- Volumes of investment are necessary to support stock's value especially with an increase tendency.
- The increase of a stock's value is stronger and more lasting if it is reinforced by the stock market index to which it belongs.
- A tendency is said to be bull, if the last summit is higher than precedent one. (the same reasoning for a bearish tendency)
Swing trading on stocks
Basically, Sylvain is a trader on stocks, he uses the Chartist-graph base, with candlesticks a known shape by traders, as well as a bit of technical analysis and reading of order book (An order is an instruction from a customer to a broker to buy or sell on the exchange). He tries to understand the movements of short term prices, between support and resistances, or inside a channel of tendency. He searches for rebounds or breaks of tendency. Rebounds are movements between support and resistance, market price is returned from a line to other one. Break in stocks are in general followed, either by acceleration in increase, or by acceleration in fall of the stock.
http://www.swing-trade-stocks.com
http://en.wikipedia.org/wiki/Swing_trading
http://www.swing-trade-stocks.com
http://en.wikipedia.org/wiki/Swing_trading
Short term trading and overnight
Sylvain's trades lasts often some days to some weeks. Usually, 10 % of his trades are intradays, 30 % are swings of some days (two or three days), 40 % are swings of some weeks (one or two) and finally 20 % can be considered as middle term (more than two weeks to two months). He prefers markets in established tendency rather than halting markets.
In fact, the management of positions is less wearing in overnight (it means that positions are not enclosed at the end of day) than in intraday (it means that positions are enclosed before the end of journey), where it is necessary to remain every second in front of your computer to check your positions. In fact, overnight trading allows greater flexibility and margin of error. So, it gives more detachment and control of the market tendency. Also, it avoid wrong signs on which the intraday trader can become trapped.
In fact, the management of positions is less wearing in overnight (it means that positions are not enclosed at the end of day) than in intraday (it means that positions are enclosed before the end of journey), where it is necessary to remain every second in front of your computer to check your positions. In fact, overnight trading allows greater flexibility and margin of error. So, it gives more detachment and control of the market tendency. Also, it avoid wrong signs on which the intraday trader can become trapped.
Trend following and breaking
Sylvain's approach is based on an observation method of markets. The purpose is to never be against the market tendency. He plays the market tendency rather than to be right against the market: it is the following trend.
Sylvain prefers acceleration on stock's values and therefore imposing breaks on big volumes.
First, he anticipates movement by taking position on a stock. He reinforces his position one or twice if the movement is confirmed and accelerates. His basic principle is to carry his winning positions as long as possible and cut his losing ones as quickly as possible.
http://en.wikipedia.org/wiki/Trend_following
Sylvain prefers acceleration on stock's values and therefore imposing breaks on big volumes.
First, he anticipates movement by taking position on a stock. He reinforces his position one or twice if the movement is confirmed and accelerates. His basic principle is to carry his winning positions as long as possible and cut his losing ones as quickly as possible.
http://en.wikipedia.org/wiki/Trend_following
The main shapes of the technical analysis
The double-summit:
The "double-summit “ is a reversal shape: The double-summit materializes after a stage bull when a stock fails twice to cross an increase point (stock's value).
In general, the volumes of transaction during second summit are weaker than during the first. If the lowest recorded between both summits is crossed in fall, the shape is validated. (It means that the trader can invest on this stock.)
The double-hollow:
The "double-hollow" is another reversal shape: The double-hollow materializes after a bearish stage when a stock rebounds twice on the same point. In general, the volumes of transaction during the second hollow are weaker than during the first. If the highest recorded between both summits is crossed in increase, the shape is validated.
Head-shoulders:
The face in “head-shoulders” is a major reversal shape. After a long bull tendency, it decomposes into several stages. First of all, market price attains a higher one which is the left shoulder. A profit-taking follows towards a low point (the support). A strong rebound drives the value on a new summit more high (superior to the previous one), it is the head. The stock falls then to its previous low point (the support). The right shoulder is materialized by the last rebound. When it attains its second shoulder, the stock begins its fall. When the low point is broken, it validates the shape of reversal. (the support is called " line of neck ")
Hasta la vista...
I hope that reading this blog will have given you the desire to learn about this famous figure of finance, Sylvain Duport . As you can suspect, the world of finance being very broad, I cannot show you everything on this blog. So if you want more explanations, or you are interested by financial news you can visit these sites:
http://money.cnn.com/
http://money.cnn.com/magazines/fortune/
http://www.marketwatch.com/
http://www.thestreet.com/
http://www.bankrate.com/
http://www.forbes.com/
Otherwise you can buy the French book "Confidences d'un trader", which tells the history of Sylvain Duport in more detail.
I Hope that you like my blog.
http://money.cnn.com/
http://money.cnn.com/magazines/fortune/
http://www.marketwatch.com/
http://www.thestreet.com/
http://www.bankrate.com/
http://www.forbes.com/
Otherwise you can buy the French book "Confidences d'un trader", which tells the history of Sylvain Duport in more detail.
I Hope that you like my blog.
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