China's FTSE 100 swing trades

[barjon]

china

I've been away for the week again so not been following as we go along.

First to say is that August not proving a good month so far - I'm 5L 3W with 1 still open and looking rocky 'cos it's taking too long.

Second, I'm still not sure how you are taking your trades. Your second bite at RSL doesn't seem to fit with FTM - see pic (I've stuck in the MAs again). Also not sure how you got into the CPG trade, since according to me, previous day high was not exceeded. Glad you pulled the NG order though

On the trailing stop thing I'm not so unequivocal as D70 but I don't like them because I don't like giving money back and more importantly because I know what I want in R:R terms to keep my account ticking along - don't care if I miss the odd sky rocket. A good swing trade usually moves pretty fast and cleanly so there is something to be said for trailing stop initially before target zone is reached to lessen loss or even move to slight profit for those that dither about and won't get a move on - probably worth experimenting with, although I don't bother.

jon

 

[VendorExterminator]

Yes, that's all it is at this point VendorExterminator: opinion. But I'd be happy to hear more about how trailing stops might be more effectively used - I am not used to trailing stops, havng always in the past set a £ profit target and got completely out when it is reached.

I have been using the standard aproach on hikkake trades, based on capital risked - i.e. when price advances to £ value of capital risked, move stop to b/e. If it advances to 2r, move to r, and so on. It follows that if r=£X, profits will always be £X less than the best price achieved. I can think of other ways to trail stops, but haven't tested them yet - you seem to use a successfully tested method, care to enlighten us?

Well the thing about whether to use trailing stops is this; "it depends". There aren't many methods' results, which can't be improved by staying in profitable trades longer than the original rule-set dictates. But, there are trade offs for doing so. Also, whether the individual has the will or mental capabilities to run trades is another thing - few can. Some methods absolutely require a trailing stop (think Turtles), and some methods can be improved with the strategic use of a trailing stop in "special" circumstances. So really, it depends.

 

[DionysusToast]

...and of course, the best exit strategy is only ever known in hindsight.

I've seen people mathematically 'prove' that certain exit strategies are inferior/lead to losses and I've seen people make money from those very strategies.

I think it comes down to what you are comfortable with.

 

[barjon]

...and of course, the best exit strategy is only ever known in hindsight.

I've seen people mathematically 'prove' that certain exit strategies are inferior/lead to losses and I've seen people make money from those very strategies.

I think it comes down to what you are comfortable with.

Suppose it depends how you define "best", toastie. I know that if I can average 1.5:1 return to risk in winning trades my account will continue to grow (although 1.5 wouldn't cut the mustard this August so far ) so "best" for me is defined in that context.

So I won't take trades unless there seems at least 1.5:1 in it and I'll exit to limit at pre-determined levels since I find that the "best" way of being in some control of keeping the average up. All TA based, of course, so I'll chuckle for you

 

[China Diapers]

First to say is that August not proving a good month so far - I'm 5L 3W with 1 still open and looking rocky 'cos it's taking too long.

That does make me feel better, and clearly I am over-trading.

Second, I'm still not sure how you are taking your trades. Your second bite at RSL doesn't seem to fit with FTM - see pic (I've stuck in the MAs again)

Well the price pierced the fast MA and reversed so this would qualify as an L2 yes. Granted it may have been a bit of a shallow retracement. Does the price need to make a new low? The way I read it only successive lower highs are required.

Seems like I am really struggling with this for some reason.

Also not sure how you got into the CPG trade, since according to me, previous day high was not exceeded. Glad you pulled the NG order though

I am new to spreadbetting, I thought getting filled at the wrong price was just something you had to live with with these jokers. Maybe I should have added the spread to my entry price.

I was looking at the NG chart and asked myself what Barjon would say when he saw it. Order pulled.

 

[tomorton]

Suppose it depends how you define "best", toastie. I know that if I can average 1.5:1 return to risk in winning trades my account will continue to grow (although 1.5 wouldn't cut the mustard this August so far ) so "best" for me is defined in that context.

So I won't take trades unless there seems at least 1.5:1 in it and I'll exit to limit at pre-determined levels since I find that the "best" way of being in some control of keeping the average up. All TA based, of course, so I'll chuckle for you

I'm sure this is sound jon. My look back at July hikkake swing oppportunities on the FTSE100 members confirms that r:r 1:1.5 would clearly be a winner. r2.0 does equally well but at 2.5 the pattern becomes break-even and at higher targets returns decay very fast. I had already cancelled my trailing stops and have now put in 1.5r limit orders on open positions and pending orders.

 

[China Diapers]

Guys I am taking some time out to rethink this so won't be posting for a while. Feel free to continue discussing the pro's and con's of trailing stops, US versus UK stocks and whatever else takes your fancy.

 

[D70]

Guys I am taking some time out to rethink this so won't be posting for a while. Feel free to continue discussing the pro's and con's of trailing stops, US versus UK stocks and whatever else takes your fancy.

That hasnt lasted long.
Methods dont make money every week china.
You need to persevere.

 

[China Diapers]

Thanks for the motivation

I'm persevering, there's a lot going on behind the scenes. In fact the hard work has only just begun but I won't be taking any more trades right now.

I'll be back.

 

[China Diapers]

Word up homies, I'm back. That flew by.

Giving this trading malarkey one more go, if I am not making money in 6 months I am going to call time on my hobby. I only spend 30 minutes a day checking charts and placing/adjusting orders but that's 30 minutes I could spend playing with my daughter, chatting to my wife or reading a book rather than contributing to IG Index's bottom line.

So the methodology, I ditched the MA's and am now looking at breaks of swing highs/lows to determine the trend, seems to work better.

For February I have had 8 losses and 4 wins, that's a 33% win rate with an average 1.85 R:R so I am almost breaking even. Somehow I managed to miss a winning trade in ULVR which I'm still kicking myself over.

Currently two open long positions, TT and RR (stop moved to BE).

 

[China Diapers]

Oh, ITRK not RR, RR was stopped out.

400 posts, woof!

 

[China Diapers]

NXT was another winner I didn't take as would have had to risk more than 1% of account, so the win rate could have been a bit higher, about 43%

 

[tomorton]

Hi China - Nice to see this thread running again.I continue to try to make money swing trading the FTSE100 stocks. I have learned two important facts that support my approach -

1. I lose money / make less money when I disregard the index. What the index is doing, and making sure I am in the same trend direction (or flat) has far more impact on my performance than selecting particular FTSE members or perfectly timing entry / exit.

2. Once I have reached a certain profit level in a given month, it is most unlikely I will significantly exceed it, more usually I will reduce the month's gain to break-even. Of course, it could be that having reached a given gain level in £ I should alter my trading style for the remainder of the month, but I don't find schizophrenic strategies suit me personally - much better for me to cease trading until the 1st of the next month.

I don't say these two points are applicable to everyone, probably No.2 would be regarded by many traders as irrational (I used to think so too), but as our objective is to make money I am more concerned to make an imperfect system work tolerably well, rather than find a nearly perfect but more complex system that demands more finesse and carries more risk of execution error.

 

[China Diapers]

Hi China - Nice to see this thread running again.I continue to try to make money swing trading the FTSE100 stocks. I have learned two important facts that support my approach

Hey Tom, thanks and good to see you are still at the swing trading, we're in this together

1. I lose money / make less money when I disregard the index. What the index is doing, and making sure I am in the same trend direction (or flat) has far more impact on my performance than selecting particular FTSE members or perfectly timing entry / exit.

I hear you on this one, at the moment I am also trading exclusively in the direction of the index.

2. Once I have reached a certain profit level in a given month, it is most unlikely I will significantly exceed it, more usually I will reduce the month's gain to break-even. Of course, it could be that having reached a given gain level in £ I should alter my trading style for the remainder of the month, but I don't find schizophrenic strategies suit me personally - much better for me to cease trading until the 1st of the next month.

So you stop trading when you reach a satisfactory profit level for a particular month? Well if that works for you then great, but I would be nervous I would miss out on some good trades which could have made it an awesome month, and the following month could easily be a stinker. Make hay while the sun shines

I have a mate who day trades forex, and he subscribes to the "make x pips a day then go play golf" school of thought, I don't think it's working too well for him, I don't think he gets to play much golf : )

Thanks for sharing our insights.

 

[barjon]

............I hear you on this one, at the moment I am also trading exclusively in the direction of the index....................

Hi, China

Good to see you back

Index is King Kong, of course, so a good plan. Not always easy to be confident about the direction of the index over the expected duration of the trade, though

Shares that are bucking the index trend significantly are often good candidates should the index falter or retrace for a bit, but you have to be careful. Generally, I won't go more than half position and quick to depart at the first sign of trouble if the index recovers its poise.

 

[China Diapers]

Hi, China

Good to see you back

Index is King Kong, of course, so a good plan. Not always easy to be confident about the direction of the index over the expected duration of the trade, though

Shares that are bucking the index trend significantly are often good candidates should the index falter or retrace for a bit, but you have to be careful. Generally, I won't go more than half position and quick to depart at the first sign of trouble if the index recovers its poise.

Thanks Jon

 

[China Diapers]

Btw I am keeping stats on win rates for my inside bar trades (I know you're not keen on these) as well as two bar retracements, should be interesting to see the results once I get a big enough sample.

 

[China Diapers]

Wow what a few days I have had.

Yesterday my team beat their arch-rivals, the despicable Woolwich Wonderer's so that made my day.

Then this morning I had an unexpected pleasant surprise when I checked my account…the Intertek trade which I had given up all hope of hitting its target only went and hit its target in early trading for a whopping 6.3 x R!!! Awesome, got to love the narrow range reference bars.

So now this brings up the question of accounting, the trade was initiated in February but profits realised in March, from what little accounting I have picked up profits are booked in the period they are realized, right? So if I include the profit in March it makes sense to include win rate, R:R, duration in the March stats as well?

 

[tomorton]

China - I take account of trade outcomes in the month in which the trade closes. Anything before the exit is just unrealised potential profit / potential loss.

 

[China Diapers]

China - I take account of trade outcomes in the month in which the trade closes. Anything before the exit is just unrealised potential profit / potential loss.

Yes makes sense, and I guess then it also makes sense to include it in the win rate etc. for March.