Deadline June

[Adamus]

What next ...

For about 2 years now I've been searching for a part-time IT job and have never really come close to finding one.

In that time I have been withdrawing funds from my trading account to pay my way and with only 2 systems deployed live, despite the equity swings I think I detect a downwards trend.

My ability to get more systems deployed quickly is radically slower than expected.

So I am mulling over the options.

(1) Making money trading systems is not profitable enough due to systems deployed being limited - when can I get more deployed?

(2) Part-time paid work has not materialised - can I find something

(3) Full-time paid work is the most reliable option but the one I have the least attraction for - for how long, earning how much, and can I hack it day-in, day-out?

(4) Discretionary trading - can I put my experience in the markets to work and learn to trade and earn £2000 (USD$3000) per month? Every question I ask myself to help myself weigh up this option has got a vague, wishy-washy answer, could be this could be that. I need to think up a business proposal for myself - set up a discretionary trading business - how long is the ramp-up to success, how much money should I risk, I need to be definite about that at least, with reference to some credible sources that suggest the numbers are realistic.

:?:

 

[Yamato]

Throughout your decision process don't forget the saying "scared money never wins".

That's why I felt uncomfortable with your title "Deadline June".

I've always been in a rush to quit my job and I've kept blowing out my accounts since 1997. The investors, with my systems, have made over 10k. How's that? Maybe my systems got better in the meanwhile. But partly it's also because they've kept slowing me down in everything I was trying to do on their account.

So the lesson here is that you can't make money if you're in a rush. And you will be in a rush until you will have to depend on the money you make from trading.

It seems like a contradiction but it is not. First you make the money WITH trading to support yourself, and THEN you quit your job. You can't first quit your job, and then make the money with trading. Imagine that even without quitting my job, the pressure to make money with trading was so much that I've never made any.

Here's a fresh example from today, during my 14th year of trading:



Money made? -40 dollars, and it's a miracle that I didn't blow out my account once again.

 

[Adamus]

Throughout your decision process don't forget the saying "scared money never wins".

That's why I felt uncomfortable with your title "Deadline June".

I've always been in a rush to quit my job and I've kept blowing out my accounts since 1997. The investors, with my systems, have made over 10k. How's that? Maybe my systems got better in the meanwhile. But partly it's also because they've kept slowing me down in everything I was trying to do on their account.

So the lesson here is that you can't make money if you're in a rush. And you will be in a rush until you will have to depend on the money you make from trading.

It seems like a contradiction but it is not. First you make the money WITH trading to support yourself, and THEN you quit your job. You can't first quit your job, and then make the money with trading. Imagine that even without quitting my job, the pressure to make money with trading was so much that I've never made any.

Here's a fresh example from today, during my 14th year of trading:

View attachment 106708

Money made? -40 dollars, and it's a miracle that I didn't blow out my account once again.

I completely believe you. Scared money affects your decision making process. If you let fear affect your decisions, you're diverging from the straight and narrow.

But this is strategic planning, not tactical discretionary trading calls.

I fully admit that trading by eye scares me physically when I do it. I sweat and I get adrenalin rushes. I guess that's why I didn't pursue that road back in summer last year when I found myself in a dead-end with my systems and data. I was too highly leveraged.

But this decision about what to do next has got to made in the cold hard light of day without any fear telling me to get a job because trading is scary.

I'm going to root out as much literature and articles online as I can find with info about the kind of returns you can make with what I have available, and the number of pitfalls on the way. I have enough experience now to spot real information and to avoid trading hype of all sorts. So then I'll put together a plan.

And then I'll weigh it up against the other options.

But thanks for trying to help.

 

[HAL 9000]

Wow..... I've just skipped through this thread from the beginning and I may have to go and get some asprin.

I wish you all the best, but f*ck wow.

 

[Yamato]

You're welcome.

My experience tells me that if you have a deadline of a few months to become profitable, you won't be likely to succeed, whether discretionary or automated. Because, you see, in automated trading you're still responsible for selecting the systems that will be traded. I've had profitable systems for years, and I still haven't made any money with them. But the investors did, because they weren't in a rush.

You had your "Deadline June", which rushed you. I had my hate for the office, which rushed me to get things done not in 6 months like you, but in one day. I've always traded as if I had to quit my job tomorrow. And I never learned. Like I said in my journal, trading is like fishing and you can't jump in the water and rush your fish.

 

[Adamus]

You're welcome.

My experience tells me that if you have a deadline of a few months to become profitable, you won't be likely to succeed, whether discretionary or automated. Because, you see, in automated trading you're still responsible for selecting the systems that will be traded. I've had profitable systems for years, and I still haven't made any money with them. But the investors did, because they weren't in a rush.

You had your "Deadline June", which rushed you. I had my hate for the office, which rushed me to get things done not in 6 months like you, but in one day. I've always traded as if I had to quit my job tomorrow. And I never learned. Like I said in my journal, trading is like fishing and you can't jump in the water and rush your fish.

It did rush me - last year in summer I made some expensive mistakes. But maybe there was no way to do it without making mistakes. Even if it was just taking too long and running out of money.

This time though, there's no deadline. I might start a new thread - 'my journal 2'. Only kidding. So no rushing my fish. Especially not if I try discretionary trading again.

So what is your plan with Crude ? It looks like you're starting up a HFT system.

 

[Yamato]

I don't know what HFT means, but I am planning to keep observing CL, because it is the one that gives the most opportunities. If you had to focus on one thing, I'd always advise CL.

Low spread, great volatility, always, low commissions.

Last night I ended up making one last trade afterwards, and ended up with a profit of 150 dollars.

If I could make 100 dollars every day I could quit my job immediately.

I think I'll figure out a way if I stick to it long enough.

The basics of my method (which is not profitable yet) is that I look at 1-minute candles.

Other basics is that I cannot have more than one candle against me. I've written a lot about it here:
http://www.trade2win.com/boards/trading-journals/85510-my-journal-2-a-210.html#post1446762

 

[drolles]

Words of support

Adamus,

Why is it such a problem of going to get a contract role? With your systems there is no problem with running it automated – in fact one of the key advantages of automating systems. You will obviously need to have some very through risk management around dealing with problems (e.g. dropped connections, etc). I agree with Travis, slow down and don’t run scared money.

If you start to change your approach and trade discretionary (which by your own admission you are not very good at) you are getting more diverted than going and getting a contract to live off. Yes, it means hard work but as you’ve displayed while you have been keeping this thread up-to-date you are not afraid of that.

Kind regards,

drolles

 

[Yamato]

Let's go over it again, even if it were just to repeat it to myself:

1) first we need to make enough money to live for the rest of our life OR AT LEAST we need to prove that we are consistently profitable on a monthly basis (producing the equivalent of a regular salary) and keep it up for 12 straight months.

2) then we can quit our job.

I will continue this reasoning on my own journal:
http://www.trade2win.com/boards/trading-journals/85510-my-journal-2-a-213.html#post1474198

 

[Adamus]

Timing is everything

Thanks for banging on about it (although I think you're being a bit dogmatic about it Travis) - going over my situation again, I have to weigh up the pros and cons of each option I listed but what I've done now is to have launched myself into the process of finding a programming contract where the employers may make me an offer to start right away.

That's where the urgency is coming from - I've gone off looking for work before I'm ready to leave the systems up and running on their own all day. Actually though what I should be doing is consolidating the systems and ironing out the kinks and the quirks so I feel happy about leaving them running all day. I leave them running already 6 hours overnight, but 8 or 10 hours during European peak time is a step up.

So I guess I need to consolidate first, and then decide on the options for the next phase.

I've bought a new laptop to feed the beast that is NT7 and I'm now renting a Win2003 server to run it on in the US. So I've got a few tasks on my to-do list.

I also want to extract the combined profit and losses for both systems and put them into my risk analysis app to get several of the stats I like to see which NT7 doesn't produce - like the optimal fixed fraction for a portfolio. Another multi-day task, maybe even 100 hours. If I started working next week, assuming optimistically that I could still squeeze in 10 hours on trading alongside full time contracting, that'd take me 10 weeks instead of 2 or 3.

Going back to the original question though - to go out and take paid employment - apart from the time issue, what I think about starting up as a discretionary trader is that later the synergies with mechanical trading would be huge, plus the hours I work could be much more flexible than when working for someone else.

Anyway, we'll see, in a while.

By the way, Travis: HFT is high frequency trading. I noted some of your Crude trades were less than a minute apart, that's all. I was asking in the hope of hearing a bit about what you're trading there. I see you've written about it though.

 

[Yamato]

Yes, I see now. HFT then is not for me, because I wasn't picking the opportunities as I should have. Out of those 50 trades, I should have made probably only 3 and they would have been 66% winners. The day wasn't right. The timing wasn't right. And yet I even made some money. I think this might work, unless as usual I have 8 small wins and 2 huge losses that blow out my account. That is the objective of my 1-minute timeframe, which, if followed, should keep my losses from getting out of control. Even though it is true that in one occasion Friday the CL lost 2000 dollars in 2 minutes:



This would speak in favor of an absolute stoploss, in points. Even though I would have been warned by the candle before that huge fall.

All in all, I think the 1-minute method has enough rules to keep me from staying against the trend and have huge losses, and from entering against the trend, which are both problems of mine. At the same time, it doesn't have so many rules as to suffocate my good ideas. I just hope I'll stick to it long enough to make it work.

P.S.: I just changed it again, hopefully for the better.

 

[Adamus]

Re: TurningPoints Improvements Needed

This trade has clearly moved beyond the territory where the original entry signals have any meaning.

So either I put in a timed stop, or I just go with it because it's 50:50 now whether the trade's a winner or not and in time they'll all cancel each other out.

I suppose I could look at using a radical change in volatility to reset the indicators so the values from volatile periods don't carry over into non-volatile periods. Just an idea, sounds a bit flakey but there might be something there.

 

[Adamus]

Re: TurningPoints Improvements Needed

On the EUR/JPY, the volatility has disappeared out of the indicator.

I assume there'll be a reversal soon on USD/JPY from the system as well.

Of course it's going in against the short term trend, annoyingly. But the system has a better record than I do in this area.

 

[Adamus]

Re: another comparison

These charts demonstrate an issue with forex and currency trading that is becoming clearer to me now - it's essentially a camel market compared to the currency futures.

The IB live feed on the left is composed of data from a dozen banks but is sampled by IB or compressed or put through some sort of algorithm, for reasons unknown.

The chart on the right is Tenfore which is composed of data from thirty different banks. This is not filtered or compressed or sampled. There are even different symbols for each bank so I could choose which ever bank I wanted to chart data for.

But it's pretty obvious, the Tenfore composite signal is not something that is remotely like anything you could trade against. True there are a hell of a lot more ticks but they don't represent a single market, they represent 30 different markets. Since I don't have a broker to take my trades on those prices I guess I'll never know. Also there may well be time delays on some of the feeds causing the bars to overlap a lot more, e.g. at 15:20.

In fact, if I started looking at the individual symbols instead of the composite from Tenfore, I bet I could find arbitrage opportunities - if I knew it wasn't just caused by network delays.

I have unsubscribed from the Tenfore data, and I'm sticking with FXCM unless IB radically increase the download times for past data from their servers.

Just loading up some FXCM data for 2000 to 2008 so that I've got a second dataset after the DTC data. I have FXCM data from DTN / IQFeed, going back to 2008 or 2006 depending on symbol. This FXCM data is 1 mins bars that I downloaded from http://forexforums.dailyfx.com/free...967-free-strategy-trader-historical-data.html

Here's a screen shot of the FXCM 1 min bars with this new data above and my existing data from DTN / IQ Feed below.

Why it is different, I don't know. Hopefully the difference isn't enough to impact trading results in a big way.

The differences I notice are the highs which are rarely at the same bar. Plus the candles vary randomly and consistently in wick length and body length.

But it looks roughly the same so what the hell.

 

[Adamus]

Re: TurningPoints Improvements Needed

Got out too early.

Actually this steady rise is unprecedented for currencies. It looks like a stock.

 

[Adamus]

Re: TurningPoints Improvements Needed

Does this one actually count?

I have no time stops on this system. Although this one turned into a winner, logic dictates that it's pure 50:50 after the original turning point is superceded by another. In that time theoretically the system should be able to trade again with smaller targets for some profits.

 

[Adamus]

Brian: I'm not the Messiah! Will you please listen? I am not the Messiah, do you understand? Honestly!
Girl: Only the true Messiah denies His divinity.
Brian: What? Well, what sort of chance does that give me? All right! I am the Messiah!
Followers: He is! He is the Messiah!
Brian: Now, **** off!
[silence]
Arthur: How shall we **** off, O Lord?

Monty Python

 

[Adamus]

Re: TurningPoints Improvements Needed

Glutton for whipsaw punishment. I took 70 points of whipsaw this morning and it looks like I'm just going in for second helpings.

This looks like some kind of expanding mega-choppy flag.

Still, my system knows best.

Also of concern is that the target is only 35 pips away, in an area with no clear significance at all, while the stop is 85 pips away.

I think this is just rubbish - a clear oversight on my part in system building. On re-programming this system, I'm going to forgo any trades that don't let me get in with a decent risk:reward ratio according to the rules of the system. There's no point in taking this trade, from a system trading point of view.

In case you the reader are not familiar with NT7, the last pink triangle on the chart is my last entry and the position is still open.

 

[Adamus]

Re: TurningPoints Improvements Needed

Would have been good - not that the system knew that.

I exited early anyway because I went on holiday and was off-line.

I enabled drive-sharing in Win7 on this machine and it's turned it into a snail. I hope it turns back when I disable it.

 

[Adamus]

keeping a journal, being busy, getting ahead, pushing still

This post is way overdue, mainly thanks to my inability to prioritise and my blind optimism that I can do all the **** I think I have to do - still - despite learning the lesson over and over. Just to round up the stuff I've been doing, not that it's interesting, just for the record really, I'll note some stuff down here.

I got a laptop to replace my aging WinXP machine so I can have more RAM and run NinjaTrader 64-bit for doing big analyses of the whole basket of currencies over 10 years. It took Mesh Computers 30 days to deliver it which drove me crazy, but I've got it now. I'm putting all my stuff onto it which is currently spread across 3 machines - my email and browser from my linux machine, my Java development projects, and of course NT7 with the 22 gigs of tick data I managed to accumulate, plus I'm using it to RDP into my hosted server running my systems.

A hosted server is new too - I am moving my trading across from my desktop PC to a hosted server based in the US. The connectivity is a big step-up from my soho BT business broadband - only 9 hops in the traceroute compared to over 20 from my PC here @home. Typically the first thing I came across after setting up NinjaTrader to run all night was a foobar between Interactive Brokers and NinjaTrader again, at about 19:00 IB disconnected and then reconnected seconds later, but NinjaTrader missed the reconnect somehow and stayed disconnected for 5 hours until after midnight when for reasons beyond my understanding, it just decided to pick up the data feed again. So, more faff to contend with on the NinjaTrader support forum. Since then it's been alright but I can't run the systems live if NinjaTrader is going to do that overnight.

Following on from previous posts here where I've discussed whether I can keep my trading going in the long term without greater income from it, I decided the solution is to trade more - sounds logical and simultaneously I know I'm going to get the conservative readers out there thinking I'm taking risks beyond my abilities. That's as maybe but it's the most rational approach that I can agree with myself on.

Obviously I just threw that out there in a flippant way - it almost sounds like I'm talking about ramping up my leverage on the systems I'm currently trading. Although I do have to look in more depth at the leverage I'm using on my two live systems, I'm not going to be increasing their leverage for that reason.

What I mean by more trading is that I'm putting myself through training for discretionary trading. As is the way that I've learnt most things I know anything about, I'm teaching myself. I'm using the Al Brooks Price Action bar by bar book, and Lance Beggs / yourtradingcoach.com resources. I'm splitting my day between work on system trading - developing and trading mechanical systems - and working on price action trading, following the EUR/USD on a 5 min timeframe and learning how to trade that. My price action trading goal is to get profitable at that, with a higher degree of consistency and reliability than I've got from my mechanical trading. I'm not going to be documenting that here though, I'm keeping this journal focused on the mechanical trading.

As always I would like to hear from anyone reading this - I'm writing a journal partly to keep tabs on my own progress and to have something to go back over and review that I hope will help my trading in the future, but also partly because it's always great to interact with other people on the same path. There are a couple of us mechanical traders in London even, so there's nothing restricting it to ephemeral, half-real internet chat either.