ordinaryguy76
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Right, I've decided to "go for it" and start trading my mechanical system for S&P500 with real money.
To cut the long story short, the formulas are looking at open (previous day close), close, high and low over the previous three, four or five days and try to tell me whether I should buy or sell.
This was tested over the last 10 years of S&P data and the best formula (highest return compared to drawdown) was selected. Of course, historical profits can never guarantee future success. The biggest issue is if the stop loss (set in stone to 150 pips) gets triggered outside of S&P trading hours (currently 2.30pm - 9pm UK time), because my test data did not include out-of-hours movement.
Example:
Trade - Buy S&P @ 1260.0, SL 1245.0 (150 pips)
Order - Sell S&P @ 1244.0 (10 pips lower), SL 1259.0 (again 150 pips)
You can see results of 5 weeks' testing here:
http://www.trade2win.com/boards/tra...-semi-automated-s-p-daily-trading-system.html
What I like about this system is this:
1. it completely ignores fundamental analysis and 99% of technical analysis (it does not use any known indicators, but you can argue that my formulas are indicators on their own). You could say it's totally random
2. all trades are opened / closed at 9 pm, so you only need 0.5h per working day. You don't have to spend hours and hours in front of the screen and jump up at some news from EU or else. I am working full-time and have two wonderful little kids, so 0.5h daily is a lot of time for me.
3. you know that you can't lose more than 150 x stake per trade and 300 x stake per day. It's very easy to limit your risk to 1.5%, 3%, 6%, whichever you prefer. I will start initially with 3% risk per trade, but this will increase in 2 months' time, if I am successful.
4. 50% success rate is more than enough. Why ? Because you can only lose X amount of money on a losing trade whereas a winning trade can give you (a lot) more.
It's that 50% you're aiming for.
I am going to post live trades. If you have guts, you can follow them. I will try to make it easier for you and tell you IN ADVANCE how I will trade at 9 pm.
Oh my, what if it does not work ? Well.... I will come back to this forum with a different nickname perhaps ? hehehehe
To cut the long story short, the formulas are looking at open (previous day close), close, high and low over the previous three, four or five days and try to tell me whether I should buy or sell.
This was tested over the last 10 years of S&P data and the best formula (highest return compared to drawdown) was selected. Of course, historical profits can never guarantee future success. The biggest issue is if the stop loss (set in stone to 150 pips) gets triggered outside of S&P trading hours (currently 2.30pm - 9pm UK time), because my test data did not include out-of-hours movement.
Example:
Trade - Buy S&P @ 1260.0, SL 1245.0 (150 pips)
Order - Sell S&P @ 1244.0 (10 pips lower), SL 1259.0 (again 150 pips)
You can see results of 5 weeks' testing here:
http://www.trade2win.com/boards/tra...-semi-automated-s-p-daily-trading-system.html
What I like about this system is this:
1. it completely ignores fundamental analysis and 99% of technical analysis (it does not use any known indicators, but you can argue that my formulas are indicators on their own). You could say it's totally random
2. all trades are opened / closed at 9 pm, so you only need 0.5h per working day. You don't have to spend hours and hours in front of the screen and jump up at some news from EU or else. I am working full-time and have two wonderful little kids, so 0.5h daily is a lot of time for me.
3. you know that you can't lose more than 150 x stake per trade and 300 x stake per day. It's very easy to limit your risk to 1.5%, 3%, 6%, whichever you prefer. I will start initially with 3% risk per trade, but this will increase in 2 months' time, if I am successful.
4. 50% success rate is more than enough. Why ? Because you can only lose X amount of money on a losing trade whereas a winning trade can give you (a lot) more.
It's that 50% you're aiming for.
I am going to post live trades. If you have guts, you can follow them. I will try to make it easier for you and tell you IN ADVANCE how I will trade at 9 pm.
Oh my, what if it does not work ? Well.... I will come back to this forum with a different nickname perhaps ? hehehehe
