My journey to long term consistency

[DrSafari]

I'm still testing the gap strategy but not logging it anymore in detail because I don't think it will be a good strategy. I am working on another one though but it requires a bit more study first on my part.

As for my TODO

TODO
1) Find out if real account strategy is profitable when not holding overnight.
2) Make a decision

1) I haven't looked into it yet.
2) I was looking at brokerages where I can run my current real account system. I withdrew most of my funds from plus500 because the spreads are just too high. It should be a CFD broker because of tax reasons and I should be able to access it from work since my real account system is for european market only. If it's not leveraged point 1 does not matter else I'd like to exit every position the end of day to reduce risks.

I found DEGIRO which has low transactions costs and lets you trade CFD's, just need to deal with some administration first to be able to trade CFD's. The disadadvantage is that the platform interface is more complicated and apparently has no feature to view charts, or I haven't found it yet. But I think I should give it a shot. I think even the CFD's there are non leveraged so I will probably wire double of my current account equity (10k) while still risking 100€ max per trade. I usually don't have more than 1 position open at the same time anyway so should be doable to trade at the same rate as before.

The rest of my money is still sitting in my bank account so I will use that to invest long term. (30k)

So that's my plan for now. Of course I will still be busy to try and find a profitable daytrading strategy. Meanwhile I will do my best to increase my capital by

-keep making profit with real account strategy (hopefully) and increase position size when statistics prove it is indeed profitable
-slowly make some money with longer term investments
-start working as a freelancer and earn at least 2 times more than now

All this will build up my capital and hopefully by the time I have found a tried and tested daytrading (or current real account) strategy, my capital will have reached the critical volume to be able to live off my trading.

So the new TODO is:

1) Find out if real account strategy is profitable when not holding overnight.
2) Deal with DEGIRO administration
3) Do the necessary to invest for long term

 

[options-george]

Hi Dr Safari.
Sorry to hear of the change in your circumstances. Wish you good luck in jumping through all those hoops!

O-G

 

[DrSafari]

Hi Dr Safari.
Sorry to hear of the change in your circumstances. Wish you good luck in jumping through all those hoops!

O-G

Thanks. I would have had to do it sooner or later though because I have been meaning to switch broker anyway.

 

[DrSafari]

Although I am not satisfied with my productivity lately I have not been sitting still either:



1) Find out if real account strategy is profitable when not holding overnight. --> DONE
2) Deal with DEGIRO administration --> DONE
3) Do the necessary to invest for long term

I have also made a more extensive TODO list on google drive as my thoughts as for what to do next were all over the place.

So the answer to nr 1 is unfortunately negative. Out of 20 trades (not overnight) 9 were winners and 11 were losers. The winning trades made a profit of 406,18 and the losing trades one of -618,72. So I will continue with my real account system with holding overnight when necessary but without leverage.

 

[DrSafari]

I have been studying up on support and resistance. I have no real trading plan yet but I am in the process of forming one. I took a couple of trades on my demo account already which turned out well (but could be luck of course). So far what I am looking for is support or resistance levels and price boucing off of them. So when price hits support or resistance and then reverses I take up a position in that direction. This resulted in two demo trades which I will now document. Oh yeah I am using the S&P500.


Short USA 500

Net P/L €‪4.78‬

Amount 1 Contracts

Opening Rate 2184.7
Close Rate 2179.3

Open Time 9/8/2016 1:47 PM
Close Time 9/8/2016 3:13 PM

Entry based on these S&R levels:


Price went through the 2186.07 resistance, but then reversed so I took a short below that level. The red line is a more longer term S&R line.

Here are the entry and exit positions on a 15 min chart:


Reason of closure: my adjusted stop loss got hit providing me with a profit of roughly 1R.

 

[DrSafari]

Short USA 500

Net P/L €‪36.62‬

Amount 1 Contracts

Opening Rate 2113.56
Close Rate 2154.7

Open Time 9/12/2016 3:06 PM
Close Time 9/12/2016 9:44 PM

Entry based on these S&R levels (daily chart up until few hours before time of entry)


Price went all the way down to 2112.44 which you can see was a monthly resistance level, than price kept at that base level suggesting it has become a support level then it started moving in the opposite direction, which triggers me to take an entry, resulting in the following trade.

Here are the entry and exit positions on a 15 min chart:


Reason of closure: end of day with a profit of roughly 3R.

 

[DrSafari]

Yesterday and today didn't really find any S&R levels that supports the base except for the very long term where resistance seems to have become support. I will keep watching it and go long when the action starts and put the stop slightly below the current support level.



Edit: however, since I am looking not to hold overnight I should not act on this cause the timeframe is too large, it's only good to notice as extra arguement if I was to take a trade based on shorter term S&R levels

 

[DrSafari]

The following are todays S&R levels. I could have gone long at the green dot according to the current version of the plan I am forming.

 

[DrSafari]

Short USA 500

Net P/L €‪1.53‬ (I think I am going to leave this one out and just use difference between open and close in points as I am always trading 1 contract despite SL size for now to keep things simple)

Amount 1 Contracts

Opening Rate 2124.82
Close Rate 2126.54

Open Time 9/14/2016 12:04 PM
Close Time 9/14/2016 1:38 PM

Stop loss: slightly below the support line

Entry based on these S&R levels of chart in previous post


At 11:00 price bounced off of support and then started to go up. My trigger to take an entry at the orange dot. However I was in a meeting and I was only able to go long at the green arrow. Not the ideal entry point but took it anyway. A little before 13:30 price hit resistance so I moved my stop loss very close to that level, after which it got stopped out not much after. And indeed price went down a lot again after it hit resistance.... just at the level I "predicted".

Here are the entry and exit positions on a 5 min chart:



Reason of closure: adjusted stop loss as price was reaching resistance and got stopped out after at 0.7 R (mostly due to the not ideal entrypoint)

 

[DrSafari]

Short USA 500

Net P/L €‪2.01‬‬

Amount 1 Contracts

Opening Rate 2120.56
Close Rate 2122.82

Open Time 9/14/2016 3:26 PM
Close Time 9/14/2016 3:37 PM

Stop loss: a bit below the latest low

Entry based on these S&R levels of chart in previous posts


Price went through support so I went long at the green arrow because price seemed to have bounced off support (more accurate broke through it but then retraced)

Here are the entry and exit positions on a 5 min chart, exit is at end of screen:

Did not draw S&R lines on this one.


Reason of closure: I adjusted stop loss because 1 R was reached and not THAT for off resistance anymore anyway. Profit of around 1.5 R (In the future I will measure this in points and I will log everything more accurately so I can actually calculate my results objectively. This is as soon I have formulated an objective trading plan but I think I have a crude version here.

 

[DrSafari]

Biggest opportunity of the day so far but I missed it:



Trigger to go long would have been at organge dot. Nice rally ensues. 4 profitable trades so far, 6 if you count the missed opportunities. What a hell of a difference with my previous demo attempts LOL, it's like day and night. I will not ring the victory bells yet cause this may all be just luck but I think I have a good basis now to make a trading plan and (back) test it. Hopefully the results will be satisfying and I can finally start day trading with real cash again (small amounts).

 

[DrSafari]

Preperation Day chart with lines for this day is:


There seems to be resistance @2117.20 but no real support at these price levels. I annotated trend lines just for fun (although it becomes more important later on)

Preperation for the week:

 

[DrSafari]

Next I kept tracking the trend over time:

@10 something


@12:52


@13:17


@14:05


Here I missed the opportunity to go short at the end of the chart. But the orange dot is in indication to go long (trend is up anyway so better to go long) assuming I can use the strategy I used on previous days also for days like this where there is a clear trend.

The thing that REALLY struck me was that at the orange dot price bounced off the 2117.20 level. That number looked familar and indeed it was the resistance line I drew on my preperation charts. I interpretated this as resistance being broken and that the trend would just continue as it had. At this time I was looking to enter long.

 

[DrSafari]

I did enter and that resulted in the following trade

Long USA 500

Net P/L +312 points

Amount 1 Contracts

Opening Rate 2118.56
Close Rate 2121.68

Open Time 9/15/2016 1:38 PM
Close Time 9/15/2016 2:30 PM

Stop loss: a bit below the 2117.20 level

Entry based on the charts posted in previous posts

Here are the entry and exit positions on a 5 min chart, exit is at red arrow

Did not draw S&R lines on this one.


Reason of closure: Adjusted stop loss got hit because of the spike down you see at the red arrow. Profits taken are 1.93 R

P.S.: I am not only logging my winning trades. I am pretty baffled I keep having winning trades. Loser will soon come probably. Anyway I probably need to backtest these findings ASAP.

 

[DrSafari]

Preperation for 16-09-2016
Chart of (very roughly) 24 hrs before now untill.. well now.

 

[DrSafari]

Long USA 500

Net P/L +502 points

Amount 1 Contracts

Opening Rate 2127.8
Close Rate 2132.82

Open Time 9/16/2016 1:05 PM
Close Time 9/16/2016 2:25 PM

Stop loss: a bit below 2126.44 level, the lowest low to the left of the green arrow.

Entry based on the chart posted in previous posts. Price had broken through 2132.44 support and then seemed to retrace so I entered long at the green arrow.

Here are the entry and exit positions on a 5 min chart, exit is at red arrow. I technically also could have taken a long at the orange dot but I was AFK.



Reason of closure: Adjusted stop loss got hit at 2.74 R

Comments
Yet another winner... when I reached 1R in profit I put my SL to breakeven and that almost got me stopped out but didn't. After that it went nowhere for a bit and I was more than happy to close the trade at break even but then it started rallying up resulting in a nice profit.

Oh yeah the highest high at the right end of the chart bounced off of my resistance level I defined in my preperation (2134.92) So that was a nice short opportunity I also missed...

 

[DrSafari]

Preperation 19-9-2016

 

[DrSafari]

Long USA 500

Net P/L +14points

Amount 1 Contracts

Opening Rate 2141.8
Close Rate 2141.94

Open Time 9/19/2016 1:27 PM
Close Time 9/19/2016 2:01 PM

Stop loss: a bit below 2140.20 level

Entry based on the chart posted in previous posts. Price had bounced off support so I went long. Entry point was a bit late considering that the range (between support and resistance) was pretty narrow and the spread is bad. That's why there is a profit but near break even.


Here are the entry and exit positions on a 5 min chart. I took a short at the orange dot, let's see how it turns out.




Reason of closure: Adjusted stop loss got hit at 0.1 R

Comments
Not ideal entry point, narrow range and wide spread causes this trade to be only marginally profitable.

 

[DrSafari]

Short USA 500

Net P/L -36 points

Amount 1 Contracts

Opening Rate 2144.94
Close Rate 2145.3

Open Time 9/19/2016 4:10 PM
Close Time 9/19/2016 4:17 PM

Stop loss: at the 2146.00 level initially

Entry based on the chart posted in the preparation posts.



Reason of closure: Adjusted stop loss got hit at -0.34 R

Comments
Price had broken through the 2143.00 resistance (I typed 2142.00 on perperation chart but that was a mistake, the actual line drawn is at 2143.00) but then started dropping so I took a short. Price moved my way fast so I adjusted my stop loss along with it. Sadly enough that got me stopped out at the red arrow. I was not even break even yet, obviously the trade would have worked if I had not adjusted my SL so fast. I got whipsawed out of this one. A rule for my trading plan could be to only move the SL when you are able to move it to break even. Even if you are unlucky to get stopped out like this at least it won't be with a loss.

Also, at the orange dot there was a trigger to go long again. Did not take it

First loss

 

[DrSafari]

Long USA 500

Net P/L -261 points

Amount 1 Contracts

Opening Rate 2136.93
Close Rate 2134.32

Open Time 9/19/2016 6:34 PM
Close Time 9/19/2016 6:58 PM

Stop loss: a bit below the lowest low to the left of green arrow

Entry based on the chart posted in the preparation posts.



Reason of closure: stop loss got hit at -1 R

Comments
First legitimate loser. Price broke through support but pretty fast and deep. This is just an idea but maybe when it break through like this it is not likely to reverse again anytime soon. I did notice that the level at where it seemed to bounce was the resistance level of last friday 16-9-2016 (2134.92) maybe that was indeed why price hesitated there, but that resistance turned support wasn't strong enough either and price further tumbled down.