My journey to long term consistency

[DrSafari]

Demo account
Still trading, have the feeling I had some bad luck, I lost more than I won but its too early to draw any conclusions. Still havent gotten around to posting my demo trades but I have the info ready.

Real account

Short Inm
250 Shares
Reason of closure: Profit was 2 times my amount risked (initial stop loss) so I tightened the stop loss and it got hit.
Opening rate: 987.27
Opening time:2/8/2016 1:07:49 PM

Close rate: 959.48
Close time: 2/9/2016 10:05:24 AM
Amount risked: € 62
Net P/L: +€90.01

Chart
Green is where I opened position and end of screen is where it got closed. Chart is an hourly chart.




Current equity: €4,821.66

 

[DrSafari]

Real account

Short TTT
1000 Shares
Reason of closure: Did not want to hold overnight cause I noticed that the current general market goes either up or down on alternating days (more down then up though) Tomorrow could very well be an ''up" day and trigger my stop loss so I decided to reel in the profits. If tomorrow turns out to be a "down" day I will probably re enter this trade going short.

Opening rate: 196.62
Opening time:2/11/2016 9:17:54 AM

Close rate: 193.33
Close time: 2/11/2016 4:18:42 PM

Amount risked: € 98.54 initially but quickly adjusted to ~€70 cause it was more sensible based on the volatility
Net P/L: +€42.01

Chart
Green arrow is where I opened position and end of screen is where it got closed. Chart is a 15 min chart.


Current equity: €4,863.67

 

[DrSafari]

And indeed today is an "up" day and the TTT stock I got rid of yesterday even gapped up. I did good to reel in my modest profits.

 

[DrSafari]

Real account

Long Pers
250 Shares
Reason of closure: Adjusted stop loss got hit resulting in a very small profit.

Opening rate: 2,045.00
Opening time:2/19/2016 9:11:25 AM

Close rate: 2,048.00
Close time: 2/19/2016 11:50:05 AM


Amount risked: ~€70 , moved stop loss along with the rising price and was set on +€10 and then got hit.
Net P/L: +€9.66

Chart
Green arrow is where I opened position and red arrow is where it got closed. Chart is a 5 min chart.


Personal notes
At some point this trade was +60 in profit. After which I set my stop loss near break even. A bit later I realised this was probably a bit too wide considering the volatility of the stock so I put it to +10 .... still I probably should have put it +20 to be good. +30 would have been too narrow and would risk me being taken out by market noise.

All in all not a bad trade, but not perfect either.

Current equity: €4,873.34

Demo account
Still trading, I will (finally) post them this evening cause I will have some free time then.

 

[DrSafari]

Real account

Long King
1000 Shares
Reason of closure: Stop loss got hit after gap down

Opening rate: 343.50
Opening time:2/22/2016 2:01:36 PM

Close rate: 337.65
Close time: 2/22/2016 3:05:20 PM

Amount risked: €65.19
Net P/L: €-74.81

Chart
Green arrow is where I opened position and red arrow is where it got closed. Chart is a 15 min chart.


Personal notes
One of my rules is that I shouldnt take a position in the direction of a recent gap. This one is a bit tricky though because the gap up happened at the beginning of the day and already stabilized a bit (or atleast I thought) by going down, then started going up again around 2pm. But not for long as you can see. I should stay away from gappy stocks. I think because of my recent winning streak I was probably a bit being less strict on which trades to take (greed) so thats something to remember. However, in the past I would be even less strict so I am definitely improving in that regard.

Demo account
Did not live up to my promise to finally post some charts My excuse was that I was too tired after work, which I was but shoulnt be an excuse

 

[DrSafari]

Demo account

Ok time to take this thing serious. So far it hasnt been going well on my demo account. Maybe because it's only demo im not strict enough or the plan just doesnt work due to american stocks behaving different than european or the analysis of the European Economic Sentiment Indicators IS really important... No matter what the reason, I need to come up with a new plan and it needs to be better defined. I analysed my previous results and based on that I came up with a new trading plan

1) Deciding whether to trade or not
-before deciding to trade look if any major economic events are up in the current trading day if yes then we DO NOT TRADE
-before deciding to trade: check yahoo finances whether something big is up or not. If it is DO NOT TRADE


2) Find potential trades
- scan american stocks and look for clean charts (up or down). Clean is a steady rise or decline(1) for at least 5 trading days on a 2 hour chart
- do not include stocks that gapped in those 5 trading days
- do not include stocks that require me to take stop losses wider than 4% of my equity (see next point)
-do not include stocks that are going against the trendline at that moment, the last three bars should go with the trendline


3) Taking positions
- make sure my portfolio has an equal amount of longs and shorts at all times (3)
- look for the trend and the highest difference in opposite direction of how you took the trade and put that as stop loss
- for testing purposes I am not going to risk more than 4 % on each trade (2)

4) Once in a position
- Make it a trailing stop loss
- Exit only if stop loss hits
- document every trade carefully in journal (with charts) saying what you did and what I should have done

After 40 trades evaluate


(1) how can I quantify this? I was thinking something like ATR but those values differ each time. Need more investigation for this but for now no big difference from the trend line is enough, I take into account the volatitliy in my stop loss anyway and I dont take the trade if it would make my stop loss to wide)

(2) is normally 2% but because of leverage I dont have enough money in demo account currently to be able to take most trades)

(3) to profit from bad events and to take away risk

 

[DrSafari]

Things I just thought of trying to execute my new plan:


-Have same total risk on both long side and short? (so adjust position size accordingly)

- Always look for a stock against the current economy first (cause that is hardest to find), S&P500 is a good indicator for that. Then find a suitable one going with the trend. Because I need equal amount of long and short

 

[DrSafari]

Demo account
Okay here goes, first of my 4 open trades got closed it was a loser. About two of them are still breakevenish and 1 is winning good.

Long DrPepper
100 Shares
Reason of closure: Stop loss got hit

Opening rate: 93.02
Opening time:2/25/2016 4:25:57 PM

Close rate: 91.66
Close time: 2/26/2016 7:24:12 PM

Amount risked: €123.18
Net P/L: €-126.89

Chart
Green arrow is where I opened position and red arrow is where it got closed. Chart is a 1 hour chart.




Personal notes
Followed my system but I am starting to think I put my stop losses too wide. Once a trade goes against me it usually doesnt change anymore from the moment a certain percentage of my stop loss has been hit. I a; thinking I should place my stop loss at 66% of my current one. 50% would be too narrow I believe.

 

[DrSafari]

Plan including my new findings:

1) Deciding whether to trade or not
-before deciding to trade look if any major economic events are up in the current trading day if yes then we DO NOT TRADE
-before deciding to trade: check yahoo finances whether something big is up or not. If it is DO NOT TRADE


2) Find potential trades
- scan american stocks and look for clean charts (up or down). Clean is a steady rise or decline(1) for at least 5 trading days on a 2 hour chart
- do not include stocks that gapped in those 5 trading days
- do not include stocks that require me to take stop losses wider than 4% of my equity (see next point)
-do not include stocks that are going against the trendline at that moment, the last three bars should go with the trendline


3) Taking positions
- make sure my portfolio has an equal amount of longs and shorts at all times (3)
- look for the trend and 66% of the highest difference in opposite direction is where I place my stop loss
- for testing purposes I am not going to risk more than 4 % on each trade (2)
-Have same total risk on both long side and short (so adjust position size accordingly)
- Always look for a stock against the current economy first (cause that is hardest to find), S&P500 is a good indicator for that. Then find a suitable one going with the trend. Because I need equal amount of long and short

4) Once in a position
- Make it a trailing stop loss
- Exit only if stop loss hits
- document every trade carefully in journal (with charts) saying what you did and what I should have done

Since the system changed again after 40 trades I will evaluate


(1) how can I quantify this? I looked into this but cant find anything suitable at the moment. For now Ill leave this at my discretion but of course it is visible if a chart goes up or down in a steady fashion, the more it resembles a straight line the better, only need to measure that objectively and put a number on it
(2) is normally 2% but because of leverage I dont have enough money in demo account currently to be able to take most trades) --> since my stop loss is tighter maybe this doesnt count anymore. Still 4% makes it easier to adjust my positions so that I have equal risk on long and short side.
(3) to profit from bad events and to take away risk

 

[DrSafari]

Demo account
Another loser

Short ICICI Bank
750 Shares
Reason of closure: Stop loss got gapped over

Opening rate: 5.18
Opening time:2/25/2016 7:38:56 PM

Close rate: 5.52
Close time: 2/29/2016 3:40:40 PM

Amount risked: €184.70 (adjusted to 120 according to my new rule concerning stop losses)

Net P/L: €-234.33

Chart
Green arrow is where I opened position and red arrow is where it got closed. Chart is a 1 hour chart.




Personal notes:
This trade was against my rules on closer inspection. I should not trade gappy stocks and this one is gappy. I didnt notice cause I was looking at 2 hour charts, so another rule is to also look at the shorter time frame charts to be able to notice gaps better. Stupid mistake but there is a reason this is demo account.

 

[DrSafari]

Demo account
Yet another loser

Short Gaming and Leisure
750 Shares
Reason of closure: Stop loss got gapped over

Opening rate: 25.23
Opening time:2/25/2016 4:35:57 PM

Close rate: 25.82
Close time: 2/29/2016 3:35:42 PM

Amount risked: €189.32 (adjusted to around 120 according to my new rule concerning stop losses)

Net P/L: €-135.58

Chart
Green arrow is where I opened position and red arrow is where it got closed. Chart is a 1 hour chart. I added trend lines just for fun.



Personal notes
You could argue this is a good trade according to the system. It has a high volatility and isnt what I normally consider a clean chart, however the trend was really obvious on the chart so I took it anyway (especially since shorts were harder to find) This is exactly why I need to quantify what constitutes as a clean chart for me.

 

[hhiusa]

Demo account
Yet another loser

Short Gaming and Leisure
750 Shares
Reason of closure: Stop loss got gapped over

Opening rate: 25.23
Opening time:2/25/2016 4:35:57 PM

Close rate: 25.82
Close time: 2/29/2016 3:35:42 PM

Amount risked: €189.32 (adjusted to around 120 according to my new rule concerning stop losses)

Net P/L: €-135.58

Chart
Green arrow is where I opened position and red arrow is where it got closed. Chart is a 1 hour chart. I added trend lines just for fun.

View attachment 219662

Personal notes
You could argue this is a good trade according to the system. It has a high volatility and isnt what I normally consider a clean chart, however the trend was really obvious on the chart so I took it anyway (especially since shorts were harder to find) This is exactly why I need to quantify what constitutes as a clean chart for me.

I finally found a journal where somebody actually explains their graphs. I like how you actually post the exact time of entry along with entry price and share size.

A real diamond in the rough. :clap:

Even though it is a demo account, it is better than many journals that claim to have live trading.

 

[DrSafari]

I finally found a journal where somebody actually explains their graphs. I like how you actually post the exact time of entry along with entry price and share size.

A real diamond in the rough. :clap:

Even though it is a demo account, it is better than many journals that claim to have live trading.

Thx hhiusa! I also post charts of my real account up here but my current system doesnt allow me to take many trades so thats why I am developing another one.

 

[DrSafari]

Okay I just spent the last 1 hour and a half looking for a suitable short for my system. I went through most of the USA stocks available in my broker and didn't find any. If I lowered my criteria to a trend having developed the last 3 days instead of 5 then 4 stocks came out. However, none of them has the last three bars red. I will probably have to change some of my criteria. I have one open position right now and cant take on any new ones. I will abide by my current system until I have made another post with my adapted plan starting from 0 again and evaluating for 40 trades. This in order to remain the discipline to follow the system unless I have officially changed it.

 

[DrSafari]

Demo account
A winner

Long Intuitive Surgical
20 Shares
Reason of closure: Tightened stop loss got hit in profit zone

Opening rate: 556.55
Opening time:2/25/2016 7:47:58 PM

Close rate: 567.52
Close time: 3/1/2016 6:14:40 PM

Amount risked: €225.28 readjusted to around 150 first time and readjusted to around 100 second time when I was in a good profit zone

Net P/L: €187.64

Chart
Green arrow is where I opened position and red arrow is where it got closed. Chart is a 30 min chart.


Personal notes
I did good except for one thing and I just realised it now writing this journal entry. Again this shows the importance of keeping a journal. Nowhere in my plan do I ever mention to tighten my stop loss after I have good profits. This is something I do on my real account but is not part of this trading plan.

 

[DrSafari]

Plan including my new findings:

1) Deciding whether to trade or not
-before deciding to trade look if any major economic events are up in the current trading day if yes then we DO NOT TRADE
-before deciding to trade: check yahoo finances whether something big is up or not. If it is DO NOT TRADE


2) Find potential trades
- scan american stocks and look for clean charts (up or down). Clean is a steady rise or decline(1) for at least 3 trading days on a 2 hour chart
- Always look for a stock against the current economy first (cause that is hardest to find), S&P500 is a good indicator for that. Then find a suitable one going with the trend. Because I need equal amount of long and short
- do not include stocks that gapped in those 3 trading days
- do not include stocks that require me to take stop losses wider than 4% of my equity (see next point)
-do not include stocks that are going against the trendline at that moment, the last three bars should go with the trendline


3) Taking positions
- make sure my portfolio has an equal amount of longs and shorts at all times (3)
- look for the trend and 66% of the highest difference in opposite direction is where I place my stop loss
- for testing purposes I am not going to risk more than 4 % on each trade (2)
-Have same total risk on both long side and short (so adjust position size accordingly)


4) Once in a position
- Make it a trailing stop loss
- Exit only if stop loss hits
- document every trade carefully in journal (with charts) saying what you did and what I should have done

Since the system changed again I will evaluate after 40 trades


(1) how can I quantify this? I looked into this but cant find anything suitable at the moment. For now Ill leave this at my discretion but of course it is visible if a chart goes up or down in a steady fashion, the more it resembles a straight line the better, only need to measure that objectively and put a number on it
(2) is normally 2% but because of leverage I dont have enough money in demo account currently to be able to take most trades) --> since my stop loss is tighter maybe this doesnt count anymore. Still 4% makes it easier to adjust my positions so that I have equal risk on long and short side.
(3) to profit from bad events and to take away risk

 

[DrSafari]

Demo account


Short Campbell Soup
200 Shares
Reason of closure: stop loss got hit

Opening rate: 60.30
Opening time:3/2/2016 5:06:36 PM

Close rate: 60.97
Close time: 3/2/2016 7:12:52 PM

Amount risked: around €120

Net P/L: €-123.43

Chart
Green arrow is where I opened position and red arrow is where it got closed. Chart is a 15 min chart.


Personal notes
I did everything I needed to do according to the system. Simply started going against me the moment I opened it. Making my stop loss tighter (66%) already pays off because I'm losing less money on my losers. I am starting to doubt the strategy to go Short and Long at all times though. For now I will hold on to it and see how it will turn out and IF its feasable to find at least one trade (so two actually) every day that matches my criteriae. Come to think of it, I should also incorporate some financial plan into my strategy. If I want to trade for a living I need to make profit but I also need to make ENOUGH profit. I have a lot of money I can invest but it is not limitless obviously so would be a shame to develop a consistently profitable system that does not make me enough profit (although through compouding it I would probably reach that sum sooner or later). Still I should do the exercise.

 

[DrSafari]

Demo account


Long Wadell
200 Shares
Reason of closure: trailing stop loss got hit in the profit zone

Opening rate: 24.97
Opening time:3/2/2016 6:44:28 PM

Close rate: 25.47
Close time: 3/3/2016 8:11:34 PM

Amount risked: around €120

Net P/L: €91.23

Chart
Green arrow is where I opened position and red arrow is where it got closed. Chart is a 15 min chart.


Personal notes
Did what I had to do according to the system. Still I could have had 120 more profits if I had sold sooner. The current system is to not tighten the stop loss once you have more than your amount risked of profit so that is what I did. In my real account I always tighten it, but now I want to test if its a better idea to let my profits run more... it did not help as the stop loss got hit anyway. Im starting to think that it is a good idea to tighten it once you have a certain amount of profit. Either the trend is broken OR the stop loss gets hit anyway even if it goes back up afterwards. At least that is my experience. Still, for now Im going to keep abiding with the current system.

Oh I also did some calculations, I want to make on average a profit of 2000 per month. 1000 to live off and 1000 to keep in my account. Seems that it is very feasable* considering a minimum amount of 12 trades per month with a capital of 30k .

Also I seem to be learning at a much much faster pace now that I am taking this journaling and my system very serious. Good stuff.

(*) In the assumption I have a consistently profitable system that is.

 

[DrSafari]

Demo account


Short Coty
500 Shares
Reason of closure: trailing stop loss got hit in the profit zone

Opening rate: 27.8
Opening time:3/4/2016 4:20 PM

Close rate: 27.74
Close time: 3/4/2016 7:23 PM

Amount risked: around €176.74

Net P/L: €‪27.27‬

Chart
Green arrow is where I opened position and red arrow is where it got closed. Chart is a 15 min chart.


Personal notes
Did what I had to do according to the system, nothing more to add.

 

[DrSafari]

Demo account


Long CoconutPhillips
350 Shares
Reason of closure: trailing stop loss got hit in the profit zone

Opening rate: 39.54
Opening time:3/4/2016 4:25 PM

Close rate: 41.38
Close time: 3/7/2016 4:01 PM

Amount risked: initially €165.08

Net P/L: €‪584.87‬

Chart
Green arrow is where I opened position and red arrow is where it got closed. Chart is a 15 min chart.



Personal notes
Made a nice profit considering i only risked 165 and made 584. This is the advantage of going into positions where the chart goes up steadily. I can put my stop loss pretty narrow which allows me to take larger positions which results in nice profits if the trade works. These wins make it worth to put a narrower stop loss. Good example of letting your profits run... on the other hand, you can see it gapping down afterwards so at some point you have to real in your profits as well. The gapping usually happens at the start of the trading day, so I am still reluctant to keep posititions open overnight. Of course the current system does not talk about that so I keep it open until stop loss gets hit for now.