My journey to long term consistency

Demo account


Short Microsoft
350 Shares
Reason of closure: stop loss got hit
Opening rate: 50.72
Opening time:3/7/2016 9:11 PM

Close rate: 51.19
Close time: 3/8/2016 3:47 PM

Amount risked: €146,18

Net P/L: €‪-150.04‬

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


Personal notes
Did what I had to do according to system. Trade went against me as soon as I opened. Nothing more to add really.
 
Real account


Short St M
1000 Shares
Reason of closure: trailing stop loss got hit
Opening rate: 292.02
Opening time: 3/8/2016 12:11 PM

Close rate: 295.39
Close time: 3/9/2016 2:20 PM

Amount risked: €60 initially but readjusted to 40 later due to trailing SL

Net P/L: €‪-43.91‬

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


Personal notes
This could be a trade of too tight of a stop loss, then again, how much longer will I hold it before it starts moving into the desired direction? And wider stop loss would have meant I risked too money cause the minimum position size was too much for my equity.
 
Real account


Long Tes
1000 Shares

Reason of closure: Had a profit equal to amount risked and price was not moving for some time already so decided to exit the position not having any overnight risk.

Opening rate: 191.55
Opening time: 3/8/2016 9:29 AM

Close rate: 196.2
Close time: 3/9/2016 3:25 PM

Amount risked: ~€60

Net P/L: €‪60.06‬

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


Personal notes
Decided to exit because it was not moving anymore and didnt want to hold it overnight anymore to reduce risk. I may re-enter this trade if it starts moving again.

Current equity: €4 814.67
 
Demo account


Short wheaterford

600 Shares
Reason of closure: adjusted stop loss got hit
Opening rate: 5.84
Opening time:3/9/2016 4:06 PM

Close rate: 6.18
Close time: 3/9/2016 4:38 PM

Amount risked: around €‪185

Net P/L: €‪-185.34‬

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


Personal notes
Did what I had to do according to system. Went against me as soon as I entered the position. I was a bit late to post this one but as you can see it went even further up so SL's are a good thing!
 
Demo account


Long Enbridge
250 Shares
Reason of closure: adjusted stop loss got hit

Opening rate: 37.64
Opening time:3/7/2016 9:15 PM

Close rate: 37.8
Close time: 3/10/2016 5:27 PM

Amount risked: around €‪140.74

Net P/L: €‪33.60‬

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


Personal notes
And this is the disadvantage of not tightening your stop after you have made more than your stop loss of profit. This one went down again and negated most of my profit. This could easily have been +150 profit
 
I just went over the trades I have done with the system Im currently testing, Some observations

- The shorts were all losers apart from one minor winner
- I have missed out on good profits twice because of not tightening the stop loss after being positive the amount being risked
- Because of that same reason I also made one huge profit.. it would be less without that rule but not as much as I missed out on the other winners in previous point.

These things are things I can potentially change but for now Im going to do some more trades to gather more data.
 
Demo account


Short Pandora
550 Shares
Reason of closure: stop loss got hit
Opening rate: 9.54
Opening time:3/11/2016 4:09 PM

Close rate: 9.86
Close time: 3/11/2016 5:11 PM

Amount risked: around € 157

Net P/L: €‪-157.71‬

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



Personal notes
Went against me as soon as I opened, again. And again a failed short.
 
Demo account
I shorted another 600 shares of Pandora because I risked more with my long position. Both Pandora positions and my Nordstrom position risked an equal amount that way. Of course this means it also hit that stop loss, not going to post the chart for that reason but just the basic info.

Short Pandora
600 Shares
Reason of closure: stop loss got hit

Amount risked: around around € 150

Net P/L: €‪-150.54‬


Personal notes
Another failing short. Im pretty close to abandoning this current system and start testing with a tweaked version.
 
Demo account

Long Nordstrom
250 Shares
Reason of closure: stop loss got hit
Opening rate: 57.58
Opening time: 3/11/2016 4:07 PM

Close rate: 56.26
Close time: 3/11/2016 6:59 PM

Amount risked: around € €‪295

Net P/L: €‪-295.73‬

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


Personal notes
Again, went against me as soon as I took the position. Im sounding like a broken record. Either its a streak of bad luck or Im doing something "wrong" that I dont yet realise.
 
Real account

Long Tele
200 Shares
Reason of closure: stop loss got hit
Opening rate: 48.1
Opening time: 3/15/2016 10:27 AM

Close rate: 47.66
Close time: 3/15/2016 11:28 AM

Amount risked: around € €‪88

Net P/L: €‪-88.00‬

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

Current equity: €4 726.67



Personal notes
The broken record continues, AGAIN it went against me as soon as I opened, this time on my real account. I dont think its a bad trade, it matched my criteria. This system is more discretionary than what Im trying to cook up on my demo account though. The only thing that bothers me is that I first decided not to take the trade cause it started the day in the negative AND most but not all stocks in my watchlist were starting there too. Later, around the time I opened my position, the stock was positive and more stocks in my watchlist became positive as well (for the day so far) . Still the thought crossed my mind that having taken a trade when I first doubted it never turned out good so far. Not sure if that is true but that was the feeling....but feelings can trick you I am well aware of that. A way to track this is to write down my thought process before I take the trade as well, so at least I can track this stuff.

Another thing I could do is make my real account system more mechanical and less discretionary. Then again, I still am making profit since september when I started trading properly. So why change a system that still seems to be working? Although I guess I am not 100% confident in it yet, else I would commit more money to it.

Another observation is again that once a trade is going against you, it will continue to go against you. Rarely have I ever seen that it goes near my stop loss and then recovers to make a profit. It goes straight through it and well beyond it in most cases. Reason the more to make them tighter. That will result in being taken out more often AND afterwards to go in the right direction which can and will be super frustrating. Thats why stop losses should always be set in stone (in my opinion). But my losers will lose much less. I came to the same conclusion in my demo account after all. I will first analyse some of the charts I posted here of the losers and winners of my real account before deciding to narrow down my stop loss.

One last thing, the last couple of trades were all going against me as soon as I opened which looks like the market or my broker is out to get me, luckily it wasnt all on my real account. I guess this is something every trader goes through sooner or later and starts to doubt his system. This happened to me on two different systems albeit similar ones. But I think its more a streak of bad luck. I also play poker and in many ways playing poker is the same as trading, good players can make consistent profit in the long run, over many many games by abiding to their system and play the cards they're handed the best way possible. Risk/reward management is also super important in poker. Anyways, sometimes you have evenings that EVERY time you have a good hand, someone else has a slightly better one causing you to lose a lot of chips. Up to the point you start thinking they are cheating (broker analogy) or the deck is stacked against you (market is out to get you analogy). This is exactely the same feeling with trading, but since I know it also exists in poker and they are somewhat similar I am going to assume this is bad luck and I am going to assume the statistics will balance it out in the long run. Sometimes in poker you also get lucky, that can happen here too. There will be times you will win big with trading too. Anyway, enough ranting. Action points so far:

An action point I have already for my real account is to write down my thought process before I take a trade as well.
 
Okay, going over my trades has only made my feeling stronger. The shorts are not working so I am going to abandon my rule that I need to have an equal risk going long and short. The reason I believe most it is not working is because general economy is bullish and finding stocks that have a bearish trend is more difficult to find. That makes me take up positions that are not ideal, not so clean charts. Taking long and short can be useful at times when the market is in recovery mode (like in januari, eary feb and after august 24 last year) Then again, its even harder to find shorts in those markets. So best is not to trade then (or do it when you have determined the up and down days but that is beyond the scope of this system so far) Lets say we wont trade markets like that for now.


Plan Demo Account 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
- Look at the S&P500 and the stocks in your watchlist. Watch if most of them are in the plus or in the min. Dont go long if in the min and dont go short if in the plus.
- scan american stocks and look for clean charts (up or down determinded in previous point). Clean is a steady rise or decline for at least 3 trading days on a 2 hour chart (1)
- do not include stocks that gapped in those 3 trading days
- do not include stocks that require me to take stop losses wider than 2% of my equity
- the last three bars (2h) should go with the trendline, else dont take it


3) Taking positions
- look for the trend and 66% of the highest difference in opposite direction is where I place my stop loss
- I am not going to risk more than 2 % on each trade



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 (or sooner if it seems totally worthless like I did many times already)


(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
 
Demo account

Short Athenahealth
50 Shares
Reason of closure: adjusted stop loss got hit

Opening rate: 132.97
Opening time: 3/15/2016 3:52 PM

Close rate: 133.49
Close time: 3/16/2016 3:07 PM

Amount risked: € 96.96

Net P/L: €‪-23.49‬

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



Personal notes
Didn't go against me and was 75ish into profit initially. Adjusted stop loss to -20ish according to my system. Then next day it went through it. If it was my real account I would probably have moved my stop loss to +50 because looking at the general trends I thought it would be going up, and so it did. Later it went down again so a wider stop loss or tightening it into profit would have been better here. However I abided by the system so all is good.
 
I made a bad trade on my demo account (which I will post soon). In my plan it says "look for the trend and 66% of the highest difference in opposite direction is where I place my stop loss"

However highest difference over which time period? This is not defined. This is why I made a mistake. It also says that the trend should be there for at least 3 trading days. But that does not mean I should take highest difference over the last 3 trading days. I should take highest difference over the entire trend. Alas I did the former resulting in taking a too large position with far too narrow stop loss and got stopped out in no time. At first I was baffled and couldnt see my mistake, after all I was just following my system or so I thought. But then I thought to investigate it further cause it felt wrong somehow.. and now I discovered why. I took on the same trade now but with corrected position size and stop loss. Will update the plan accordingly.

Will post details later
 
Demo account

Long BMO
500 Shares
Reason of closure: stop loss got hit

Opening rate: 61.24
Opening time: 3/17/2016 4:11 PM

Close rate: 60.88
Close time: 3/17/2016 5:41 PM

Amount risked: around €155

Net P/L: €‪-158.88‬

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



Personal notes
Like I said in previous post, stop loss was way too narrow because I only took into consideration the last three trading days instead of the whole trend. Next trade I am posting is the same instrument, this time done correctly, unfortunately also a loser but i did follow the system
 
Demo account

Long BMO
150 Shares
Reason of closure: stop loss got hit

Opening rate: 60.99
Opening time: 3/18/2016 2:49 PM

Close rate: 60.06
Close time: 3/21/2016 3:00 PM

Amount risked: around €125

Net P/L: €‪-125.99‬

Chart
Green arrow is where I opened position and red arrow is where it got closed. Chart is a 1 hour chart this time. So the longer trend is also visible and my previous very bad stop loss
BMOChart.jpg



Personal notes
This time a more sensible stop loss... Notice the amount risked is not that different but the amount of shares is only 150 instead of 500. But of course it started going against me as soon as I opened. This is starting to get rediculous. Maybe this is a sign I shouldn't be trading on my real account for the time being...
 
Demo account

Long Philipps 66
150 Shares
Reason of closure: stop loss got hit

Opening rate: 90.7
Opening time: 3/22/2016 4:01 PM

Close rate: 89.54
Close time: 3/23/2016 2:31 PM

Amount risked: around €125

Net P/L: ‪€‪-156.57‬

Chart
Green arrow is where I opened position and red arrow is where it got closed. Chart is a 15 min chart.
philips66Chart.jpg



Personal notes
Another loser, I wonder what the statistical probability of this is, close to zero I bet. If I had done the exact opposite each time I would have a great track record haha. Anyway, up until just now, when typing this text I had no idea what I could be doing wrong but now something hit me. I am always opening at beginning of the US trading day. Because thats near the end of when I get off from work here. Anyway I have read and also experienced that the beginning of a trading day is a bad time to go into a position, you dont have a good feel of the market yet, alot of newby traders take their positions etc. On my real account I also usually waited at least 1 hour before taking a trade. So Im going to make my system that I should wait at least one hour after opening to take a new trade. Going on with this losing streak makes no sense. Will post an update of the new system
 
Plan Demo Account 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
- Wait at LEAST 1 hour after trading has opened before taking up a position
- Look at the S&P500 and the stocks in your watchlist. Watch if most of them are in the plus or in the min. Dont go long if in the min and dont go short if in the plus.
- scan american stocks and look for clean charts (up or down determinded in previous point). Clean is a steady rise or decline for at least 3 trading days on a 2 hour chart (1)
- do not include stocks that gapped in those 3 trading days
- do not include stocks that require me to take stop losses wider than 2% of my equity
- the last three bars (2h) should go with the trendline, else dont take it



3) Taking positions
- look for the trend and 66% of the highest difference in opposite direction of the entire trend is where I place my stop loss
- I am not going to risk more than 2 % on each trade



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 (or sooner if it seems totally worthless like I did many times already)


(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
 
Demo account

Short Hersha Hospitality Trust
840 Shares
Reason of closure: adjusted stop loss got hit in the profit zone

Opening rate: 20.8
Opening time: 3/23/2016 4:40 PM

Close rate: 20.4
Close time: 3/24/2016 3:38 PM

Amount risked: around €180 initially later €300 (trailing)

Net P/L: €‪300.00‬

Chart
Green arrow is where I opened position and red arrow is where it got closed. Orange line is price level where it got closed. Chart is a 15 min chart.
HeshaTrustChart.jpg




Personal notes
The curse is broken :p One thing to note is that after a gap (up or down) into your direction its best to close your position, after a gap it usually stabilizes so best to reel in any profits. If the trend seems to continue you can always enter again later (3 days later according to the current system)
 
Demo account

Short Ross Stores
360 Shares
Reason of closure: stop loss got hit

Opening rate: 57.36
Opening time: 3/24/2016 7:24 PM

Close rate: 57.88
Close time: 3/28/2016 3:47 PM

Amount risked: around € 172

Net P/L: €‪-172.11‬

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




Personal notes
Got unlucky that it gapped up the next trading day. **** happens.
 
Demo account

Short Williams Partners
150 Shares
Reason of closure: stop loss got hit (stop loss is lower than usual in this case because it seems I made a trivial calculation error. I noticed on the chart that my stop loss was way to wide so I narrowed it to correct levels according to system with the result that I risked less money of course.

Opening rate: 17.41
Opening time: 3/29/2016 4:16 PM

Close rate: 18.22
Close time: 3/29/2016 5:39 PM

Amount risked: around € 108

Net P/L: €‪-108.51‬

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




Personal notes
If I did this trade with my real account I would bang my head against the wall. I entered this position around 15 minutes after the USA consumer confidence indicator was published. This number was better than expected which caused my stock to rally (at least that is my intrepretation) . However this wasnt really visible yet after just 15 minutes. Had I waited another hour it would be visible. At first I wanted to do that BUT... nowhere did I define it in my system. So the trade is good (according to the system) but exposed another weakness in the system. Best is to wait at least 1 hour to enter a position after one of the important indicators is published. And obviously only take the trade if the trend doesnt change. That is a rule I will add on to my current system.

Keep in mind the comment about tightening stop loss when in profit zone. I will not change this yet because I want to see if it is profitable in the long run to keep your SL range the same as original (trailing of course)
 
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