One Trade a Week

[isatrader]

My aim with this thread is to create a small trading group where the members of the group will submit a trade pick each weekend, which they will then virtually trade during the following week on this thread. This will be a friendly competition, but also a great way for the participants to learn from each other each week (good or bad) and develop their trading skills. The percentage gain or loss each week will be plotted on to an equity chart so participants can track their progress.

The Rules

1. IMPORTANT – Only ONE pick per week – which must be submitted by the end of the day on Sunday each weekend.

2. You must specify whether it is long or short

3. Choose your order type – Market, Limit, Buy Stop, Sell Short Stop or Warehoused

4. If you choose Market then you will get the open price on the Monday

5. If you choose Limit, Buy Stop or Sell Short Stop then set your:
a) Entry Price
b) Stop loss
c) Target

6. If you choose Warehoused then you plan to wait until during the week to set your Limit or Buy Stop price or you will enter at the Market price during the trading day at some point. To enter at the market price simply do a quick post stating "ENTRY" and I will give the closing price of 1 min bar from the live charts in ADVFN using the T2W time of the post. To close a trade post "EXIT"

7. Finally give a reason as to why you want to enter the trade – I realise people are very protective of revealing their edge, if they have one, so this can be brief if need be, or you can say it was a buy or sell signal. But as the aim of this thread is for each of us to learn from each other, as much detail as possible would be appreciated.

8. I'll put the results each week into a spreadsheet and track everyones performance with an equity curve which will be private for each person, but I'll put the groups results as a whole together and show the chart on the thread.

9. If you don't close your trade during the week on the thread and your stop loss or target hasn't been hit then you will get the close price on Friday afternoon.

10. So remember only ONE pick per week.

11. All trades not following the rules will be void and not count.

Disclaimer
This is not a tips service. All trades on this thread are practice trades by each member. Please do you own research before placing any real trades as members are not liable for any losses you make following their practice trades.

I hope people enjoy the thread and join in if they are willing. Remember the aim of the thread is to help us all improve, and focus on our bad trades as well as our good ones.

Please submit your pick for next week by the end of Sunday.

 

[isatrader]

Example Limit Order

Ticker: XYZ
Direction: Long

Planned Entry: 520p

Stop loss: 509 (2.1%)
Target: 541 (4%)

Risk Ratio: 1.9

Entry Reason:
XYZ is a weekly uptrend. On the daily chart it's formed a triangle consolidation pattern and looks like it might breakout to the upside during the next week.

Attach a marked up chart if possible

 

[isatrader]

I forgot to say. Trades can be Stocks, Indicies, Futures or Forex. Obviously, percentage moves are different in the various areas so I will have to come up with a method of gauging performance. Some sort of risk adjusted return performance metric. Any suggestions?

 

[isatrader]

Example Warehoused Order

Ticker: XYZ
Direction: Long

Planned Entry: To be set during the week or entered at market intraday by posting the word "ENTER"

Stop loss:
Target:

Entry Reason:
XYZ is a weekly uptrend. On the daily chart it's formed a triangle consolidation pattern and looks like it might breakout to the upside during the next week.

Attach a marked up chart if possible

 

[Pat494]

I'll play

I'll put my trade forward next Sunday

:smart:

 

[isatrader]

I'll play

I'll put my trade forward next Sunday

:smart:

Excellent, thanks Pat.

 

[isatrader]

Fresnillo (FRES) – Week 1 Pick

Order Type: Warehoused

Ticker: FRES
Direction: Long

Planned Entry: Waiting to see price action on Monday.

Stop loss: 1249 (Will reconsider once I have an entry price)
Target: 1430

Entry Reason:
Fresnillo has had four down weeks following the profit taking in silver. However, the selling volume is now diminishing which can be seen by the positive divergence in the Force Index indicator. Fridays price bar shows that the 1300 level was rejected and I think it might gap higher on the open on Monday as silver closed higher on Friday in the US session.

Friday was a big down day for the market, but silver showed good relative strength and was one of the few positive areas in the market. So I'm looking to play a continuation in that this week.

Below is the FRES charts

 

[Pat494]

Ticker: BP.L
Direction: Short

Planned Entry: 486.60p

Stop loss: 493
Target: 475

Entry Reason:
Major shareholders unhappy with the Rosneff deal and US politicians annoyed BP have gone behind their back to do deals with the Russians

 

[Pat494]

To keep tabs on how much is won or lost I would suggest that each player is given a theoretical $1,000 to invest on 1 item per week ??

Of course to win some will back penny share companies, hoping for massive gains. Or are you going to stipulate that only companies in the S&P 500 & FTSE 100 can be used, for instance ?

 

[SlipperyC]

DAX – Week 1 Pick
Order Type: Limit Buy

Ticker: n/a
Direction: Long (at $1000 per trade = around $10 per DAX point)

Planned Entry: Buy on touch of multiweek support at 7050 area.

Stop loss: 6940
Target: 7120 (possibly even another attempt at 7170 area)

Entry Reason:
After Fridays sell off, I think the DAX will test what seems to be strong support at the 7050 area (highlighted on attached chart - apologies for poor editing!) before attempting a bounce.

Possible risk to the downside in that the NASDAQ sold off a lot more on Friday relative to the DAX, therefore my stop is at 6940 which represents an extreme situation in my view.

 

[isatrader]

To keep tabs on how much is won or lost I would suggest that each player is given a theoretical $1,000 to invest on 1 item per week ??

Of course to win some will back penny share companies, hoping for massive gains. Or are you going to stipulate that only companies in the S&P 500 & FTSE 100 can be used, for instance ?

I agree it should only be major shares, I was going to use a risk-adjusted return as well so that risk was a major consideration in how well someone does.

I think we should limit it to major stocks and indicies only. So the top FTSE 350, Dow 30, S&P 500, and Nasdaq 100 stocks. Then the major indicies like the DAX, FTSE, S&P etc.

The $1000 a week is a good idea. Will go with that.

 

[isatrader]

I will make up a spreadsheet later with all our picks on to show entries, exits and risk reward etc.

 

[isatrader]

Do you think we should limit the risk each week by some measure? For example SlipperyC was only risking 1.56% to begin with, but now at $10 a point the risk is 11%. Any ideas?

I found the risk adjusted return calculation from Hotch's Varengold competition. I could adapt it to weekly. So therefore it would be:

return/standard deviation on a per week basis

 

[isatrader]

Am struggling a bit with how to make it fair between us. Maybe we should add performance points as well, so there's another way to gauge how we've done. So a gold, silver and a bronze each week?

 

[Pat494]

Yes its a tricky question to be sure.

$1,000 of BP shares is very different from say the Dax at $1,000 per point. Although the latter would have a maximum from the SB. Not sure what it would be but nearer $10 a point probably with a max drawdown of $1,000 ?

Could make it shares only or both with a max per point ?

Simpler the better imho

 

[SlipperyC]

Yes, I see what you mean. I worked on the basis that the whole $1000 was at risk each week.

How can you objectively rate performance? Maybe compare each players performance in monetary terms relative to the initial amount that week (for example, if I have $1000 initial capital in week 1 and end the week at $1100 my performance is 10%) ... then compare that performance to a global benchmark, say the S&P500 for example?

 

[SlipperyC]

From an SB viewpoint, the max for an index depends on the SB company and product. I can go up to £250 per point! That would be ... exhilarating!

In the trade I have suggested, the difference between the entry point and potential stop would result in total loss of the initial amount and a likely margin call around the 6960 area!

Bit of an all-in trade but I wouldn't expect the DAX to hit that stop.

 

[isatrader]

Could we use the Risk Reward Ratio so it doesn’t matter what you are trading and not use a monetary measure?

So it would be calculated by the percentage distance from the actual entry price and your initial stop loss by the exit price percentage from the entry price?

 

[Pat494]

To keep it simple I would suggest just 1 lot of $1,000 worth of shares from Dow, S&P 500, FTSE100, Dax,Cac or Nasdaq.
At end of week an easy calculation in dollars to get a flat and fair playing field.

The other competition covers the S&P 500 index already

 

[isatrader]

As we are trading different products I think to keep it simple it has to be done on a percentage basis and risk adjusted as the weeks progress. Attached is a screenshot of the Varengold competition risk adjusted return calculation - which is daily. So we just need to change this to weekly and then I think it will be fair.