End of a wild month. Caps account up by 13.5% since 30/03, best monthly result yet. Of course, it could have been a lot better (I would say that), but I have understood why it should have been better.
The start of the month saw the FTSE gyrating wildly, see the 5d Volatility chart for confirmation this was well in excess of average volatility over Q1 of 2012. Ths held me in a slightly negative position until mid-month. Closed out positions for a good profit on 13/04 but IT problems frustrated me at the Close on the 12th and I had to see a lot of profit evaporate overnight as prices retracted on the next day's Open.
The final factor was Unilever which gapped up past my stop on a short position when they announced earnings last week - effectively lost twice the capital I had intended to risk on that one. Of course, SB firms do offer guaranteed stops to prevent that kind of risk, but then you lose the trailing stops feature.
Good luck to us all for May!
The start of the month saw the FTSE gyrating wildly, see the 5d Volatility chart for confirmation this was well in excess of average volatility over Q1 of 2012. Ths held me in a slightly negative position until mid-month. Closed out positions for a good profit on 13/04 but IT problems frustrated me at the Close on the 12th and I had to see a lot of profit evaporate overnight as prices retracted on the next day's Open.
The final factor was Unilever which gapped up past my stop on a short position when they announced earnings last week - effectively lost twice the capital I had intended to risk on that one. Of course, SB firms do offer guaranteed stops to prevent that kind of risk, but then you lose the trailing stops feature.
Good luck to us all for May!
Closing out all open trades on Friday has restored me to about break-even, after a very poor showing in the last week of April and early May. Also cancelled outstanding orders at the same time: if they couldn't trigger with Friday's sell-off, they weren't worth retaining, especially with a long weekend coming up.
Few opportunities presenting on charts for new orders. Charts in the clearest downtrends are some days away from new swing highs to allow short entry.
Apart from RBS, though the sell order price I am getting is way too far below Friday's low to make it worthwhile.
Only one order being entered this weekend, buy Xstrata above Friday's high. BHP Billiton might be another potential long next week, if price stabilises above the 24/04 low.
Few opportunities presenting on charts for new orders. Charts in the clearest downtrends are some days away from new swing highs to allow short entry.
Apart from RBS, though the sell order price I am getting is way too far below Friday's low to make it worthwhile.
Only one order being entered this weekend, buy Xstrata above Friday's high. BHP Billiton might be another potential long next week, if price stabilises above the 24/04 low.
not much action expected in the immediate future, as I have no open trades and just 1 sell order, on Xstrata.
Taking the index chart as proxy for the majority of its members, there might be some shorting opportunities coming through by Friday night. These should follow an upleg from a swing low. To confirm the downtrend since the swing high of 14/03 at 5989, the index only needs to penetrate below 5576.4, the low of 11/04, about 79pts below where we are, while not getting back above 5819.9, Wednesday's high, about 244pts up from the projected low.
The S&P and Nasdaq look equally negative, and the deep falls on the Asian market overnight make this scenario quite probable.
Taking the index chart as proxy for the majority of its members, there might be some shorting opportunities coming through by Friday night. These should follow an upleg from a swing low. To confirm the downtrend since the swing high of 14/03 at 5989, the index only needs to penetrate below 5576.4, the low of 11/04, about 79pts below where we are, while not getting back above 5819.9, Wednesday's high, about 244pts up from the projected low.
The S&P and Nasdaq look equally negative, and the deep falls on the Asian market overnight make this scenario quite probable.
Really wishing I'd kept those shorts open now...... Oh well, money in the bank, first rule of business.
Market looks like downtrends everywhere - but not quite. Putative swing lows today in (more or less) uptrends in the following, and long orders entered just above today's highs -
Aggreko
Hargreaves Lansdowne
Intercontinental Hotels
Reckitt Benckiser
Smiths Group
Unilever
Whitbread
Buy order in Xstrata adjusted downwards for today's fall. Long triggered in Smith & Nephew. Nothing ventured, nothing gained.
Market looks like downtrends everywhere - but not quite. Putative swing lows today in (more or less) uptrends in the following, and long orders entered just above today's highs -
Aggreko
Hargreaves Lansdowne
Intercontinental Hotels
Reckitt Benckiser
Smiths Group
Unilever
Whitbread
Buy order in Xstrata adjusted downwards for today's fall. Long triggered in Smith & Nephew. Nothing ventured, nothing gained.
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Hi Tomorton,
I'm not understanding your reasoning for exits. You have a predetermined rule for entry but nothing for exits. Surely there is a better way? A measure of R or a measure of average volatility? Or exit when triggered other way? Or even a time exit. D+5 ?
Just ideas.
I'm not understanding your reasoning for exits. You have a predetermined rule for entry but nothing for exits. Surely there is a better way? A measure of R or a measure of average volatility? Or exit when triggered other way? Or even a time exit. D+5 ?
Just ideas.
You're right D70, although exits are as / more important than entries, I have never had a defined strategy for exiting swing trades. Any way that gets money into the bank would do for me, but no indicator or standard holding period can optimise that consistently. Certainly on last week's clear-out, I closed all the shorts despite the index looking very bearish: should have left at least some of these open, plus the untriggered sell orders.
Hi Tomorton,
I think the only thing to consider here is risk vs reward. Cutting some this month for 1r and some next month for 3r will not give any meaning to the results. You need a consistent exit strategy to add viability to this strategy.
A trailing 2 bar high/low perhaps? You just need something and to apply it everytime. Then you'll have a base to work off.
Discretionary exits are destined for disaster.
Just to go on.
I have a strategy that on some things makes the most (over my sample) by going for hefty 14r targets while other products work best on a 3r target. That doesnt mean I optimize each product according to its history. I gauge where my profit line is required to be and that's where it sits, across all products. Knowing that on some products I'll miss juice but on others be working the optimum exit. I am pretty sure that moving my targets would seriously mess things up.
Chasing ones tail is not a strategy!
I have a strategy that on some things makes the most (over my sample) by going for hefty 14r targets while other products work best on a 3r target. That doesnt mean I optimize each product according to its history. I gauge where my profit line is required to be and that's where it sits, across all products. Knowing that on some products I'll miss juice but on others be working the optimum exit. I am pretty sure that moving my targets would seriously mess things up.
Chasing ones tail is not a strategy!
barjon
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I hate to say it, tomo, but then you might as well not have a defined strategy for entry in the first place
Like D70 I will mostly exit to limit but, since I'm not a great fan of the "take some off and leave the rest to run" camp, I use exit "zones". Should price get into it, I'll exit promptly if if comes back out or let the whole lot run on if there's the momentum to push through it. Should this happen I then treat it as a "new" trade, setting a stop-loss zone and a fresh exit zone.
I know that sort of thing would be difficult for you since you can't do much watching of price action during the day , but it is exits that make or break a strategy.
cheers
jon
No arguments from me, it's exits that make the profit, and without a plan, profits will be just as random.
I will have to work on this, exits strategy needs to be objective, repeatable and visible as far ahead as the previous night. I had honestly intended to let the Caps rolling stops manage the exits for me, but I never gave thenm a fair trial and bailed out of positons to bank profit in Month 1. I must give them a proper try-out on the Caps account and work something else up for the Fins trades.
I will have to work on this, exits strategy needs to be objective, repeatable and visible as far ahead as the previous night. I had honestly intended to let the Caps rolling stops manage the exits for me, but I never gave thenm a fair trial and bailed out of positons to bank profit in Month 1. I must give them a proper try-out on the Caps account and work something else up for the Fins trades.
Hi Tomorton,
If these can only be touched each evening. I think the only option is limit orders. Risk x some number of your choosing. Maybe in the other account you can run trailing stops (not a fan personally). Be interesting to see the result.
While on the subject, Anyone know any good programmers that could run this result in 10 mins?
From my reading , most pro traders like a dual stop function. ie. 5 bar low(whatever) and 4 day 'no movement' stop. The numbers dont matter, just your consistency in applying.
I'm following this Tommmy, coz I like what you're doing here!
Please do take my chat with a pinch of salt. It is your strategy after all.
If these can only be touched each evening. I think the only option is limit orders. Risk x some number of your choosing. Maybe in the other account you can run trailing stops (not a fan personally). Be interesting to see the result.
While on the subject, Anyone know any good programmers that could run this result in 10 mins?
From my reading , most pro traders like a dual stop function. ie. 5 bar low(whatever) and 4 day 'no movement' stop. The numbers dont matter, just your consistency in applying.
I'm following this Tommmy, coz I like what you're doing here!
Please do take my chat with a pinch of salt. It is your strategy after all.
No worries from me about criticism of the strategy - it's in development and can only get stronger as a result. Or be proven a lemon. Not worried either way.
Longs triggered today -
Aggreko
Hargreaves Lansdowne
Intercontinental Hotels
Smiths Group
Whitbread
Long order cancelled tonight -
Reckitt Benckiser
New long orders entered tonight -
Aberdeen Asset Management
Admiral
Bunzl
Glencore International
Imperial Tobacco
Rolls Royce
Onwards and upwards! (For a bit.)
Longs triggered today -
Aggreko
Hargreaves Lansdowne
Intercontinental Hotels
Smiths Group
Whitbread
Long order cancelled tonight -
Reckitt Benckiser
New long orders entered tonight -
Aberdeen Asset Management
Admiral
Bunzl
Glencore International
Imperial Tobacco
Rolls Royce
Onwards and upwards! (For a bit.)
Difference is pence? You mean they are roughly equal in cost to trade? Absolutely not. US stocks are about 10 to 20 times cheaper than LSE stocks.
If you want to trade stocks, the US market is the only one worth bothering with (currently).
Cut the strategy on LSE but if you go large, do it on US market.
If you want to trade stocks, the US market is the only one worth bothering with (currently).
Cut the strategy on LSE but if you go large, do it on US market.
isatrader
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I agree with D70. Spreads are much, much tighter on US stocks, especially S&P 500 stocks as they have many more people trading them due to the size of the US market and hence have greater liquidity. This in turn means that they are much less susceptible to the large intraday price spikes that you see on the more thinly traded UK stocks in the FTSE 100 where the market makers can push the prices around more. So you can use tighter stop losses with more confidence on the S&P 500 stocks I've found.
Minimising your spreads is a vital component I found when backtesting a different high trade amount method, that you shouldn't overlook as it can make a huge difference to your performance overall over time.
Interesting thread though tomo, keep it up.
Minimising your spreads is a vital component I found when backtesting a different high trade amount method, that you shouldn't overlook as it can make a huge difference to your performance overall over time.
Interesting thread though tomo, keep it up.
